Wed, 25 Sep 2024 | ADMINISTRATION
A group of construction sector businesses based in County Durham have fallen into administration, leading to the loss of the majority of jobs. Like many companies in the UK construction sector, the businesses had faced challenging trading conditions over recent months.
James Lumb and James Clark of Interpath Advisory were appointed joint administrators of PSP Architectural Ltd (Architectural), PSP Aluminium Ltd (Aluminium) and Pressed Steel Products Ltd (Pressed Steel) on September 20. The businesses are connected by virtue of common ownership and directorships.
Architectural and Aluminium traded from neighbouring sites in County Durham, operating as manufacturers to the construction sector. Architectural supplied facades and cladding, while Aluminium supplied window and door frames, principally made from aluminium. Pressed Steel was a property holding company that owned two freehold sites, including Architectural’s property on Shildon’s All Saints Industrial Estate.
The businesses had been impacted by trading difficulties over the last few months, experiencing an expected fall in seasonal sales in the winter of 2023. However, sales did not recover as expected during 2024, leading to cashflow and liquidity issues.
Directors were able to secure additional temporary funding in May 2024 in order to sustain the businesses, with an increase in sales forecast. However, the expected improvement did not occur, leading to the directors deciding to appoint administrators.
Upon the appointment of the joint administrators, Architectural and Aluminium both ceased trading, leading to 64 employees at Architectural being made redundant, alongside all 20 employees at Aluminium.
Two Architectural employees have been retained to assist the joint administrators as they comply with their statutory duties. The Architectural and Aluminium businesses are now being marketed for sale by the joint administrators.
Joint administrator and Interpath Managing Director James Lumb commented: The challenges facing the construction sector in the UK are widespread. In particular, we are seeing issues in building products where - even with positive sentiment in end user markets such as housing around government policy and reducing interest rates - there is a long lag to sales.”
“That is exactly what happened with PSP; the business had invested heavily in state-of-the-art equipment and IT solutions but was unable to withstand soft demand in the short term. We are seeking buyers for the business and any interested parties should contact us as soon as possible.”
"In the meantime, regrettably, the business couldn't continue trading and redundancies were made. We have a team supporting employees impacted by the appointment and will work with them to make representations to the Redundancy Payments Services."
In accounts for the year ending December 31 2022, PSP Architectural Limited’s fixed assets were valued at close to £2.2 million and current assets at around £3.7 million, with total equity amounting to approximately £854,000.
In accounts for the same period, PSP Aluminium Limited’s fixed assets were valued at around £161,000 and current assets at £1.4 million, while total equity stood at approximately £504,000.
Pressed Steel Products Limited, meanwhile, reported fixed assets valued at approximately £1.5 million and current assets of around £332,000, with total equity of £1.3 million.
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