From huge multi-million pound operations to small limited companies the construction sector has been battered by inflation and Covid
Building firm Pollard was constructing the eight-storey Teesra House in Plymouth for Mount Wise (Devon) Ltd (Image: Matt Gilley)
More than a dozen Plymouth construction firms have gone bust in the past two years as the sector is battered by inflation and repayment of Covid loans. PlymouthLive has reported on a string of building sector businesses that have gone under – and it is likely more will follow.
The list, included below, shows firms going belly up range from huge multi-million pound firms down to small limited companies. In at least one case a larger firm’s failure was a factor in a smaller supplier going to the wall.
The latest Government insolvency statistics for Q3 2022 show a significant increase in the volume of companies in distress. And the industry that experienced the highest number of insolvencies in the 12 months ending Q3 2022 was construction. There were 3,949 insolvencies nationally.
Leading restructuring and insolvency professional Oliver Collinge, from PKF GM, said: “The large rise in corporate insolvency numbers is not surprising nor the industry sectors most impacted, given the cost of living crisis. Many distressed businesses managed to keep afloat through Covid by using the high level of government support available.
“Many businesses are still repaying Bounce Back Loans (BBL) or CBILS (Coronavirus Business Interruption Loan Scheme) loans and HMRC liabilities deferred during the pandemic; rising input costs are adding to these cash flow pressures.”
In late October, it was revealed that more than 1,200 Plymouth companies are in financial trouble. The Red Flag Alert report showed construction firms are struggling the most with businesses in this sector making up 18% of all firms in significant distress.
With PlymouthLive aware of several construction firms that are facing winding-up orders or are at the start of the liquidation process, more are likely to fail. But here is the list of casualties since early 2021.
Southern Trowels
Michael Dennis Ltd, which traded as bricklaying specialist Southern Trowels, went into liquidation in November 2022. The business had its offices at Marsh Mills, but also traded from an address in Tavistock.
Incorporated in 2006, it worked on projects across the South West, including a £750,000 project to build a store extension and boundary wall at the Lidl supermarket in Plymstock. A statement of affairs filed at Companies House showed it collapsed with no realisable assets and debts of £40,675. The majority of this is an unpaid BBL, owed to Barclays Bank, of £29,000. The taxman is also owed £3,000.
PCB Group
The electrical business went bust with debts of more than £500,000 after being owed a significant sum when a larger city construction firm went under. Plymstock-based PCB Electrical Services Ltd, which traded as PCB Group, was owed more than £100,000 when Henry W Pollard and Sons Ltd (see below) went to the wall in 2021 with debts of more than £15m and leaving dozens of smaller companies out of pocket.
The company, incorporated in 2006 and stating its business as “electrical installation”, has received creditor claims amounting to more than £544,000. But documents filed at Companies House reveal liquidators are expecting to collect assets of £351,885.
This includes £130,127 of cash in the bank and £198,201 which can be clawed back from debtors, although £324,685 is actually owed to the company. But despite this, it is estimated that creditors will be short of a total of £218,270.
Kelly Property Services (Plymouth) Ltd
This firm went bust leaving a £64,000 County Court judgement unpaid among claims totalling more than £144,000. The Tamerton Foliot-based company is now in liquidation and also owes £65,853 to Barclays Bank.
The company was ordered to pay £60,736, plus interest and £3,000 in costs, to a claimant by the County Court Money Claims Centre. It is understood this judgement in default relates to building work carried out on a house in Plymouth.
The business held meetings with creditors in September and October 2022 and appointed liquidators in October, passing a resolution to voluntarily wind up the company. Documents filed at Companies House showed it had just £6,000 in the bank but faced claims of £144,614.
Terry Jewell Plastering and Building Contractors Ltd
In October 2022, the Efford-based company filed documents revealing it had not a penny to its name. Documents filed at Companies House reveal it owed more than £100,000 which is unlikely to be paid.
Of that sum, £28,090 is owed to the taxman and Barclays Bank Plc is claiming £44,887. Only incorporated in March 2021, its LinkedIn page said Terry Jewell Plastering and Building Contractors had been operating since March 2003
A&P Property Developers Ltd
In August A&P Property Developers Ltd, registered in London but which traded from an address in Plympton, went into liquidation with no assets and debts of more than £20,000. The vast majority of that, £19,269, was owed to Plymouth City Council’s Strategic Planning and Infrastructure department.
