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Learning the Hard Way: Misco

Computer reseller Misco went bust in October last year and comprises the fifth entry in our series of blogs Learning the Hard Way

Here we analyse what went wrong and what smaller scale companies can learn from Misco’s mishap. Misco was praised for paying staff the wages they were owed, which was admirable only in the context of other high profile losses of the past year where employees weren’t treated in the same way. 300 Misco staff lost their roles in October last year and 30 were kept on until the administration process concludes.

Alan Cantwell, the company’s CEO, had tried to raise funds to rescue the company but he was unable to meet his deadline in mid October. Cantwell acquired the company in March 2017 for a meagre sum of £1, however his misfortune followed the path of Misco’s previous owners, US-based Systemax.


Analysts say Cantwell’s swift attempts to rescue the business by cutting overheads, making redundancies, closing offices, the warehouse and distribution centre were simply too little, too late.


They should have been made years earlier by Misco’s previous owners. In the run up to the collapse, credit insurers started to cut exposure to Misco – a tell-tale sign that things weren’t looking bright. It’s always useful to observe who credit insurers cover business with and who they don’t. Our team at InvoiceInsure constantly monitor our invoice insurance policy holders’ clients. This gives our customers an insight into which of their current or prospective clients are financially healthy and stable, and who is higher risk.

It helps you to make informed decisions and saves exposure to unpaid invoices further down the line. Its part and parcel of what we offer our customers. Technology firm Comet also suffered the same fate. Credit insurers pulled out, distributors soon followed suit and with only a few partners supporting the business, the company collapsed on its last legs.

The credit insurance peril led to choked cash flow for Misco. Left with disrupted funds and repeat losses, efforts to forge a deal with the US reseller PCM also failed. “As part of efforts to recapitalise the company, the directors initiated a marketing process to protect the UK business…but once firm offers failed to materialise, the pressure on cash-flow was unsustainable,” FRP Advisory, Misco’s administrators, commented. In addition, the company had a large VAT bill that HMRC was chasing.

Misco’s misfortune offers other businesses some vital lessons.


Keep on top of your tax. Make sure to honestly submit your tax return annually, and pay on time. This helps with managing your finances and forecasting accurately.


Pay attention to the companies you are doing business with via your dedicated InvoiceInsure team and stay switched on to any changes in their financial health. Try to plan for the future. If things start spiralling, keep staff in the loop about the potential for redundancy. Misco’s 80 Scotland-based staff were let off two months earlier than predicted, which must have added salt to the already raw wound.

And what about suppliers working with Misco, what happened to them? Misco’s collapse resulted in £21.8 million debt that was spread across 1,037 parties. But distributors Exertis and Westcoast were two of the most exposed channel firms; Exertis is owed upwards of £7.3m and Westcoast is listed as a £7.6m creditor. Some of these partners will undoubtedly be left out of pocket from unpaid invoices lacking invoice insurance to protect them from client insolvency and protracted default.

Let’s hope they survive and learn to ensure they have adequate invoice insurance in future to make sure they don’t lose out again. A comprehensive policy with InvoiceInsure would be the best way for a smaller scale but ambitious companies to safeguard themselves from suffering after a collapse on the scale of Misco. Keep striving towards high growth and make sure to insure your invoices.

We’d be delighted if you get an invoice insurance quote for by clicking the link below – it’s a simple process and won’t take long.