KuPP, the Scandinavian-inspired casual dining chain, went into administration after founder Steve Cox failed to persuade investors in parent company Faucet Inn to inject new capital, according to the administrator’s report.

MCA revealed last month that the chain had gone into administration and closed sites in Southampton and Exeter, with Cox acquiring the remaining sites in Paddington and Oxford.

A statement proposal by administrators FRP Advisory, posted on Companies House, now reveals that the company had been trading at a monthly loss £181,000 since the start of the calendar year.

The report says the losses were partly due to the rent and service charge liabilities at the various premises, while the company had also suffered from rising food costs, increasing business rates, and difficulties in recruiting competent chefs to prepare the dishes to the required standard with minimal wastage. Poor trading had also been attributed to the Nordic concept not being as popular as first envisaged, particularly in Exeter and Southampton.

Cox approached his debt and equity investors in Faucet Inn to seek their direct investment into Kupp. However, this was rejected on the basis it was a different business with a different risk profile. The Kupp shareholders, other than Steve Cox, were also unable to provide further funding to the business.

The report shows the company went into administration owing £4.1m to Faucet Inn and £750,000 to a supplier.

The company faced pressure from HMRC as the June 2018 VAT (quarter), which has not yet been filed, is expected to show a payment of about £350,000 due to HMRC.

Speaking to MCA last month, Cox said it had been a difficult decision to put KuPP into administration and close the sites in Southampton and Exeter but that it was the right decision for the future of the brand.

He said: “It’s really unfortunate and it’s the last thing we want to happen but the cost headwinds that were against us and the sheer size of these units meant we just weren’t generating the traffic to warrant the costs. We didn’t want those sites to detract from the successes in the rest of the estate.”