Family-owned Central Building Contractors has entered administration after the coronavirus lockdown exacerbated its already precarious position, resulting in 148 redundancies.
Administrators from KPMG were appointed to take control of the firm, founded in 1971 and based in Glasgow.
The business had closed all of its building sites on 23 March and furloughed all 159 employees on 1 April but was already grappling with challenging trading conditions and reduced margins, as well as delays to the start of several significant projects.
Accounts for the year to 30 September 2018 showed that the firm generated £35.9m in turnover, with a pre-tax loss of £166,410.
A total of 11 members of staff will stay on with the company to assist in the administration process. In a statement KPMG said: “Despite the directors taking various actions to address the position, these factors left the company with a significant funding shortfall. At the time of appointment, in accordance with the government’s guidelines all the projects had been closed for the previous five weeks.”
KPMG is now exploring whether or not some of the business and assets can be sold. It has three freehold properties, as well as several contracts underway and in its order book, along with construction equipment.
Blair Nimmo, joint administrator and KPMG’s UK head of restructuring, said: “Central Building Contractors (Glasgow) Limited has a rich history and is a well-known and highly regarded business in Scotland, but, despite the efforts of the directors, the business faced a range of cashflow challenges in recent times, which were amplified by the recent covid-19 lockdown”.
“We will be working to support the employees and have already initiated matters with relevant government agencies to ensure the full range of support is available to all those affected.”
“We would encourage any party who has an interest in acquiring any part of the business and assets to contact us as soon as possible.”
James McAlpine, director at Central Building Contractors (Glasgow), said: “Already difficult trading conditions have been greatly exacerbated by covid-19 which has made our financial position unsustainable. It is with significant regret that administration has been necessary. We have been very fortunate to have loyal and hard-working staff, a supportive supply chain and professional partners, many of whom have worked closely with the business for a great many years. We will work closely with the administrators to ensure every possible assistance is provided to all our employees during this exceptionally difficult time.”
