Wed, 24 Aug 2022 | ADMINISTRATION
Northallerton-based building cladding and façade specialist Speedclad has fallen into administration, with Interpath Advisory exploring a potential sale of the business, its assets and intellectual property. In its accounts for 2021, the company reported turnover of around £18 million, but saw its operating profits fall from £958,144 in 2020 to just under £99,000.
Despite recently working on several large projects, including a major hotel in Milton Keynes and the Birmingham Symphony Hall, the business was said to have encountered difficult trading conditions, with several contracts postponed or abandoned, shortages of materials and labour and rising prices.
In its accounts for the year ending January 31 2021, company director Anthony Blake also said that the industry had seen a “significant increase” in professional indemnity (PI) insurance costs in the wake of the COVID-19 pandemic. Blake added that, following the collapse of Carillion and Interserve, there was an “unprecedented lack of confidence by the credit insurance market in the traditional largo construction companies.”
Blake continued: “The company policy to have credit insurance over on all clients has had a direct impact on the company and its ability to secure works covered by such insurance. On a number of occasions, the company has secured advance payments to remove risk."
These pre-existing difficulties were exacerbated by mounting problems across the wider construction industry, leading to the appointment of Interpath Advisory as administrators and 44 staff being made redundant, with a small number retained to help with the administration process.
Joint administrator and Interpath Managing Director James Lumb said: "The administration of Speedclad is symptomatic of the growing challenges facing the construction sector, particularly cladding and facades businesses. Speedclad is historically profitable and has delivered notable projects such as the facades at the Wellington Place office development in Leeds.”
While the administrators are hoping to secure a sale of the business and its assets, Lumb said that current conditions mean that many more otherwise viable businesses in the construction space could be facing distress and possible insolvency.
Lumb added: "The company is a well-respected business with strong goodwill in the market from customers, suppliers and other stakeholders. Whilst we are hopeful of finding a solution for Speedclad, its administration suggests that other strong businesses could be facing similar challenges."
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