Wed, 07 Aug 2019 | ADMINISTRATION
The majority of North West based Pochin's Group has gone into administration as a result of contract issues.
Administrators Grant Thornton UK LLP have taken charge of eight divisions of the construction group, including the main trading companies Pochin's Ltd and Pochin Construction Ltd. The administrators are currently looking for a buyer for the divisions, either as a group or individually.
The administrators have confirmed that the business suffered as a result of legacy issues from earlier contracts, which they say have become too great a burden for the company and have resulted in very difficult trading conditions.
The Cheshire based company was founded in the 1930s and has earned a strong reputation across the region. During World War Two, it was even responsible for producing ammunition boxes for the Army and rum jars for the Navy, as well as building barracks for the RAF. However, last year the construction arm of Pochin's lost £6.2 million on £50 million revenue as a result of a single loss-making contract in Manchester, leaving it struggling to stay afloat.
The new management team in charge of the business have reportedly explored a number of options ahead of entering administration, including the injection of additional capital from shareholders and the sale of the construction group's property portfolio. However, none of these measures proved to be significant enough to save the group from administration.
"Despite these efforts, the impact of the challenges have proven insurmountable and the difficult decision was reached by the directors to place a number of entities in the group into administration," Grant Thornton said. "This includes the main trading entities of Pochin’s Ltd, Pochin Construction Ltd and six other subsidiaries."
Joint administrator Sarah O’Toole added that they would continue to review the options to find the best possible outcome for creditors, including the potential sale of the affected divisions.
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