News yesterday of Carter & Carter, the key 'Train to Gain' provider going in to administration will have sent a shockwave around.
There have been a number of comments (see The Guardian July and December 2007) surrounding the deteriorating position of the company in the the past year, particularly after the sad and untimely death of its founder and CEO, Philip Carter in a helicopter crash......
Another article in the FT yesterday pointed out that the net debt of the company stood at £86million but was expected to peak at £175 million.
It seems as though this was too great for the banks too bear. Reports referenced earlier suggested that C&C had received some £90 million of funding from the Learning and Skills Council for apprenticeships.
So the question is what's gone wrong there?
Well for one, there seem to be have been issues with proper administration for funding purposes. The fact that both the FInance Director and the Business Development Director resigned last year may provide some clues.
C&C rode onto the stock exchange after a string of acquisitions (see history). The numbers would seem to suggest something amiss in the funding of these.
The company for awhile was the darling of the LSE and Philip Carter himself won the 'Entrepreneur of the Year' award in 2006.
But as administrators ponder over the wreckage, a number of questions will no doubt be asked.
For the LSC, it is the worst possible outcome as they desperately try and maintain the training contracts. And questions will also need to be asked there, as they felt obliged to continually fund as problems were being uncovered.
One question for me - just how viable was this business from the start?
Comments (1)
I think the failure of C&C is an example of the difficulties of business expansion through an acquisdition model. The challenge of selecting the right acquisition targets, paying the right price and assimilating the new businesses proved a step too far. The underlying econiomics of delivering training has not changed and remains an effective way of delivering the training and development that is underpinned by government support. The main concerns now has to be the learners and employers who are affected by the commercial decisions made by the company.
Posted by Stewart Segal | March 13, 2008 10:06 AM
Posted on March 13, 2008 10:06