Construction firm failures in April decreased by almost a third compared with the previous month.<\/p>\n
This reversed a trend seen in February and March when administration figures soared<\/a>, with the number of firms going under rising to 32 and 31 respectively.<\/p>\n Data from Creditsafe shows that 21 firms entered administration in April \u2013 a drop of 32 per cent compared with March.<\/p>\n However, the latest figure is still more than 60 per cent higher than in April 2024, when there were just 13 business failures.<\/p>\n And one insolvency expert told Construction News<\/em> that the sector should not expect a \u201cwhite knight\u201d to arrive anytime soon.<\/p>\n Essex-based Breyer Group was the highest-turnover firm to enter into administration last month, but one of its divisions was swiftly rescued.<\/p>\n The \u00a383.6m-revenue firm<\/a>, which specialises in roofing, repair and refurbishment services, was hit by a \u201cnumber of financial difficulties and cashflow constraints as a result of certain contracts\u201d, a statement by administrators from RSM UK said.<\/p>\n It led to the 69-year-old company facing \u201csignificant pressure from creditors\u201d, the administrators added.<\/p>\n In its last filed accounts, Breyer reported a pre-tax profit of \u00a3637,084 in the year to 31 May 2023 and employed a monthly average of 254 staff.<\/p>\n The firm operated across the South and South East of England and its clients include councils, housing associations and major landlords.<\/p>\n Just a fortnight after Breyer called in RSM, building maintenance and retrofit firm Cardo Group bought its roofing division<\/a>.<\/p>\n The Cardiff-based group has also taken on Breyer\u2019s repairs and maintenance contract with Kingston-upon-Thames Council, which covers around 6,000 homes.<\/p>\n Breyer was awarded a \u00a3163m contract with the council last summer.<\/p>\n Both agreements mean nearly 100 jobs have been protected, according to Cardo.<\/p>\n Another casualty in April was London-based residential developer Sheen Lane Developments \u2013 but it too was rescued<\/a>.<\/p>\n In its most recent annual accounts, for the year to 30 April 2023, Sheen Lane posted a pre-tax loss of \u00a327m from turnover of \u00a350.5m, with net liabilities of \u00a38.5m.<\/p>\n These were worse figures than the year before, when the firm made a loss of \u00a35.8m from revenue of \u00a372.2m.<\/p>\n In the latest accounts, directors said the loss was due to \u201cexceptional circumstances\u201d amid high interest rates and market uncertainty.<\/p>\n Soon after administrators from Quantuma were called in on 1 April, they announced they had secured the survival of Sheen Lane through a pre-pack administration deal with Radio City Developments Ltd.<\/p>\n All 22 of Sheen Lane\u2019s staff have transferred to Radio City Developments, Quantuma said. The new owner\u2019s majority shareholder, Martin Tynan, is also the owner of Sheen Lane, according to Companies House records.\u00a0<\/span><\/p>\n David Hudson, restructuring advisory partner at FRP, said: \u201cInsolvency numbers are likely to remain elevated for the foreseeable future with weaker appetite from would-be investors a key factor.<\/p>\n \u201cWhereas in the past distressed companies might have been able to avoid the worst by securing fresh capital or selling to a competitor or consolidator, market stagnation has reduced the likelihood of a white knight arriving.\u201d<\/p>\n Freddy Khalastchi, business recovery partner and insolvency practitioner at Menzies, said despite April\u2019s drop in administrations it was \u201ctoo early\u201d to call it a recovery.<\/p>\n \u201cWhile a single-month dip in the number of failures offers some respite, it\u2019s more likely a pause than the start of a turnaround,\u201d he told CN<\/em>.<\/p>\n \u201cFixed-price contracts, cost inflation and tighter lending conditions continue to strain firms\u2019 working capital.<\/p>\n \u201cIn this environment, early warning signs must not be ignored.\u201d<\/p>\n His comments were echoed by Gareth Belsham, director of Bloom Building Consultancy, who feels the drop in total value of new construction orders has hit the sector hard.<\/p>\n \u201cEncouraging though April\u2019s figures are, it is too early to talk of a turnaround on the insolvency front. We\u2019re in \u2018bottoming out\u2019 rather than bounce territory,\u201d he told CN<\/em>.<\/p>\n \u201cWhile a post-mortem on most of the firms that went bust in April would probably record insufficient cashflow as the ultimate cause of death, many owe their failure to longer-term issues \u2013 declining orders and dangerously tight margins.