Fairpoint Group to call administrators as firm ‘no longer able to continue trading’

Professional services provider Fairpoint Group plc has confirmed its intention to call in administrators.

The Lancashire-headquartered company said it will appoint administrators, in accordance with statutory requirements, within 10 business days unless its current financial circumstances change.

In a statement released this morning (August 4), Fairpoint said the funding facility of up to £5m provided by Doorway Capital Limited to its wholly owned legal services business, Simpson Millar LLP, will enable the brand to continue trading.

In 2015, legal services grew to become Fairpoint’s biggest arm.

The funding facility was in conjunction with the assignment last month of Fairpoint’s debt from AIB Group (UK) plc to Doorway.

However, Fairpoint said financial ties made it unable to support its other businesses.

The statement read: “Ongoing support for the group’s subsidiaries outside of the legal businesses is made more difficult due to the existence of the onerous lease on the group’s head office which has an annual commitment of c£1m per annum for a further four years.

“As a result, and following detailed discussions and the evaluation of a number of options, the board has concluded that the holding company of the group, Fairpoint Group plc, is no longer able to continue trading as a going concern and has filed notice of intention to appoint administrators.”

The Fairpoint board said it does not expect today’s announcement to have a material effect on the planned disposal of the group’s IVA and Claims divisions to a third party, as announced on July 12.

The company expects to make a further announcement in due course.

In its financial report of September last year, Fairpoint announced flat profits against revenue growth of 24%.

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