There appears to be no let up in the industry turmoil as Sky News now reports that Everest is looking at an accelerated sale of the business by Jon Moulton. As it happens, I was talking with industry colleagues only a day ago pondering the future of the business and how long in reality it had to run. I gave it months. Turns out it could be a lot less.

“Immediate funding injection”

In case you haven’t come across the Sky News article yet, you can view the full report here.

But, in what perhaps gives the clearest indication as to the state of the business, it is this paragraph that will concern the most:

According to information circulated to potential bidders, Everest “requires an immediate funding injection to relieve creditor pressure which, combined with further significant investment in its marketing, systems and brand, can deliver increased market share, and a path to strong underlying profitability and growth”.

To “relieve creditor pressure” means they likely are not able to pay their bills. But the report also states the business needs major money across the board. The Sky News report also claims that forecasts show the business could return to profitability in 2025. Hard to see how given the state of the business right now.

It is reported that professional services firm Alvarez & Marsal are looking for offers within the next ten days. That seems a rather swift timeline and shows a great deal of urgency required.

Everest, as you will remember, went through a pre-pack administration in June 2020 as the pandemic put the business to the wall. That gave the new business a lease of life, saved jobs and allowed existing contracted work to continue and be finished.

Everest then bought the Evolution brand of windows and doors from the remnants of UKWDG, much to the bewilderment of the sector. There had been excited speculation that the original owners of Evolution were going to be the ones to take over. However it did not play out that way.

Similarities with Safestyle

Only last October we saw the demise of Safetyle. Another long-established, national installer of windows and doors. As well as a collapsing share price, that company also ran out of cash. They also appealed for new investors to inject cash, and fast. They were not able to find buyers and had to close the business, with Anglian buying their order book and brand and amalgamating it into their own.

Everest too need cash. They need cash to pay their creditors, who are likely going to be nervously looking at their accounts wondering how much of it they are going to see back. Any new investor is also going to have to pump a ton of money into the business to transform it.

The difference between the two is one is owned privately, by Jon Moulton. The other was a Plc. There are different trading rules, but if no buyer can be found and if Everest cannot pay their bills, we are likely to see a similar outcome.

Another similarity is the business model. Everest, like Ssfestyle and others that have gone under in the last few months is a volume-reliant company. As we observed with Safestyle, it only took a modest drop in demand to pull the rug from that business. The high-volume/low margin model is very difficult to make a success when we have subdued demand from homeowners and an economy that is flirting with stagnation and tipped slightly in recession.

I say it every time this subject comes up: quality is always the safe bet. The higher end of the market is always the more resilient part, where the richer 20% demographic are shielded from economic problems that hurt the other 80%. Higher margins, higher contract values and better products.

What about Evolution?

This news is likely going to cause concern once again for those installers who use Evolution for their timber alternative windows and doors. Only a few months ago Everest bought Evolution from UKWDG as that company collapsed, with promises from Everest that they would work hard to keep Evolution going and that they would work to see it thrive.

Now, it looks like we’re going to be questioning it’s viability again. Installers will likely already be contacting the company over existing orders and looking at their own installation schedules with concern.

You can read the entire Sky News article here:

More information will follow as it becomes available.

To get weekly updates from DGB sent to your inbox, enter your email address in the space below to subscribe:

By subscribing you agree to DGB sending you weekly email updates with all published content on this website, as well as any major updates to the services being run on DGB. Your data is never passed on to third parties or used by external advertising companies. Your data is protected and stored on secure servers.