Karl Thomas Flooring Ltd
In August 2022, Crownhill-based Karl Thomas Flooring Ltd went into liquidation with debts of £64,857 which are unlikely to be paid. The independent floor and wall covering company, which worked across the whole UK from its Plymouth base, was wound up voluntarily and had just £200 in its bank account.
But the firm owed the taxman more than £6,000 in unpaid VAT and more than £9,000 in Corporation Tax. It also owed its bank, Santander UK Plc, £42,488. Liquidators said there is likely to be a deficiency of £64,857 for creditors.
Urbn Construction Ltd
In September, it was revealed that Plymouth’s Urbn Construction Ltd went into liquidation with “insufficient funds” to pay debts of £3.5m. The business, which was based in Burrington Way, went into liquidation in May 2021, but now liquidators have completed their investigations and revealed the full shortfall to creditors.
Documents filed at Companies House revealed about 200 claims were made for cash, most of them from other firms in the construction industry.
Liquidators managed to reclaim £62,958 but it turned out to be “uneconomical” to pursue more than £2.5m owed to Urbn Construction in unpaid goods and unfinished business.
Highgrove Property Services Ltd
Highgrove Property Services Ltd, which operated from North Hill, went into liquidation in August 2022 owing money to its bank, the taxman and several small city construction firms. Its total debts were £1.3m which are unlikely to be paid.
The company, which traded as Highgrove Properties, left HMRC short of £24,090 owed, plus another £10,427 in unpaid Corporation Tax.
Neal Stoneman Scaffolding Ltd
Neal Stoneman Scaffolding Ltd went under owing almost £1.5m which is unlikely to be paid. Neal Stoneman Scaffolding Ltd has been involved with some of Plymouth’s most prominent construction projects including the redevelopment of the former Derrys building and at Mayflower House, in the city centre.
But it went into liquidation leaving debts, including a large Covid loan, outstanding. Documents filed at Companies House reveal there were just £33,503 in assets which means there will be an estimated loss for creditors of £1,453,341.
Complete Building Developments Ltd
Complete Building Developments Ltd also entered liquidation in July with £200,000 in debts and without enough cash to pay employees, its own director or a £44,000 BBL. A report by insolvency practitioners showed the Mount Gould business went bust with just £553 in assets.
The report revealed £9,446 is owed to trade creditors, including £5,446 to William Lean commercial property and development consultants based at Mount Wise House, in Plymouth. Nearly £18,000 is owed to employees.
Eliot Design and Build Ltd
Eliot Design & Build Ltd, based at Stoke Damerel Business Centre, went into liquidation in late 2020 but the scale of its debts were only revealed this year – and totalled nearly £4m. The company had been involved in several high-profile house building projects, for the affordable and open markets, around the South West, including in Plymouth, Exeter and Truro.
But it went out of business in November 2020 leaving 14 staff facing redundancy and needing support from the Government’s redundancy payment service. A report on the conduct of its directors has since been sent to the Government.
Midas Group
More than £53m in debts are unlikely to be paid following the collapse of South West construction giant Midas. Administrators sorting through hundreds of claims said there won’t be enough cash to settle the vast bulk of them.
The majority of claims are from unsecured creditors and, while some cash is being clawed back by the administrators, it is unlikely that those claimants will receive a penny. The taxman is also expected to be short of more than £5m in unpaid taxes.
Exeter-headquartered Midas Group Ltd and its subsidiaries Midas Construction Ltd, Midas Retail Ltd, Mi-Space (UK) Ltd, Mi-Space Property Services Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd all fell into administration in February 2022. They blamed a toxic cocktail of Covid, inflation, money owed to them but not paid, and cash-flow problems for causing a financial doomsday.
Henry W Pollard and Sons Ltd
In September 2022 it was revealed investigations had begun after Henry W Pollard and Sons Ltd went bust leaving hardly any cash to pay £15m in debts and a huge black hole in its pension fund. Liquidators sorting out the affairs of the Bridgwater and Plymouth company, which had been in business for 161 years before it went belly up in 2021, sent a confidential report on the directors’ behaviour to the Government and are probing “alleged pension-related misrepresentations in the company’s financial statements.”
Building firm Pollard was constructing the eight-storey Teesra House in Plymouth for Mount Wise (Devon) Ltd (Image: Matt Gilley)
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