120 jobs at risk as administrators take over construction group

Construction group Pochin’s entered administration yesterday, hours after subcontractors had been shut out of a Staffordshire site.

Subcontractors turning up for work on the Hilton Garden Inn development in Hanley were turned away before the collapse of the Cheshire construction company was confirmed.

Sarah O’Toole and Jason Bell of Grant Thornton have been appointed joint administrators to eight entities within the Pochin’s group of companies.

The family-owned property and construction business employed 120 people.

O’Toole said: “Whilst it is very early days, this may result in a number of redundancies and the companies ceasing to trade. The joint administrators will continue to review options to ensure the best possible outcome for creditors.”

The group’s board explored a number of options in an effort to preserve the group’s trading status over recent months, including injections of significant levels of capital from shareholders and the sale of the group’s property portfolio.

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.

This includes the main trading entities of Pochin’s Ltd, Pochin Construction Ltd and six other subsidiaries.

In the past year the construction business, with a new management team on board, had established a platform for growth, developed excellent client relationships and secured a pipeline of profitable new work and opportunities.

However, despite that renewed optimism for the future, the legacy issues from earlier contracts became too great a burden leading to difficult trading conditions.

For the year to February 28, 2018, Pochin’s reported turnover of £59.2m compared with £68.4m the prior period. It also slipped from a pre-tax profit of £4.98m to a pre-tax loss of £3.43m, which it blamed on the poor performance of a single residential construction contract which had been completed.