Central Building Contractors has fallen into administration, as 148 employees face immediate redundancy
Blair Nimmo and Geoffrey Jacobs of KPMG LLP have been appointed as joint administrators of Central Building Contractors.
Central Building Contractors employed 159 people, so far 148 of those have been made redundant.
The contractor battled challenging trading conditions and had 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, these factors left the company with a significant funding shortfall.
Coronavirus impact
All of the active construction projects had been closed for the previous five weeks. As with most insolvencies within the construction sector, it is not possible for the Central Building Contractors to trade in administration, even if the lockdown be removed in early course.
Following consideration of all available options, the joint administrators required to make 148 employees redundant immediately, with 11 members of staff being retained to assist with the administration process.
Worsening cashflow
Blair Nimmo, joint administrator and KPMG’s UK head of restructuring, said: “Central Building Contractors 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 cash flow 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, commented: “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.”
