A major Midlands vehicle rental firm has collapsed, leaving behind debts totalling tens of millions of pounds owed to its creditors. Prohire Limited, which operated from a primary base in Fenton, Stoke-on-Trent, and a secondary site in Tunbridge Wells, Kent, ceased trading last year after failing to secure vital funding.
Financial Challenges and Administration
The company, which managed a substantial fleet of up to 3,400 vehicles including cars, trailers, and trucks, had been grappling with persistent liquidity issues. Administrators from EY-Parthenon's Turnaround and Restructuring team stated that the group had insufficient funds to continue and no reasonable prospect of securing additional finance in time.
Consequently, the directors concluded during the week beginning Monday 23 June that an insolvency process was unavoidable. Timothy Graham Vance and Samuel James Woodward of EY-Parthenon were appointed as joint administrators at the end of that month.
Mounting Debts and Creditor Shortfall
The scale of the debt is significant. Administrators estimate that non-preferential unsecured creditors are owed approximately £28 million for Prohire Limited and a further £19.6 million for the Prohire Group. Sadly, the administrators' current estimates indicate there will be insufficient funds to pay any dividend to these non-preferential creditors.
This financial collapse occurred despite the company reporting a 19% increase in turnover for 2024, rising from £44.4 million to £52.9 million year-on-year. However, underlying profits told a different story.
Profit Decline and Operational Strains
Operating profits, excluding adjusting items, fell by £228,000 to £3.2 million. The administrators noted that benefits from new business were eroded by an increased fleet age profile, with several large customers due for fleet renewals. More starkly, pre-tax profits plummeted by over £1 million, from £1.6 million in 2023 to just £414,000 in 2024, resulting in an overall post-tax loss of £132,000.
Following the collapse, only a handful of employees from a workforce of around 80 were retained to assist with the orderly wind-down of the company's operations, which included its Profleet, Proflex, Procare, and ProGreen brands.
