Unsecured creditors of London-based groundworks specialist Corbyn Construction are unlikely to recoup any money they are owed, administrators have revealed.
In an update yesterday (14 July), administrators at FRP Advisory said it was “currently estimated” there will “not be sufficient funds” to pay the contractor’s unsecured creditors.
Corbyn Construction owed its supply chain nearly £4.4m at the time it fell into administration in May, the update revealed.
The firm’s eight staff, which are owed around £43,000, are also unlikely to see any money, FRP’s report said.
Corbyn Construction, which had been trading for around 35 years, was hit by cashflow problems partly due to suppliers reducing their credit terms, the report said.
It was also facing the threat of a winding-up petition from HMRC when FRP was appointed. The contractor owed HMRC around £1.6m, the update showed.
Corbyn Construction’s problems started when it suffered a £5.2m loss in its financial year to the end of June 2022. The war in Ukraine, supply chain pressures, increased labour costs and raw material shortages were blamed for the deficit.
The firm edged back into profit in the following year but its revenue was down to £32.8m, with fewer tenders won as its management focused on higher-margin jobs, the administrators’ report said.
Corbyn Construction delivered groundworks and reinforced concrete frames for large main contractors, developers and housing associations across the capital.
Clients included Galliford Try, Hill, Weston Homes, Telford Homes, Mulalley, Higgins and Taylor Wimpey.
As well as its eight staff – including one director – the contractor employed a “large number of subcontractors and self-employed workers”, the administrators’ report said.
NatWest is a secured creditor and is owed around £2.6m. However, FRP said the amount the bank gets back will depend on how much is secured from selling Corbyn’s property and land.
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James Wilmore