In one of the year’s biggest casualties so far, The CMS Group in Scotland (CMS ENVIRO SYSTEMS LTD) has fallen into administration as of May 10th 2022. This is one of the largest fenestration sector companies in Scotland.

As our sector begins to contemplate a much more difficult trading environment, it calls to question how many more businesses we could see fall away as the bounce-back period fades into memory.

The CMS Group Statement

On the website of The CMS Group, they have posted this short statement:

CMS Enviro Systems Ltd. in administration (the “Company”) went into administration on 5 May 2022. The Company’s affairs, business and property are being managed by the Joint Administrators Lyn Vardy and Jonny Marston who act without personal liability. If you have any queries regarding the administration, please email INS-CMSES@alvarezandmarsal.com

Publicly available documents on Companies House confirm that the company has gone into administration. Their last full year accounts show that there had been a huge drop in the profitability of the company between 2019 and 2020:

The CMS Group accounts

The business was incorporated in January 2006.

As for reasons for the collapse, there is likely to be a variety, with COVID almost certain to be one of them. But in the subsequent boom since restrictions were lifted, there will be questions asked as to how a company that turns over £45m and with previous profits running at £3.6m could go bust.

It’s worth noting that in Scotland, COVID restrictions were lifted for the fenestration sector long after those in England and Wales. This will have had a detrimental impact on Scottish fenestration companies.

During the next 12-18 months we will see how much of the industry managed to make the most of the bounce-back during the pandemic. The entire sector struggled under intense demand and grew revenues massively, with many reporting records. Hopefully, that was profitable revenue. Smart business sense would dictate that those profits have been either reinvested back into the business, or a buffer has been built to protect against leaner times. I appreciate that this is difficult in the face of rapidly rising costs on the supply side, but many will have made much more profit than in previous years. How that extra money is managed may make the difference between companies riding out the coming turbulence well or not.

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