Blair Nimmo and Geoffrey Jacobs of KPMG have been appointed as joint administrators to Central Building Contractors after it collapsed earlier this week.
Established in 1971, the company is a privately owned, family run Scottish construction company, providing a range of construction design, development and maintenance services throughout Scotland. Headquartered in Glasgow, it employed 159 people.
In recent years, the company has suffered from “challenging” trading conditions in the construction sector and encountered reduced margins, contract disputes and delays in the commencement of a number of significant projects.
Despite the directors taking “various actions” to address the position, the company was left with a “significant funding shortfall”.
As a result KPMG said that,as with most insolvencies within the construction sector, it is not possible for the company to trade in Administration, even should the lock-down be removed in early course.
This meant the joint administrators were required to make 148 employees redundant immediately following the appointment, with 11 members of staff being retained to assist with the administration process.
The joint administrators added they are “rapidly exploring” whether an early sale of some of the business and assets can be secured. The company’s assets include three freehold properties, numerous contracts, order book, work in progress and 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.”
He added: “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, 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.”