Repeated losses for council-owned company

Council-owned maintenance company Servicestore has reported three years of losses, according to Companies House

By Josh Mellor, Local Democracy Reporter

A maintenance company owned by Waltham Forest Council has repeatedly lost money over the years, according to accounts on Companies House.

This week, councillors on the shareholder committee will approve a secret business plan for Servicestore, which has provided maintenance, pest control and caretaker services for the council and other clients since 2018.

While nearly all details about the company’s performance have been kept hidden from the public on the grounds of “commercial sensitivity”, public accounts on Companies House show it last recorded a profit in its first year of operation.

In the 2021/22 financial year, it made a loss of £45,000 and owed £3.4million. The year before, it lost £212,000 and, the year before that, it lost £136,000.

The company describes itself as a “friendly, reliable and local one-stop shop” for property and garden maintenance needs. Earlier this year, it lost a legal battle against a former employee, who was unfairly sacked after a tragic death on the Town Hall grounds.

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The company’s “forecast” profits for this financial year are £287,000, although this does not include tax or overheads carried out by council staff, such as website development, marketing, human resources or accountancy.

A short public report before the council’s shareholder committee next week says Servicestore has “exceed[ed] targets” and “met all contributions” to the council.

According to the report, the council would be “protected financially” from the company if it failed, as it would only lose its initial investment of £100.

If the company folded, any debt it owed would be “written off” at no cost to the council.

Following the original publication of this article, a Servicestore spokesperson said: “Many start-up companies make losses in the first few years of operation as they establish themselves in the market and meet their start-up costs.

“After making losses in its first two years we are pleased that performance last year has improved and that we are forecast to make a profit. This will be reinvested in council services to improve the lives of local people.

“The £3.4million that is claimed to be owed is a combination of trade creditors and various taxes. This can be matched against the trade debtors that owe us a total of £3.1 million.

“It is also important to highlight our other working capital such as the cash in our bank, which exceeds the amount we owe to creditors.”

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