Blair Nimmo and Geoffrey Jacobs of accountancy firm KPMG LLP were yesterday appointed joint administrators of Central Building Contractors (Glasgow). The privately owned, family-run company was established in 1971, providing a range of construction design, development and maintenance services throughout Scotland. It had 159 staff.
In recent years, it suffered from challenging trading conditions in the construction sector and encountered reduced margins, contract disputes and delays in starting various significant projects.
“Despite the directors taking various actions to address the position, these factors left the company with a significant funding shortfall,” said KPMG. At the time of appointment, as per government guidelines, all projects had been closed for the previous five weeks.
The accountancy firm added that as with most insolvencies in the construction sector, it is not possible for the company to trade in administration, even if lockdown restrictions are lifted imminently. Consequently, 148 staff have been made redundant immediately following appointment, with 11 kept on to help with the administration process.
Administrators are rapidly exploring whether an early sale of some of the business and assets can be secured. The company’s assets include three freehold properties, numerous contracts, order book, work in progress and construction equipment.
Blair Nimmo, joint administrator and KPMG’s UK head of restructuring, said the building firm “has a rich history and is a well-known and highly regarded business in Scotland, but, despite the efforts of the directors, the business faced a range of cashflow challenges in recent times, which were amplified by the recent Covid-19 lockdown”.
He also commented: “We would encourage any party who has an interest in acquiring any part of the business and assets to contact us as soon as possible.”
James McAlpine, director at the construction firm, said: “Already difficult trading conditions have been greatly exacerbated by Covid-19, which has made our financial position unsustainable. It is with significant regret that administration has been necessary. We have been very fortunate to have loyal and hard-working staff, a supportive supply chain and professional partners, many of whom have worked closely with the business for a great many years.
“We will work closely with the administrators to ensure every possible assistance is provided to all our employees during this exceptionally difficult time.”
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