{"id":615513,"date":"2023-03-08T07:49:13","date_gmt":"2023-03-08T13:49:13","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/08\/revealed-the-30-firms-that-went-into-administration-in-february\/"},"modified":"2023-03-08T07:49:13","modified_gmt":"2023-03-08T13:49:13","slug":"revealed-the-30-firms-that-went-into-administration-in-february","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/08\/revealed-the-30-firms-that-went-into-administration-in-february\/","title":{"rendered":"Revealed: the 30 firms that went into administration in February"},"content":{"rendered":"
\n

Construction insolvencies are once again on the rise, with 30 companies going into administration in February \u2013 double the total for the previous month<\/a>.<\/p>\n

\u201cIt\u2019s worth noting that an uptick in insolvencies now is likely a result of the issues the sector \u2013 and wider economy \u2013 faced this time last year as inflation began to rise,\u201d said Max Jones, a director in Lloyds Bank\u2019s infrastructure and construction team.<\/p>\n

\u201cWith jobs often taking months to bid on and weaker pipelines not immediately impacting a business\u2019s financial performance, it\u2019s not a major surprise to see the country\u2019s economic worries from last year feeding through to 2023,\u201d he added.<\/p>\n

\u201cThe same applies to firms taking on contracts with tighter margins \u2013 it can take a while for these to mature and for the issues that operating on slim margins bring to come to the surface. Inflation won\u2019t have helped in that regard and businesses will this year start feeling the pinch from jobs priced 12 months ago.\u201d<\/p>\n

There were 34 construction-business failures in November<\/a>, although the monthly total fell to 23 in December<\/a> and 15 in January<\/a>.<\/p>\n

Underlying factors<\/h3>\n

The underlying factors behind construction-business insolvencies remain largely unchanged, said Construction Products Association (CPA) head of construction research Rebecca Larkin.<\/p>\n

\u201cFirms are still experiencing the same issues\u2026 namely high rates of input cost inflation across materials, labour, and fuel and energy, particularly if they are operating under fixed-price contracts signed a while ago,\u201d she said.<\/p>\n

Also, the construction market is now entering a period of weaker demand with a lower volume of available work, with Larkin adding that even projects that are about to start or are in progress \u201care taking longer to get the green light or move on to the next phase as costs rise, creating a cashflow problem\u201d.<\/p>\n

She warned of a \u201cknock-on effect through the supply chain\u201d resulting from previous insolvencies, with rising bad debt worsening the financial position of firms still in operation and \u201ca further round of cost increases related to the Bank of England\u2019s rapid monetary tightening throughout 2022\u201d.<\/p>\n

Begbies Traynor regional managing partner Julie Palmer said that supply chain issues \u201chave certainly eased\u201d in general, although material prices remain high. \u201cWhere there are issues affecting contracts in terms of price or delivery, the larger contractors will still manage their own position by withholding payments, which can cause rapid challenges for those down the subcontract chain,\u201d she added.<\/p>\n

Most of the companies on the list, provided to Construction News<\/em> by Creditsafe, were too small to be required to file detailed accounts with Companies House, but the highest-profile casualties in February were in the North East.<\/p>\n

Newcastle-based Metnor<\/a>, for example, went under in late February. It focused on projects in the leisure, student housing and healthcare sectors \u2013 one of its ongoing jobs was an 8,000 square metre training centre that was due to open later this year at Cramlington Hospital (pictured).<\/p>\n

Administrator FRP stated that Metnor \u201csuffered significant financial challenges\u201d over recent months amid contract losses and \u201cimmense pressure on profit margins from rising input, labour and raw material prices and supply issues against fixed-price contracts\u201d.<\/p>\n

More bad news for Metnor followed in early March when CN<\/em> reported that sister company Norstead<\/a> entered administration.<\/p>\n

The fall of Tolent Construction<\/a> and its subsidiaries, however, has even greater implications for the construction supply chain in the North East.<\/p>\n

Gateshead-based Tolent turned over \u00a3198m in its most recent set of annual accounts for the 2021 calendar year, and it ranked 67th in the CN100 list of major UK contractors.<\/p>\n

