Tolent has entered into administration with 313 staff being made redundant.
The Gateshead-based contractor is one of the largest in the North East, with a revenue of £200m, and is the 67th largest in the UK, according to the CN100 2022 ranking of the UK’s biggest contractors.
On Monday (13 February), the group appointed administrators to wind up the group, including five subsidiaries, following a year of financial difficulties, as well as significant losses on its £85.5m Milburngate hotel project in Durham.
James Lumb, managing director of Interpath Advisory and joint administrator for Tolent, said: “Tolent is one of the most well-known construction firms in the North East, having been involved in landmark projects including Riverside Sunderland, the Hadrian’s Tower residential scheme and the Milburngate development in Durham.
“However, like many businesses across the UK’s building and construction sector, the group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its supply chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.
“Following the tapering-off of the government’s COVID-19 support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector. This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.
“Additionally, after the annual Christmas shutdowns and a cold December, the months of January and February often bring with them a painful cash crunch. In a sector which typically operates on wafer-thin margins, this can often prove to be insurmountable and, unfortunately, so has been the case for Tolent.”
The group was founded in Gateshead in 1983 and has offices in Leeds, Stock-on-Tees and Shotton Colliery. It has worked across several construction sectors and has also provided civil engineering and property development work.
In its latest financial accounts, which cover its 2021 financial year, Tolent made a £4m loss from a revenue of £198m, while in 2020 it made an £8m loss from a £184m turnover.
In September 2021, Tolent replaced its chief executive following poor financial results, with Paul Webster taking over after 23 years working at the company. Earlier in 2021, the firm underwent a £12m refinancing with lenders.
Tolent’s subcontractors took to LinkedIn to respond to the contractor’s collapse, which was widely rumoured over the weekend, with several saying they now expected to lose hefty payments for work carried out.
Durham-based High Rise Brickwork Ltd, a bricklaying business, said it would be “taking a hit due to the circumstances and working on four projects for Tolent Living” but added that “it hasn’t broke us, nor will it break us”.
Meanwhile, James Winter, director at Durham-based JD Winter, a heating and plumbing contractor, said his firm “will be facing a huge financial loss” from the administration of Tolent Living, but added that it was “strong enough to take it” and would not have to make redundancies.
He said: “I hope all other subbys involved will get through this unscathed.”
Tolent’s appointment of an administrator comes less than a week after the collapse of fellow North East contractor Metnor – which earned £62.6m per year, had 65 employees and worked across sectors including leisure, healthcare and student accommodation.
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Will Ing