Ceiling component manufacturer Zentia, which has been in operation for over 100 years, has entered administration. The measure led to the loss of 170 jobs at the Gateshead unit in northeast England. The decision took place on Monday, June 8th.
The company and its subsidiary Zentia Profiles face difficult market conditions. High energy prices have increased production costs. Sales were also below expectations.
Directors tried to save the operation with a contribution of £6.5 million
The company’s directors sought alternatives to maintain activities. Last year they secured a £6.5m capital injection from shareholders. They then explored the possibility of selling the business.
No solvent solution emerged. Therefore, they opted for judicial administration. Interpath, which specializes in insolvency, took on the case. Will Wright and James Lumb have been appointed joint administrators.
- Administrators will attempt to sell the business and remaining assets, including stock.
- Interpath teams will offer support to laid-off employees in the coming days.
- The company has a history of more than a century in the Northeast region.
- The main focus was tiles for acoustic ceilings and metal grilles.
Company history dates back to 1925
Zentia emerged as Armstrong Cork Company in August 1925. In 1980, it was renamed Armstrong World Industries. The UK operation gained independence after sale and regulatory adjustments.
In 2019, the group sold part of its business in Europe and the Pacific to Knauf. A decision by the European Commission required the separation of the British unit. The business was then acquired by Aurelius, a German private equity manager, and renamed Zentia.
The company operates mainly in the manufacture of acoustic mineral tiles and suspended ceiling systems. Its facilities are in Gateshead, in Team Valley. It positioned itself as the main manufacturer in the segment in the United Kingdom.
Financial results show retraction
The latest balance sheets released indicate revenue of £48 million for the year ending December 31, 2024. The figure was down from £54.7 million in 2023. The company recorded a pre-tax loss of £2.6 million.
Subsidiary Zentia Profiles, which produces metal gratings for ceilings, generated £6.4 million in revenue and a small profit of £51,867 in the same period.
Interpath’s statement highlighted the challenges faced by many companies in the construction supply chain. High energy prices and weaker demand weighed on the sector.
Administrators seek buyers for assets
James Lumb, managing director of Interpath, commented on the case. He lamented the impact on the company’s dedicated staff. The priority now is to support affected employees.
The administrators plan to sell the business and assets. Interested parties can get in touch. The objective is to recover as much value as possible for creditors and preserve part of the operations.
Zentia produced complete ceiling solutions, including acoustic tiles and floating systems. Its presence in the British and Irish market was relevant as it offered a shorter supply chain.
Greater context affects manufacturers in the sector
Several construction companies face similar pressure. High energy costs and lower-than-expected sales create difficulties. Zentia sought adaptation, but found no viable way out without insolvency.
Management paves the way for possible acquisition. The process allows partial continuity or transfer of assets to another operator.
Employees at the Gateshead site work to manufacture products used in commercial and residential projects. The company has invested over the years in local production capacity.
The decision to place the company into administration reflects the reality of many manufacturing industries in the UK. Experts are monitoring the case to assess impacts on the local supply chain.
