Administrator warns of construction sector’s challenges after contractor’s collapse
The administrator of a specialist contractor has warned that “other strong businesses” in the construction sector face serious challenges as the economic foundations get shakier.
On Friday it emerged that facade specialist Speedclad had collapsed into administration with the loss of 44 jobs.
James Lumb and Howard Smith from Interpath Advisory were appointed joint administrators of Speedclad after rescue efforts failed. They are now seeking a buyer for the business, its assets and intellectual property.
James Lumb, Interpath Advisory
Lumb warned that Speedclad’s failure “is symptomatic of the growing challenges facing the construction sector, particularly cladding and facades businesses”.
He added: “Speedclad is historically profitable and has delivered notable projects such as the facades at the Wellington Place office development in Leeds. The company is a well-respected business with strong goodwill in the market from customers, suppliers and other stakeholders.
“Whilst we are hopeful of finding a solution for Speedclad, its administration suggests that other strong businesses could be facing similar challenges.”
Speedclad’s major contracts included six of the Wellington Place buildings in Leeds, Birmingham’s Symphony Hall, Cambridge Research Park, and Hull University’s West Campus.
The Northallerton-headquartered company had been a profitable business before the pandemic, generating £1m profit on revenues of £22m in the year to January 2020.
Wellington Place, Leeds
Its profits then fell 90% in the following year, as revenues dipped to £19m through the first year of the Covid-19 pandemic.
As the economic backdrop became tougher, one of its major contracts became loss-making, which had a “profound impact” on working capital.
This exacerbated problems caused by “a number of postponed or abandoned contracts, supply chain challenges, material and labour shortages, and rising prices”.
The business had employed around 80 people last year. But 44 staff have now been made redundant with a “small number” kept on to support the administrators.
