MBO was behind collapse of Yorkshire contractor

Costs from an earlier management buyout caused the collapse of a 160 year-old contractor, George Hurst & Sons, according to a report released by administrators.

The 157 year-old business closed its doors in April after calling in administrators from Begbies Traynor.

57 jobs were lost at Mexborough-based George Hurst & Sons after it was hit by losses on three major contracts.

Now it has emerged that costs relating to a management buyout in 2008 was partially to blame for the collapse. The plumbing and sanitary engineering firm had been a family firm since it was founded in 1860 and passed from father to son – and daughter on one occasion during the Second World War.

It reportedly owed £2.5m to unsecured creditors when secured creditor Natwest called in the administrators.

In its most recent accounts, for the year to October 2015, showed a slight pre-tax profit of £142,000 on a turnover of £13m.

Years of decline following the MBO helped to saddle it with £900,000 debts and by 2015 the firm lost its Yorbuild framework position which accounted for three quarters of its work.

The outcome for unsecured creditors is not yet known according to the latest report by administrators.