BDO takes on administration of Norton Motorcycles

10 February 2020 Consultancy.uk

A historic motorcycle company has called in administrators, after the Birmingham-based company was taken to court for a disputed £300,000 tax bill. The appointment of BDO administrators at Norton Motorcycles sees around 100 jobs put at risk.

Established in Birmingham in 1898, Norton Motorcycles is one of the few remaining British motorcycle companies still maintaining involvement in motorsport. The firm has been struggling with consistent financial difficulties in its second century in business. In 2008 it was rescued by Stuart Garner, an entrepreneur and property developer, who moved production to Castle Donington – however in the past two years, the firm has seen its problems continue to mount.

In the latest accounts for year end March 2018, filed in April 2019, CEO Stuart Garner admitted, “Intangibles had grown significantly over the last three years as the business has invested money into the research and development of new engine platforms and motorcycle ranges, being the V4 and 650cc model ranges.”

BDO takes on administration of Norton Motorcycles

A £1 million crowd funding drive was launched by Norton Motorcycles in November 2019 in order to support this, but was halted after only a single investor showed interest. The business said at the time that it would use the extra funding to increase the production of the previously mentioned new models, which had reportedly generated a £30 million order book. Following the failure, auditor HSKS Greenhalgh flagged up pre-tax profits of just  £33,701 at the firm, with a year-end loss after tax of £1,537. This was set against liabilities of £3.38 million based on £6.7 million turnover.

Earlier in 2020, the situation worsened as Norton was in court following a winding up petition from HMRC over a disputed £300,000 tax bill over research and development tax relief. Finally, creditor Metro Bank has called in administrators, as the company’s future looked increasingly insecure.

BDO has been appointed as administrator to Norton, which has ceased trading with immediate effect. The move places around 100 jobs at risk, while two more of Garner's companies are also in administration, including his 42-bedroom Priest House Hotel in Castle Donington.

Lee Causer, Partner at BDO, said, “As joint administrators, we are taking all necessary steps to ensure that customers, staff and suppliers are supported through the administration process. Our job is to determine and execute the most appropriate strategy as swiftly as possible to protect creditors’ interests, bearing in mind the need to minimise distress for all parties. We are currently assessing the position of each of the companies in order to conclude upon the options available to them and the most appropriate way forward.”


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