Wed, 22 Feb 2023 | ADMINISTRATION
Administrators are seeking to realise the assets of Newcastle-based construction firm Metnor Construction following the company’s collapse. Steve Ross and Allan Kelly of FRP Advisory were appointed as joint administrators to Metnor, a major North East construction business, on February 21.
The administration comes just months after the company, which is part of the wider Metnor Group, announced that it had increased its turnover to £63 million from £48 million during 2021, due to the completion of COVID-delayed projects and new contract wins.
Despite this, Metnor Construction began to suffer significant financial challenges over recent months, resulting from contract losses, supply chain issues and rising prices for raw materials. This forced the business to appoint administrators, with all 80 employees made redundant.
FRP partner and joint administrator Steve Ross commented: "Rapid inflation is causing havoc on the profit margins of businesses across the economy. Metnor Construction was a long-established and major main North East building contractor that has delivered on significant projects across the UK but wasn't immune to the impact of rising costs, which ultimately led to its insolvency.”
"Regrettably, the business is unable to continue trading and sustain the workforce. We're working with impacted staff to make applications to the Redundancy Payments Services and maximise recoveries from the assets."
Metnor Construction was founded in 2002 and worked across wide range of projects throughout the UK, including contracts for care homes, hotels, retail, student accommodation and data centres.
In its year end accounts for 2021, Metnor Construction reported a pre-tax profit of £942,000, following a £2.3 million pre-tax loss a year earlier. At the time, the firm’s fixed assets were valued at £393,000, current assets at £18.9 million and total assets at £4.8 million.
Read about soaring insolvencies in the construction sector.
How to find M&A value during an economic downturn.
Click here to view the UK's latest distressed businesses.
View recent UK administrations.
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