Century-old British manufacturer collapses into administration with 170 jobs lost amid soaring costs

A century-old British manufacturer has collapsed into administration, leaving 170 workers without jobs after mounting losses and soaring costs pushed the business to the brink.

Gateshead-based ceiling manufacturer Zentia appointed administrators from Interpath on Monday after efforts to secure a future for the company failed.

The North East business, which first began operations in 1925, had celebrated its centenary last year after building a long-standing reputation supplying ceiling systems to schools, hospitals, shops and commercial buildings across the UK.

Its sister company, Zentia Profiles, has also entered administration proceedings.

The collapse follows a sharp deterioration in the company’s finances during 2024, with Zentia recording a pre-tax loss of £2.6million after previously posting a profit of £2.7million in 2023.

According to the company’s latest accounts, turnover fell by 12 per cent to £48million as uncertainty across the construction sector reduced demand for its products.

Administrators at Interpath said the business had faced a combination of difficult market conditions in recent months which ultimately proved unsustainable.

The company had been hit by soaring energy costs, which placed increasing pressure on manufacturing expenses while revenues continued to fall below expectations.

Ongoing difficulties across the wider construction industry also compounded the firm’s challenges as demand weakened further.

Pricing pressures intensified throughout the year, limiting what the business was able to charge customers despite rising operating costs.

Production expenses also remained elevated as Zentia worked to bring newly installed machinery up to full operating capacity following a major capital investment programme.

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Despite the worsening financial position, the company’s major shareholder injected £6.5million into the business in an effort to stabilise operations and support a recovery plan.

Directors also explored a potential sale of the company in the hope of finding a buyer capable of continuing operations.

However, neither effort resulted in a solvent solution for the business.

The company’s 2024 accounts, which were finalised last June, had already warned that improvements in both sales performance and production costs would be required to restore profitability.

Cash reserves also declined sharply over the year, falling from £570,000 to £113,000 by the end of 2024.

In a statement posted online, the company acknowledged the scale of the challenges it had faced in recent months.

Zentia said: "The business has faced significant headwinds over recent months, and despite our very best efforts, we were unable to find a solution which would allow us to remain trading."

The company also thanked staff, suppliers and customers for their support during its final months of operation.

They added: "We'd like to thank our customers, suppliers, and most of all, our team of incredible people who worked so hard to make the business what it was. This is not the outcome any of us wanted."

Zentia Profiles, which entered administration alongside the parent company, also experienced a significant downturn in performance during 2024.

Its turnover fell by 11 per cent to £6.4million, while pre-tax profit dropped from £256,000 to £52,000.