<\/p>\n \u201cOfficial data shows that the total value of new construction orders fell late last year, and by the end of 2024 it stood at the lowest level seen since the first Covid lockdown of 2020<\/a>.<\/p>\n \u201cIn response, some contractors bid extremely low just to win work, and in so doing shaved their margins perilously thin.\u201d<\/p>\n Peter Vinden, director of advisory services at Leonard Curtis, said the latest Creditsafe data showed there had been little change in the construction sector since last year.<\/p>\n \u201cIt feels to me like we are simply experiencing a lull before an impending storm,\u201d he said.<\/p>\n \u201cThe reality is that business confidence in general is down, we are all wondering what is coming next. Orders for new construction are depressed and our contractor clients are telling me that they are feeling sustained pressure to slash margins and to bid for work at breakeven levels, or even below, in order to keep the lights on.\u201d<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Construction firm failures in April decreased by almost a third compared with the previous month. This reversed a trend seen in February and March when administration figures soared, with the number of firms going under rising to 32 and 31 respectively. Data from Creditsafe shows that 21 firms entered administration in April \u2013 a drop …<\/p>\n","protected":false},"author":155153,"featured_media":484746,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[554,552,79557],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\nGloomy outlook<\/h3>\n
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\n COMPANY NAME<\/td>\n LOCATION<\/td>\n DATE OF ADMINISTRATION<\/td>\n DOCUMENTS FILED<\/td>\n DESCRIPTION OF COMPANY ACTIVITIES<\/td>\n<\/tr>\n \n BLACKBERRY TRADING LTD<\/td>\n Chester<\/td>\n 28 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Development of building projects<\/td>\n<\/tr>\n \n BREYER GROUP PLC<\/td>\n Essex<\/td>\n 08 Apr<\/td>\n In administration<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n CAMDEN SLOANE LTD<\/td>\n Doncaster<\/td>\n 24 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n D.E.PLANT\u00a0 LTD<\/td>\n Royston<\/td>\n 23 Apr<\/td>\n In administration<\/td>\n Other specialised construction activities n.e.c.<\/td>\n<\/tr>\n \n DOVER CITADEL LTD<\/td>\n Hertfordshire<\/td>\n 16 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Construction of commercial buildings<\/td>\n<\/tr>\n \n EDIN DEVELOPMENTS LTD<\/td>\n Berkshire<\/td>\n 03 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n EXCALIBUR BUILDING CONTRACTORS LTD<\/td>\n Weybridge<\/td>\n 14 Apr<\/td>\n In Administration<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n GC DEVELOPMENTS (MIDLANDS) LTD<\/td>\n Derby<\/td>\n 06 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Development of building projects<\/td>\n<\/tr>\n \n GLD PROPERTIES INVESTMENT LTD<\/td>\n London<\/td>\n 28 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Other construction installation<\/td>\n<\/tr>\n \n JAMES LLOYD DEVELOPERS (CRICCIETH) LTD<\/td>\n Chester<\/td>\n 24 Apr<\/td>\n In administration<\/td>\n Development of building projects<\/td>\n<\/tr>\n \n JEM DEVELOPMENTS LTD<\/td>\n Grimsby<\/td>\n 30 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Development of building projects<\/td>\n<\/tr>\n \n OOB LTD<\/td>\n London<\/td>\n 03 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Other specialised construction activities n.e.c.<\/td>\n<\/tr>\n \n PRIMA HOMES GROUP LTD<\/td>\n Manchester<\/td>\n 17 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Development of building projects<\/td>\n<\/tr>\n \n PROVIDENCE GATE DEVELOPMENTS LTD<\/td>\n Preston<\/td>\n 23 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n PSP REALISATIONS 2025 LTD<\/td>\n Cheshire<\/td>\n 17 Apr<\/td>\n In administration<\/td>\n Electrical installation<\/td>\n<\/tr>\n \n RODELLS LTD<\/td>\n London<\/td>\n 01 Apr<\/td>\n In administration<\/td>\n Scaffold erection<\/td>\n<\/tr>\n \n SHEEN LANE DEVELOPMENTS LTD<\/td>\n London<\/td>\n 01 Apr<\/td>\n In administration<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n SHRUBLANDS BARNS LTD<\/td>\n Suffolk<\/td>\n 28 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Development of building projects<\/td>\n<\/tr>\n \n SOVEREIGN DEVELOPMENT GROUP LTD<\/td>\n Manchester<\/td>\n 03 Apr<\/td>\n Appointment of receiver\/manager<\/td>\n Construction of domestic buildings<\/td>\n<\/tr>\n \n SSH CONSERVATION LTD<\/td>\n Somerset<\/td>\n 28 Apr<\/td>\n In administration<\/td>\n Other specialised construction activities n.e.c.<\/td>\n<\/tr>\n \n THRIPLOW SWEEPERS LTD<\/td>\n Royston<\/td>\n 23 Apr<\/td>\n In administration<\/td>\n Other specialised construction activities n.e.c.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n