Box Ltd went into administration owing £23.2m to unsecured creditors, according to the administrator’s Statement of Proposals.
The gaming and laptop e-tailer appointed Kroll as its administrator on 19 January, less than two years after it was acquired by consumer tech buy-and-build Tactus Group.
At the time, its demise was blamed on “liquidity challenges” following below-forecast festive trading.
Now, an administrator’s Statement of Proposals has shed more light on the events leading up to Box Ltd’s collapse, how efforts to sell it as a going concern failed, and the size of the debts it left behind.
The cost to trade creditors
Unsecured creditors of Box Ltd totalled £23.2m, the report stated, £8.7m of which were trade and expense creditors and £14.5m intercompany creditors.
Three distributors were owed over £1.5m apiece, the list of unsecured creditors indicates.
Group companies CCL Computers Ltd, Tactus Holdings and Tactus Ltd were owed £8.7m, £4.5m and £1.2m, respectively.
What triggered Box Ltd’s collapse?
According to the report, the need to place Box into administration was triggered by a winding-up petition (WUP) filed by a “major supplier” (owed £2.3m by Box Ltd and the wider Tactus Group) on 11 January 2024.
This supplier initially informed Box that it was considering presenting a draft WUP in December.
The report also pointed to a deterioration in Box’s trading performance since Tactus acquired it.
The e-tailer’s revenue dropped from £140m in the 17 months to 31 March 2021 (£99m on an annualised basis), to £73m in fiscal 2022. Annualised revenue for the period to November 2023 then fell to £36m.
The drop off in trading prompted Box Ltd’s bank, Santander, to cut its revolving credit facility in late 2022.
The major supplier had requested 4x £500,000 payments starting on 11 January 2024. Box Ltd was “not in a position” to make the first payment after trading over the Christmas period came in below forecasts (due to its inability to purchase the necessary stock).
Attempts to find buyer fell flat
The report also reveals how efforts to sell Box Ltd as a going concern failed.
Having initially been engaged on 8 January, Kroll sent a ‘teaser’ to 12 “potentially interested parties” on 16 January. Three signed an NDA, but ultimately no viable offers were received by the 19 January deadline.
Kroll was originally introduced to the wider Tactus Group in December 2023 amid efforts by the directors to seek additional investment and refinance the group, the report noted.
Following Kroll’s appointment as Box’s administrator on 19 January, some 102 employees were made redundant, with five retained to assist with the wind down of the business.
Kroll said it took the decision not to continue to trade the business for three reasons, namely because the business was loss-making and lacked the necessary working capital to acquire stock, because it feared suppliers would seek to reclaim their debts in order to continue supply, and because the above sale process had failed.
There “will be insufficient realisations to enable a distribution to the unsecured creditors… other than by virtue of the prescribed part, if applicable”, the report noted.
Tactus ranked 38th in IT Channel Oxygen’s recently published Oxygen 250 report into the UK’s top IT solutions providers.
Tactus CEO Scott Brenchley characterised Box Ltd as a “strong addition to Tactus” at the time it acquired the £100m-revenue, 140-employee e-tailer in February 2022.
It was among several quickfire purchases Tactus made during 2021 and 2022, bankrolled by successive investments of £10m, £40m and £13m from Arete Capital Partners, Chrysalis Investments and Santander, respectively.
Neither Kroll nor Tactus could not be reached for comment at the time of publication.
