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Pilkington's Factory Shop in Swinton

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8:17 pm, June 14, 2010
Pilkington's Tiles placed into administration

By Michael Fahy

Swinton-based manufacturing company Pilkington's Tiles has been placed into administration, sparking fears over the future of the firm's 380-strong workforce.

The company, which supplies tiles to retail chains including B&Q, has appointed Paul Flint and Brian Green from the Manchester office of KPMG Restructuring as joint administrators to Pilkington's Group plc and to subsidiaries Pilkington's Tiles Ltd, Pilkington's Tiles Ireland Ltd and Quiligotti Access Flooring Ltd.

The administrators said that there have been no redundancies at the firm as yet, but said that all staff had been sent home "for a few days" while they assess the company's position.

"We hope to be able to advise on potential redundancies by the end of the week," she said.

Joint administrator Paul Flint said the firm had "suffered intense cash flow pressures as a result of recent adverse trading conditions".

"Indeed, it's no coincidence that the latest BRC-KPMG Retail Sales Monitor indicated that furniture and floor coverings were the worst-performing sectors within retail, highlighting the reluctance of consumers to commit to big-ticket purchases while uncertainty over the future looms," said Flint.

Pilkington's was run by a management team headed by chief executive Ray Tarr who led a buyout of the business in May 2004. Alongside its core manufacturing facility in Swinton which employed 325 staff, the firm also has a site in Poole, Dorset, which includes a quarry with the capacity for 350,000 tons of heavy clay used in the manufacture of vitrified floor tiles. It employed 45 staff, while 10 staff worked at a facility in Swords, Dublin. It also had a showroom and factory shop in Audenshaw, Tameside.

In the year to March 31, 2009 the firm posted a pre-tax loss of £2.9m as a result of declining sales in its ceramics division. The firm said that sales of ceramic tiles, which is its core product, dropped by 3.8 per cent during the year £31.1m. In the notes to the accounts, directors blamed the drop in volumes on a reduction in activity by housebuilding firms.

They also pointed to “the effective collapse of the trade credit insurance market” for a reduction in sales, and said that they had also been hit by the falling pound, making the import of ceramics more expensive.

Flint said that KPMG intended to continue trading the business while it seeks a buyer.

"We would encourage any interested parties to contact us as soon as possible.”

Comments?mfahy@crain.com