Denby pottery - advising energy-intensive businesses in financial distress

22 May 2026

The recently announced government package aimed at supporting the ceramics industry has come too late for Denby Pottery, says Stephen Rome, R3 Midlands chair and partner at Penningtons Manches Cooper as he considers the challenges facing energy-intensive businesses.

News that 217- year-old Derbyshire pottery manufacturer, Denby pottery has entered administration and ceased manufacturing is a reminder that even well-established brands with strong consumer reputations are vulnerable to financial pressures.

For practitioners, the case highlights a number of recurring themes in distressed manufacturing situations, particularly when energy costs play a central role.

How did we get here?

While the immediate trigger for insolvency may often be the ability to pay debts when they are due, or where liabilities outweighing assets, Denby’s position reflects longer term financial problems. The company had been in financial difficulties for several years as the accounts at Companies House show a loss of 2.3million in 2023 and 5 million in 2024.

And like many other manufacturers, Denby has recently been affected by the perfect storm of reduced spending from cash-strapped customers, and inflationary pressures, especially the cost of keeping its kilns burning. According to figures shared with the BBC, Denby’s annual energy costs have doubled in recent years to between £2.5m and £3m, from around £1.25m before 2022.

Unfortunately, the recently announced government package aimed at supporting the ceramics industry has come too late for Denby but will hopefully help other manufacturers. The government has pledged £120 million to back energy efficiency, decarbonisation and long-term competitiveness in the sector, at the same time announcing support for the chemical industry.

For advisers, this reinforces that importance of distinguishing between short-term distress which may be manageable and more serious cost pressures, which require more fundamental intervention.

The role of administrators

Once a business enters administration, the focus is understandably on stabilising assets and preserving value. As in Denby’s case, administration can provide some breathing space from creditor pressure, enable continued trading and support an orderly marketing process for the business and assets.

Administrators will be working alongside a team of experts such as specialist valuation agents to achieve this while having day-to-day control of the company, which involves being on site, supporting employees, speaking to shareholders, lenders and the government. The aim will be to deliver better outcomes for creditors than immediate liquidation.

For well-known brands, intellectual property and brand value may still attract buyer interest even with manufacturing under strain.

The complexity of these situations underlines the need for experienced practitioners familiar with sector-specific challenges.

Business pressures

Denby is not an isolated case. Other ceramics manufacturers including Royal Stafford Moorcroft Potteries and Wedgwood’s have faced difficulties in recent years.

Sadly, it shows that a long and proud heritage is not enough to sustain a business which has reached a tipping point, whether that’s cashflow, the cost of energy, staffing, servicing debt or a supply chain failure. And with company insolvencies on the rise, it’s likely that many more will be feeling the strain right now and it’s a mistake to assume that longevity protects them from this harsh reality.

Practical advice for supporting clients

For restructuring, turnaround and insolvency practitioners advising clients in similar sectors, the key lessons include:

• Encourage early engagement: the sooner issues are addressed, the wider the available options
• Stress-test business models against sustained high energy costs, not just short-term spikes
• Assess debt sustainability carefully, particularly where borrowing has been used to absorb cost increases
• Identify business value early, including brand, intellectual property, and customer base
• Monitor sector-specific policy developments which may affect viability.

Ultimately, the Denby case underlines the importance of proactive advice. While external pressures may be unavoidable, early intervention can make a material difference to outcomes for businesses and their stakeholders.

R3 continues to highlight the value of seeking advice at an early stage in its communications with businesses and the wider public, and our member directory provides a useful route for companies to find a qualified and regulated insolvency practitioner.