Wed, 11 Jan 2023 | ADMINISTRATION
Nottingham-based contractor DAKO Construction has fallen into administration amid increasing pressure on companies in the UK construction sector. Trade publication Construction Enquirer reported that the company ceased trading on Monday, closing its offices and sending employees home.
The company, which was founded in 2018, has seemingly succumbed to many of the headwinds currently impacting the wider construction industry, including rising material costs, late payments, the lingering effects of the COVID-19 pandemic and broader economic pressures.
Writing to staff, DAKO founder and Managing Director Assan Hussain said: “The last 14 months have been challenging for the business as it has had to deal with COVID, a recession and soaring material prices and although we are working hard to navigate through, recent non payment from certain clients has meant the situation has become untenable.”
Construction Enquirer quoted a source close to the matter, who said: “DAKO took on student accommodation work from North Midland Construction when it went bust in 2021. It looks like they took on more than they could deal with.”
The firm’s collapse comes in the wake of warnings that the UK construction industry could see in excess of 6,000 insolvencies during 2023. Red Flag Alert has estimated that bad debt within the sector currently stands at around £300 million and warned that, as more firms are pulled into distress, debt levels could rise to around £1 billion by the start of next year.
In its most recent financial reports at Companies House, DAKO Construction’s current assets were valued at close to £2.25 million, with creditors owed approximately £1.9 million and the company’s total equity standing at £314,941.
TheBusinessDesk.com reports that several of DAKO’s creditors have taken to social media in the wake of the company’s collapse, revealing that they will miss out on large sums they were owed as a result of the administration.
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