Provincial Hotels & Inns fell into administration owing almost £2m

Provincial Hotels & Inns owed debts of almost £2m when it fell into administration, documents show.

Patrick Lannagan and Julien Irving of Mazars were appointed joint administrators of the Lancashire-based company in June.

At the time of its collapse the group, which was founded in 2013, ran four pubs and one hotel: the County Lodge & Brasserie, Carnforth (pictured); the Blue Anchor, Bolton-le-Sands; the Windmill Tavern, Preston; the Manor Inn, Lancaster; and Yorkshire House hotel, Lancaster.

In June 2016 the company bought nine pubs and two hotels from Mitchell's of Lancaster using loans from HSBC and a private investor, with hopes to grow the business into a national chain. However, it was discovered the properties were in "poorer condition" than pre-sale surveys had suggested, requiring additional investment on improvements.

To raise funds the company sold several non-profitable sites, raising just over £1m in 2018 and £498,000 in 2019. The remaining five properties were all forced to closed after the pandemic hit in 2020, with 28 staff placed on furlough.

The Blue Anchor and the County Lodge reopened in April 2021 with the tenant at the Manor Inn also taking over tenancy at the Windmill Tavern, although the Yorkshire House remained closed.

However, administrators Mazars said that after review it was clear there was "no reasonable prospect of rescuing the company as a going concern" due to its level of secured debt. A CVA was considered but Mazars concluded it would achieve a better result for creditors to wind up the company.

Provincial Hotels & Inns posted a loss every year since 2017, with Mazars estimating it made a net loss of around £345,000 between June 2019 and June 2021. The company owed HSBC almost £1.6m, including £49,000 from a Bounce Back Loan. HMRC is owed £144,312 and there are also 48 trade and expense creditors with unsecured claims of around £126,000.

The Country Lodge and the Blue Anchor continue to trade under the control of specialist hospitality agent Onecall Management while administrators explore a sale of the business. The Manor Inn is tenant-run and the Windmill and Yorkshire House are currently closed.