Buckingham Group halts trade after failed search for savior

Lead contractor Buckingham Group has gone out of business, becoming the largest contractor to do so since Carillion’s collapse in January 2018.

The £665million business, which has Liverpool FC’s new Anfield Road stand among its ongoing projects, filed a notice of intent to appoint directors on Wednesday (August 16th).

A statement from the company today said it suffered heavy losses on three unnamed stadium and arena contracts, as well as “substantial earthworks” in Coventry.

A statement from the company said: “For several months and up to this week, the Board of Directors worked with specialist advisors to seek to bring in substantial new investment into the business which would have enabled the company to continue. to operate without interruption.. However, this initiative ultimately ended in failure.

The success of the four contracts combined with the impact of inflation and “other challenges in the sports and recreation division” contributed to the company’s financial troubles, the statement said.

He said: “It is with immeasurable regret that the Buckingham Board must announce that the rapidly escalating contract losses and a sharp reduction in cash together mean that the company is unable to continue its activities at the actual hour. We know this will come as a shock to all of our valued stakeholders. »

The spokesperson added that the council “will liaise with customers and interested parties to optimize any solution” as they seek to sell it.

“We emphasize that the company is currently not under administration. Our main objective at the moment is to seek to protect jobs and preserve as much activity as possible.

In its latest set of published accounts, for the year to 31 December 2021, it posted a pre-tax loss of £10.7m, accusing an ‘expected’ £14.2million hit from its redevelopment work on the Riverside stand at Fulham FC’s Craven Cottage stadium, due to the bankruptcy of a sub-contractor. The final loss was the subject of further negotiations with the west London club.

A Notice of Intention to Appoint Directors gives a company 10 days protection from creditor action.

Last month the company was hit by a liquidation order from factory company Granada Material Handling, although this was withdrawn after a week.

Buckingham, which employs around 660 people, said it was looking to sell all or part of the business.

At the end of July, Ian McSeveney stepped down as group chief executive, with the company citing long-term health reasons. He was replaced by Simon Walkley, who was promoted from his previous position as deputy group chief executive.

Buckingham have established a reputation as a stadium specialist in recent years, carrying out extensions for several top clubs and The new from Brentford FC ground. She has also worked on leisure centers and HS2.

As Building News has already reportedstadium jobs have a historic reputation for causing losses to contractors, including Multiplex after delivering Wembley Stadium and former companies such as Ballast and Laing Construction.

Shortly after Henry Construction Projects went bankrupt, news that Buckingham has ceased trading means more than £1billion in construction revenue has been lost in recent weeks.

Buckingham, 30th largest entrepreneur in the UK according to the CN100 2022became an employee-owned trust (EOT) in 2021. It is the largest contractor to have been sold to staff in recent years.

Shareholders who sell to an EOT pay no capital gains tax on the proceeds. Trusts hold shares in the name of employees and pay them tax-free bonuses on excess profits.

Chris Davies, managing director of DRS Bond Management, said: “In principle, EOTs and construction are not natural companions. I get why people do it, but unfortunately the whole idea of ​​EOTs is to extract money from a business from future profits. If the profits are not there, you cannot withdraw money.

Liverpool FC said they had yet to comment on the matter. Granada Material Handling has been approached for comment.

Source link: https://www.constructionnews.co.uk/financial/administrations/buckingham-group-halts-trading-after-search-for-saviour-fails-17-08-2023/

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