{"id":613656,"date":"2023-03-03T06:49:42","date_gmt":"2023-03-03T12:49:42","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/03\/cash-strapped-cladding-firm-appoints-administrators\/"},"modified":"2023-03-03T06:49:42","modified_gmt":"2023-03-03T12:49:42","slug":"cash-strapped-cladding-firm-appoints-administrators","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/03\/cash-strapped-cladding-firm-appoints-administrators\/","title":{"rendered":"Cash-strapped cladding firm appoints administrators"},"content":{"rendered":"
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Cladding contractor Jessella has appointed FRP Advisory as administrator after its cash position soured.<\/p>\n

The St Albans-based contractor more than doubled its pre-tax profit to \u00a31.4m in the year to March 2022, while increasing turnover to \u00a339.8m compared with \u00a321.8m the year prior.<\/p>\n

But its cash position at the end of 2021\/22 had collapsed from \u00a31.4m to nothing, although the company still paid out a dividend of \u00a3478,000. DRS Bond Management managing director Chris Davies said that combination \u201cnever should have happened\u201d, calling it an \u201canathema\u201d.<\/p>\n

\u201cIf they didn\u2019t have any cash in the bank, why are they paying themselves a dividend?\u201d he added. \u201cAll you are doing is chipping away at the foundations of your house.\u201d<\/p>\n

Construction News <\/i>approached Jessella and FRP Advisory for comment.<\/p>\n

Jessella also took on \u00a3334,000 of bank overdrafts in 2021\/22, which Davies said amounted to relying on banks for its capital. \u201cDepending on bank support for working capital leaves companies at their most vulnerable,\u201d he said.<\/p>\n

As well as losing ultimate control of the firm, it also means that a single missed payment from a client could lead to a firm breaching its overdraft, especially if that payment is particularly high, Davies noted.<\/p>\n

\u201cIf you have a job that is delayed and you have to accelerate it, you don’t have the cash to do it,\u201d he added.<\/p>\n

Jessella noted in its 2021\/22 annual report that the overdrafts and zero-cash situation \u201cweaken the liquidity position of the company\u201d, but it claimed that receipts recovered over the past year meant there was still \u201cadequate working capital\u201d.<\/p>\n

The amount the firm owed its suppliers also grew, to \u00a36.5m compared with \u00a34.4m in the previous financial year.<\/p>\n

The annual report also warned that the firm’s projects were impacted by \u201cinflationary increases in staff and materials costs\u201d. It had also struggled with the \u201cincreased use of subcontractors to help fulfil contracts\u201d.<\/p>\n

It added: \u201cA hangover effect of Brexit led to supply chain shortages within the industry, that in turn led to further increased costs of materials\u201d.<\/p>\n

Jessella employed an average of 42 people in 2021\/22.<\/p>\n<\/p><\/div>\n

Related articles<\/h3>\n<\/p><\/div>\n

Read More<\/a>
\n Joshua Stein<\/p>\n","protected":false},"excerpt":{"rendered":"

Cladding contractor Jessella has appointed FRP Advisory as administrator after its cash position soured. The St Albans-based contractor more than doubled its pre-tax profit to \u00a31.4m in the year to March 2022, while increasing turnover to \u00a339.8m compared with \u00a321.8m the year prior. But its cash position at the end of 2021\/22 had collapsed from<\/p>\n","protected":false},"author":1,"featured_media":613657,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2126,101729],"tags":[],"class_list":{"0":"post-613656","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-cash-strapped","8":"category-cladding"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/613656","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=613656"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/613656\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/613657"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=613656"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=613656"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=613656"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}