Building firm R&D collapses, putting 220 jobs at risk

Tough trading conditions and the harsh winter weather were blamed for the crisis at Dumfries-based R&D Construction, which has 220 staff.

Andrew Davison and Colin Dempster of Ernst & Young were called in as administrators to the firm and its parent company Robison & Davidson (Holdings) yesterday afternoon.

They said a review is under way into the financial position at the company, which is one of the largest construction firms in Dumfries and Galloway and supports a number of sub- contractors.

Davison said: "Difficult trading conditions arising from low demand in the private housing market that were further exacerbated by the harsh winter necessitated our appointment. We are currently undertaking a full review of the company's financial position."

Ernst & Young said it was too early to give further details of the situation at the company. The latest development comes after site staff were told to stay at home this week following a delay in paying wages last week.

R&D is the main contractor for a multi-million-pound new-build programme in the Dumfries and Stranraer areas, led by Dumfries and Galloway Housing Partnership (DGHP).

The contract includes social housing and 150 homes to be sold privately.

James Shirazi, director of investment and regeneration at DGHP, said: "We are very sorry to hear that R&D Construction has gone into administration, and we are especially sorry for their workforce. It is especially sad when it affects so many people locally, who we have worked very closely with over the last few years."

Local Labour MP Russell Brown said he met R&D employees in Stranraer and has since had contact with the administrators.

"The announcement that R&D has formally entered administration is obviously deeply worrying for the staff and I recognise just how they feel," he said. "It's a traumatic time for all concerned and we are doing everything we can to help and get as much information to them as possible.

"My first priority is to get R&D staff their wages as quickly as possible because I know some are really struggling. I've stressed to the administrator how important it is they get paid as soon as possible."

Weekly paid staff, who have not been at work since last Friday, were not expected to be paid yesterday when their wages were due.

R&D is the latest in a growing list of Scottish builders to call in administrators since the financial crisis cut demand for new homes while making it harder for firms to get credit.

Newbridge-based ERDC Group, which operated civil engineering and building divisions and also had a sports surfacing unit, went into administration in November with the loss of 73 jobs. That came just weeks after of hundreds of Scottish constructions jobs were axed by administrators handling collapsed builder Rok.