Yodel, the struggling parcel courier, is gearing up to appoint administrators. All hopes for the business to secure a rescue deal have been diminished, posing a threat to online shopping operations. Insolvency experts at Teneo are on standby after efforts to find a buyer for the prominent UK company’s delivery services for major high street brands, began to falter.
Yodel’s client roster includes John Lewis, Argos, Zara, and AO World, among other big brands. No decision has been made regarding the appointment of administrators or the administration process yet. However, despite stating it is “business as usual” for Yodel, things are not looking positive financially.
The potential insolvency would further burden the Barclay family, owners of Yodel and The Telegraph, who are grappling with substantial debts. The courier plays a pivotal role for the online retailer Very, a flagship company within their portfolio.
Yodel, based in Liverpool, employs approximately 12,000 individuals during peak periods and around 10,000 during the rest of the year. A source involved in negotiations revealed that due to looming financial obligations, the business requires an urgent cash infusion within two weeks. Despite having sufficient cash to compensate its delivery drivers for the upcoming week, the company is expected to face challenges meeting future expenses thereafter.
Interest in acquiring Yodel has been expressed by several competitors, including the Polish logistics firm InPost and the delivery startup Shift, alongside a handful of private equity and turnaround funds. However, interest appears to be diminishing, with one rival commenting that “they missed their chance to sell a few years ago” when the parcel market was growing rapidly. This has further escalated the potential of insolvency.
Yodel’s predicament is a cause for concern, especially for HSBC, its largest creditor owed approximately £140m. The search for new ownership, initiated last summer and led by corporate finance advisors Clearwater, is nearing completion, with multiple parties exploring acquisition opportunities. However, uncertainty looms over Yodel’s future as the administration process unfolds.
Yodel’s parent company, Logistics Group Holdings, reported a historic pre-tax profit of £17.6m for the year ending June 2021, marking its first profitable year. During this period, turnover surged from £521m to £676m, driven by the surge in parcel deliveries amid the pandemic. However, the previous year saw the company incur losses of £41.8m.
The performance of the business since then remains uncertain. Financial accounts for both Yodel and Logistics Group Holdings for the year ending June 30, 2022, were expected to be filed by the end of 2023 but are overdue.
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