Cube Modular - Case Update

Joph Young and Conrad Beighton of Leonard Curtis, the joint administrators of Cube Modular, have revealed how the company was unable to avoid insolvency despite significantly pivoting its business model during the pandemic.

Worcester-based Cube Modular was part of the larger Cube group of companies, which provided sports event management, sports retail and modular buildings. Cube Modular provided the modular buildings.

As Covid-19 hit in March 2020, the company adapted its strategy to supply sanitiser stations and generated large profits during 2020.

The company again diversified in 2021 by renting out small temporary structures to be used as pods for visiting families in the care home industry, generating profits for the company at a time when many companies were struggling.

During 2021, another company within the group was informed that it was going to be the principal licensee for the Commonwealth Games in Birmingham in summer 2022. As a result, the company again shifted its focus to selling temporary pop-up accommodation to festivals.

Ineffective management of employees and pressure on the operations team caused sales operations to suffer. A £3.5 million investment was anticipated following a management buy-out in October 2023, but the director reassumed control of the group after the investment did not materialise.

Large contracts that were anticipated likewise did not materialise, and Leonard Curtis, with the help of independent agents from Hilco, conducted a marketing campaign. Despite a number of offers being received, no sale was able to be concluded. With no additional investment forthcoming, the company entered administration on 21 December 2023.

Following the joint administrators’ appointment, Hilco marketed the assets for sale, resulting in 17 offers and continued interest being received at the time of their proposals.

Unfortunately, realisations likely won’t be sufficient to allow secured creditor Growth Lending 2021 to be paid in full on its approximately £2.1 million debt. In addition, an issue as to the classification of Growth’s security has arisen, potentially impacting the amount of any distribution to Growth and other creditors.

The joint administrators have been assisted by HCR (legal) and Hilco (agents) and Evolve (pensions). Their proposals can be found HERE.