Yet it still posted a \u00a34m loss, and a series of financial difficulties, such as its loss-making \u00a385.5m Milburngate hotel project in Durham, led the firm to call in administrator Interpath on 13 February.<\/p>\n

Some of Tolent\u2019s employees and projects have since been taken over by smaller contractors, such as Sunderland-based Brims Construction<\/a> and regional social-housing specialist Re:Gen Group<\/a>.<\/p>\n

However, Tolent was so important to the local supply chain that its collapse has inevitably left subcontractors fearful for their own futures<\/a>.<\/p>\n

\n

\u201cIssues are moving up the supply chain as smaller firms collapse; insolvencies among main contractors have been on an upward trend over the past 18 months\u201d<\/p>\n

Rebecca Larkin, CPA<\/h4>\n<\/blockquote>\n

The demise of Metnor and Tolent \u2013 plus the appointment in early March<\/a> of liquidators for County Durham-based All Saints Construction \u2013 hints at structural weakness in the North East construction sector, but Glenigan noted a 19 per cent increase in project starts in the region over the past three months compared with September-November 2022.<\/p>\n

Regional construction output data from the Office for National Statistics (ONS) also suggests that activity in the North East is not performing any worse than other regions, said the CPA\u2019s Larkin.<\/p>\n

In fact, she told CN<\/em>: \u201cIn nominal terms it actually had the strongest growth in output in 2022.\u201d<\/p>\n

Looking at the UK as a whole, Larkin noted: \u201cGovernment insolvency data shows that specialist contractors account for the largest proportion of construction insolvencies, as they have done historically, but confirms that issues are moving up the supply chain as smaller firms collapse; insolvencies among main contractors have been on an upward trend over the last 18 months.\u201d<\/p>\n

Industrial concrete flooring specialist Malin was another relatively large company to enter administration in February. The Cheshire-based firm posted turnover of \u00a325.6m in 2021, but this was down from \u00a338.4m in 2020, although its cost of sales was lower.<\/p>\n

Reading-based civils contractor Outco Surfacing (formerly NMC Surfacing) appointed Interpath as administrator on 10 February. The company had been struggling for a while. Its most recent accounts revealed an operating loss of \u00a3986,000 from turnover of \u00a316m for the nine months ending 30 September 2021, due to what Outco described as \u201cchallenging market conditions\u201d and \u201cefforts to tie customers into longer-term agreements which affected our attempts to retain the same percentage of margins\u201d.<\/p>\n

On 1 December last year, Outco reached an agreement with its senior debt provider to reset the group\u2019s financial convenants \u201cto provide the flexibility and headroom to execute its future growth plans\u201d, and at the same time it secured \u00a33m of additional funding from its shareholders via loan notes.<\/p>\n

February also saw a major building contractor in the Welsh market enter administration, when RL Davies & Son (also known as RLD Construction) called in BDO on 24 February. While turnover in its last accounts (up to 31 December 2020) increased by about \u00a31m to \u00a313.9m, the company made a loss of \u00a31.9m compared with a \u00a3757,000 loss the year before.<\/p>\n

SD Samuels (Special Projects) Limited formally entered administration on 17 February, although the Essex-based roofing and cladding specialist filed a notice of intention<\/a> the previous month.<\/p>\n

The company had been a preferred supplier to top-tier contractors such as ISG, Kier, Morgan Sindall and Vinci, and was also involved in the new Anfield Road stand project at Liverpool FC for Buckingham Group.<\/p>\n

Insolvencies or increased insolvency risks are likely to be driven by which sector a company operates in, Larkin noted. \u201cContractors and subcontractors most closely linked to residential, commercial or industrial have been hardest hit by deteriorating confidence over the economic outlook, rising interest rates and squeezed household and business finances,\u201d she said.<\/p>\n

\u201cIn contrast, infrastructure, large projects and projects in regulated sectors are helping maintain activity, while those focused on public sector projects may find that clients are more understanding of cost issues.\u201d<\/p>\n

