Vaughan Engineering Limited (VEL), part of a major mechanical and electrical services company, has called in administrators KPMG after posting a £2.4m loss in the year to 31 March 2017.
It had been contracted for a further £1.1m in work with Carillion for this quarter alone.
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Now KPMG has confirmed that it has been appointed as administrator for Vaughan Engineering Limited.
The firm, which has a base in Broxburn, West Lothian, and also operates from sites in Newcastle and Warrington, is a subsidiary of the wider Vaughan Engineering group based in Belfast.
The wider group continues to trade as normal under the control of its directors.
KPMG said that difficult market trading conditions, coupled with a number of disputed contracts and write-downs over the course of 2016/17 resulted in a £12m drop in turnover in the space of just a year.
While VEL generated turnover of £50m in the year to 31 March 2016 with the majority of revenue relating to contracts with a small number of blue chip contractors in Scotland and the north of England, it brought in just £38m in the year to 31 March 2017.
That pushed the business into a £2.4m loss over the same period.
Most of the company’s 154 staff, comprising 83 at its base in Broxburn, 43 in Newcastle and 28 in Warrington, have been made redundant.
A small number have been retained across the three offices in the short term to assist with contracts.
Blair Nimmo, joint administrator and global head of restructuring for KPMG, said: “Unfortunately, while VEL was a leading company in its field, the business was unable to continue trading in light of cash flow and recent events within the challenging construction sector.
“As a result of the difficult financial position facing the company, we had no choice but to make the vast majority of employees redundant.
“We will be working with all affected employees and relevant government agencies to ensure a full range of support is available.
“We will also be exploring the possibility of securing a sale of the company’s assets and contract novation’s and would encourage any interested parties to contact us as soon as possible.”
Vaughan Engineering said it would not be issuing any further comment.
