Oban-based construction contractor goes into administration

Tue, 12 May 2020 | ADMINISTRATION

Scottish construction business Neil McGougan Limited has gone into administration after suffering severe cashflow disruption due to the coronavirus lockdown. The family-owned contractor, founded in 1986, is the largest construction business in the town of Oban.

With a wide client base throughout the surrounding Argyll and Bute and West Highlands areas, the company provides a range of construction services. Joint administrator Derek Forsyth described the firm as “long-established and highly respected”.

It had recently been appointed to West Highland Housing Association’s £3.5 million major repairs and investment programme. However, in line with coronavirus restrictions on construction activity at non-essential sites, the company’s projects have been shut for over five weeks.

This closure impacted the company’s cash flow and it ceased trading last week. 20 staff have been made redundant, with Derek Forsyth and Blair Milne from Campbell Dallas appointed as joint-administrators.

Forsyth said: “The directors did everything possible to keep the business trading. However, the scale of cashflow problems and the impact of the lockdown left them with no alternative other than to place the business in administration.”

“We will now focus on winding up the business and providing as much help as possible for the employees.”

The administrators will seek buyers for the company assets, including plant, vehicles and equipment, with interested parties asked to make contact as soon as possible. In its most recent accounts, made up to the year ending December 31 2018, the company registered net current assets of £287,800.

Neil McGougan’s administration follows that of Glasgow-based Central Building Contractors at the end of April, as coronavirus exacerbated difficult trading conditions in Scotland’s construction industry.

First Minister Nicola Sturgeon has confirmed that non-essential construction work in Scotland will remain banned, despite Prime Minister Boris Johnson allowing construction in England to resume.

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