Grounds for optimism?<\/h3>\n

\u201cThe headline impact of business insolvencies always seems to be the immediate loss to businesses, economy and jobs, but we have been hearing about this anticipated wave of insolvencies for some time \u2013 indeed many have talked about how the businesses that remain can hoover up the leftovers from a culling of \u2018zombie businesses\u2019 and become stronger,\u201d said Emma King, partner at Eversheds Sutherland.<\/p>\n

There are some signs of a brighter future, though: according to the latest Purchasing Managers\u2019 Index (PMI) data from S&P Global and the Chartered Institute of Procurement & Supply (CIPS), the headline construction rating rose to 54.6 in February<\/a>, up from 48.4 in January and the highest monthly indicator of activity since May 2022.<\/p>\n

Lloyds Bank’s Jones also saw some reasons to be cheerful. \u201cThe high watermark of inflation looks to have been hit and contractors are optimistic it will fall further,\u201d he said. \u201cWhile housing looks set to face a tricky period as interest rates rise and the cost of living continues to affect households\u2019 spending power, the infrastructure market, underpinned by HS2, remains strong, while demand in London is providing a healthy pipeline of work in the commercial sector.\u201d<\/p>\n

Larkin was more cautious, arguing: \u201cThere is likely to be more financial strain [on construction businesses] as lower demand and lower activity combine with existing inflationary and financial pressures, which so far, have been alongside relatively strong demand.<\/p>\n

\u201cThere is also likely to be more of the \u2018second round\u2019 effect as bad debts left by those that have already collapsed worsen the finances of those still in operation.\u201d<\/p>\n

As if to underline her point, the first week of March saw Jersey contractor Camerons Ltd cease trading<\/a>, the collapse<\/a> of Hertfordshire-based Jarvis Contracting, and cladding contractor Jessella call in<\/a> FRP Advisory.<\/p>\n

