The pandemic has turned old assumptions on their head, and even the most apparently industrious businesses can find themselves floundering when the economy takes an unexpected turn for the worse. Founded in 2010, Fruehauf Ltd specialised in rigid and tipper trailers for use in road haulage. Now, it has collapsed, having struggled to get its show back on the road since the pandemic.
Fruehauf goes off-road
In the latest figures submitted to Companies House, Fruehauf Ltd appeared to be a healthy business as of September 2019. Turnover dropped slightly from £26.2 million in 2018 to £23.7 million, suggesting the company was very capable at churning out a fairly consistent number of manufactured products ahead of the pandemic.
However, despite this large turnover, Fruehauf was consistently posting a post-tax loss in excess of £400,000 in both 2018 and 2019. Cost of sales and administrative expenses were considerable enough to wipe out any potential profits the company could make. On the balance sheet side, Fruehauf also owed creditors in excess of £7 million in both 2018 and 2019.
The operational costs and the large debts Fruehauf had accrued over a decade may have been slowly eating away at turnover and its assets, which might have constrained the company and limited its scope for potential growth in the future. Despite this, Fruehauf was a business capable of high turnover, and now it is in administration, eagerly awaiting a buyer to potentially turn it back around in the right direction.
Manufacturing takes a hit
Manufacturing has been a sector which has battled with rapid change in the past. As we wrote previously, automation forced manufacturers in the 1970s and 1980s to invest more in robot production lines in order to boost productivity. Fruehauf Ltd faced a totally different change as a firm since 2020: the pandemic resulted in much of its workers being placed on furlough.
At a time when the company needed to keep the production lines running, demand might have faced a once-in-a-lifetime setback. When the pandemic cloud is finally lifted, a new business agenda could turn the successor to Fruehauf around, when it is finally bought out of administration. If a phoenix-from-the-ashes revival isn’t on the cards, asset stripping could still yield greater returns for buyers who know where to look.
The UK was arguably the home of the original industrial revolution, and continues to be part of the leading manufacturing nations on the cutting edge, especially when it comes to the types of products Fruehauf previously specialised in. Perhaps you can be part of the next industrial revolution in the coming decades?