VIVID LIGHTING LIMITED 2007 – 2015
In May 2015 the captain of flight VLL001 raised a "mayday" call and asked to be blown out of the sky. Until that point the plan had been to bring this battered plane in steadily so as to ensure the safety of all the passengers. But it became apparent that this plane was never going to be able to reach the destination runway. Worse than this, it was headed for a populated area which meant that if allowed to continue, the death toll would potentially be even greater.
The "authorities" agreed with the captain's assessment of the situation and so at 10am on Wednesday 13th May the button was pressed and VLL001 was no more.
FULL STORY HERE.
2007 – Tom Shanks establishes VIVID and starts trading from a Worcestershire farm. Turnover is £220,000 in Year 1. Business has a tiny cost base and a huge amount of support from HSBC.
Early projects include all guest room lighting at Ramada, Salford Quays and many pub, bar and restaurant projects, supplied mainly through trade resellers. The company enjoys great support from customers and suppliers too, and Vivid works very hard to serve them.
2008-2010 – Contraction of spend within the leisure industry, withdrawal of support from HSBC and the freefall in £Sterling / Euro rate (meaning a 30% increase in cost of sales) removes some momentum, but sales continue to rise and the business is profitable.
2010 – 2011 – Paul Shoosmith joins from DeltaLight and makes an immediate impact (on sales, profits and costs). Business expands quickly and the scope of activity broadens. The P&L holds up well, in spite of various events. Tom suffers the death of his father, brother and son in the space of 15 months. Paul becomes the face of Vivid Lighting in the market and continues to grow sales. Tom pretends to be OK.
2012 – As the growth continues the strain on cash flow becomes more apparent. In spite of their holding a 2nd charge over the Shanks family home, and with the numbers looking increasingly good, HSBC flatly refuse (time and time again) to support the business. Instead, more than half of their original support has now been paid back, squeezing the company further.
Within months of burying his son, Tom discovers that the Office Manager has compounded the cash flow problem by stealing thousands of pounds from the company over a 5 month period (employing many audacious and very well concealed methods). She is convicted at Worcester Magistrates Court, and ordered to pay Vivid back. However, at the time of Vivid's liquidation, less than 15% of the compensation has been received by Vivid.
2013 – In order to survive, Vivid Lighting is now paying loan shark rates of interest on very large sums of money. The business is still growing strongly (£576,000 turnover in y/e 2012). But borrowing at sky high rates and discounting invoices (informally, not with the bank) effectively wipes out the margin and is really the beginning of the end. A slow march to death, but a death all the same.
The business turns a pre-tax profit of £74,000 in 2012 to a pre-tax loss of £52,000 in 2013, "helped" too by a significant bad debt. The business should, in retrospect, have been closed at this point.
HMRC receives cleared payments from Vivid (in the calendar year 2013) of £90,945 which is a lot of money for a small company experiencing difficulties, but the law is the law!
Paul Shoosmith leaves in autumn 2013 and Tom thanks him for his hard work and contribution, through what were extremely challenging circumstances.
2014 – Rather than closing the company Tom focuses of cost reduction and steadying the ship. The overtrading of the previous period has calmed and the company is back in the black for the year ending 2014. Tom struggles to carve out and communicate a new "identity" for the business as he is treading water in quick sand, which thickens with every movement.
2015 – Project pipeline is healthy. Activity within the company is at the right level for the current cost base. But because of a series of delays in projects the cash position worsens and the debtors / creditors position becomes extremely delicate.
Suppliers who have been very understanding of the issues outlined above (both personal to TS and within the business) start to run out of patience simultaneously.
There is effectively a "run on the business" which intensifies during April and the tipping point comes in early May. This action by suppliers / creditors is 100% correct, as Vivid is (was) a business trading with other businesses. It is nothing more, or nothing less than this.
With continued project delays and all options of raising finance exhausted, the responsible decision has to be made, for all concerned.
In the end, there was no choice.