Prohire enters administration as staff made redundant

Prohire has entered administration and ceased trading with the majority of staff losing their jobs.

A handful of employees from around 80 employed by the firm have been retained to assist with an orderly wind down of its Profleet, Proflex, Procare and ProGreen brands.

The commercial vehicle hire and fleet management provider had lodged an application with the courts to appoint an administrator a couple of weeks ago. 

It followed a ‘registration of charge’, which formally recorded a security interest by NorthEdge Capital against the company's assets, that was lodged at Companies House in May.  

NorthEdge Capital supported a management buyout of Prohire in 2018, led by then managing director Dave Barlow. 

The last available accounts show that turnover increased by 19% in 2024, from £44.4 million to £52.9m year-on-year.

The increase, it said in its filing, was mainly down to annualisation of prior year and current year contract hire new business secured.

However, operating profits (excluding adjusting items) reduced in the year by £228,000 to £3.2m as the annualisation of the revenue benefits of new business wins were eroded in the short term by an increased fleet age profile, with a number of large customers due for fleet renewals this year.

Pre-tax profits, meanwhile, fell by more than £1m, from £1.6m in 2023 to £414,000 last year, making an overall loss after tax of £132,000.

Up to a third of its contract hire fleet was due to reach the end of its fixed rental periods in March.

Inflationary pressures in the SMR (service, maintenance and repair) network and infrastructure investments made to support its customer service proposition also impacted margin flow, it said in its accounts filing at the start of the year.

Timothy Graham Vance and Samuel James Woodward, partners of EY-Parthenon’s Turnaround and Restructuring team, were appointed as joint administrators at the end of last week (June 27).

The business, which has a 3,500-strong fleet, had faced liquidity challenges over the past few years, with senior management unable to secure the funding required to continue trading, according to the administrators.

Despite this, it announced it was investing £5m in 70 new vehicles to refresh its 400-strong Proflex national rental fleet in October, 2024. 

The administrators are now exploring the possibility of novating contracts with customers and vehicle funders to new providers.