\u201cWe expect insolvency across the board to increase this year for SMEs as they continue to grapple with the ongoing cost-of-living crisis, energy prices, flat consumer confidence and inflation that is yet to reduce as it\u2019s brought more under control,\u201d said Palmer.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company name<\/td>\nLocation<\/td>\nDate of administration<\/td>\nType of documents filed<\/td>\nConstruction activities<\/td>\n<\/tr>\n
ALMA SC LIMITED<\/td>\nBolton<\/td>\n9 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
ARCH REALISATIONS 2023 LIMITED<\/td>\nLancashire<\/td>\n17 Feb<\/td>\nAdministration order<\/td>\nPlastering<\/td>\n<\/tr>\n
BUILT4LEARNING LIMITED<\/td>\nLancashire<\/td>\n28 Feb<\/td>\nAdministration order<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
CAMBERLEYBELL LTD<\/td>\nSurrey<\/td>\n20 Feb<\/td>\nAdministrative receiver appointed<\/td>\nConstruction of domestic buildings<\/td>\n<\/tr>\n
CHARWORTH HOMES LIMITED<\/td>\nGrimsby<\/td>\n6 Feb<\/td>\nAdministration order<\/td>\nConstruction of domestic buildings<\/td>\n<\/tr>\n
CROSSLANE (HUNTINGDON STREET NOTTINGHAM) LIMITED<\/td>\nManchester<\/td>\n1 Feb<\/td>\nAdministration order<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
ETS 2023 LIMITED<\/td>\nOxfordshire<\/td>\n17 Feb<\/td>\nAdministration order<\/td>\nPlumbing, heat and air-conditioning installation<\/td>\n<\/tr>\n
EUROPA HOUSE DEVELOPMENT LIMITED<\/td>\nNorthampton<\/td>\n20 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
GOLDBERG DEVELOPMENT GROUP LIMITED<\/td>\nCroydon<\/td>\n20 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
HENRAD PLUMBING & HEATING LTD<\/td>\nColchester<\/td>\n27 Feb<\/td>\nAdministration order<\/td>\nPlumbing, heat and air-conditioning installation<\/td>\n<\/tr>\n
J & J HARRISON LIMITED<\/td>\nOldham<\/td>\n21 Feb<\/td>\nAdministration order<\/td>\nPlumbing, heat and air-conditioning installation<\/td>\n<\/tr>\n
KEMARK LIMITED<\/td>\nArmagh<\/td>\n27 Feb<\/td>\nIn receivership \/ administration<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
LECI CONSTRUCTION LTD<\/td>\nBuckinghamshire<\/td>\n15 Feb<\/td>\nAdministration order<\/td>\nConstruction of commercial buildings<\/td>\n<\/tr>\n
MALAYSIAN INVEST LIMITED<\/td>\nLondon<\/td>\n22 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
MALIN INDUSTRIAL CONCRETE FLOORS LIMITED<\/td>\nCheshire<\/td>\n7 Feb<\/td>\nAdministration order<\/td>\nSite preparation<\/td>\n<\/tr>\n
ME DEVELOPMENTS (LONG SUTTON) LIMITED<\/td>\nSurrey<\/td>\n23 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
ME DEVELOPMENTS (UPTON GREY) LIMITED<\/td>\nSurrey<\/td>\n9 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
METNOR CONSTRUCTION LIMITED<\/td>\nNewcastle<\/td>\n24 Feb<\/td>\nAdministration order<\/td>\nConstruction of commercial buildings<\/td>\n<\/tr>\n
ORMISTON HOUSE LTD<\/td>\nNorthampton<\/td>\n20 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
OUTCO SURFACING LIMITED<\/td>\nReading<\/td>\n7 Feb<\/td>\nAdministration order<\/td>\nConstruction of roads and motorways<\/td>\n<\/tr>\n
PARADIGM WELLINGTON LIMITED<\/td>\nTeesside<\/td>\n2 Feb<\/td>\nAdministration order<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
R. L. DAVIES & SON LIMITED<\/td>\nClwyd<\/td>\n22 Feb<\/td>\nAdministration order<\/td>\nConstruction of commercial buildings<\/td>\n<\/tr>\n
RSDEV LIMITED<\/td>\nBolton<\/td>\n9 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
S D SAMUELS (SPECIAL PROJECTS) LIMITED<\/td>\nEssex<\/td>\n17 Feb<\/td>\nAdministration order<\/td>\nRoofing activities<\/td>\n<\/tr>\n
SOCIAL ENERGY LTD<\/td>\nYorkshire<\/td>\n27 Feb<\/td>\nAdministration order<\/td>\nConstruction of utility projects for electricity and telecommunications<\/td>\n<\/tr>\n
TOLENT CONSTRUCTION LIMITED<\/td>\nGateshead<\/td>\n17 Feb<\/td>\nAdministration order<\/td>\nConstruction of commercial buildings<\/td>\n<\/tr>\n
TOLENT LIVING LIMITED<\/td>\nGateshead<\/td>\n17 Feb<\/td>\nAdministration order<\/td>\nConstruction of domestic buildings<\/td>\n<\/tr>\n
TOLENT SOLUTIONS LIMITED<\/td>\nGateshead<\/td>\n17 Feb<\/td>\nAdministration order<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n
ULTRA SUREFIRE LIMITED<\/td>\nBuckinghamshire<\/td>\n24 Feb<\/td>\nAdministration order<\/td>\nOther construction installation<\/td>\n<\/tr>\n
WAYPOINT DEVELOPMENT AND CONSTRUCTION LIMITED<\/td>\nLancashire<\/td>\n2 Feb<\/td>\nAdministrative receiver appointed<\/td>\nDevelopment of building projects<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

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

Construction insolvencies are once again on the rise, with 30 companies going into administration in February \u2013 double the total for the previous month. \u201cIt\u2019s worth noting that an uptick in insolvencies now is likely a result of the issues the sector \u2013 and wider economy \u2013 faced this time last year as inflation began<\/p>\n","protected":false},"author":1,"featured_media":615514,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[204,966],"tags":[],"class_list":["post-615513","post","type-post","status-publish","format-standard","has-post-thumbnail","category-firms","category-revealed"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/615513","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=615513"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/615513\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/615514"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=615513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=615513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=615513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}