Metnor Construction has fallen into administration after ceasing trading with the loss of all 80 jobs.
The Killingworth company had filed a notice of its intention to appoint administrators two weeks ago, after falling into financial difficulties. Now FRP Advisory has confirmed its appointment, with Steven Ross and Allan Kelly from the specialist business consultancy becoming joint administrators on Tuesday, following weeks of discussion.
Last year the company – which forms part of the wider Metnor Group – had hailed its recovery following the pandemic, but recent challenges put a huge strain on its finances. Metnor Construction, which won the Tyneside and Northumberland Company of the Year at the North East Business Awards in 2017, was founded in 2002 and was a principal contractor on private and public sector construction projects, including private residential schemes, healthcare, student accommodation, hotel and leisure, and commercial projects.
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It forms part of Metnor Group though administrators have only been appointed to Metnor Construction. The group’s head office is in Killingworth but it also has operations in Maidenhead, Great Yarmouth and Aberdeen.
The parent firm had hailed results for 2021, in which turnover was up from £48m to £63m and the previous year’s operating loss of £2.4m was converted to profit of £942,000.
But the administrators said the business suffered significant financial challenges in recent months following contract losses and the pressure on profit margins from rising input, labour and raw material prices and supply issues against fixed-price contracts.
Prior to the appointment, all 80 staff of the business were made redundant and the business ceased to trade. The administrators will now focus on winding down the business, realising assets and engaging with creditors.
Steve Ross, partner at FRP and joint administrator, said: “Rapid inflation is causing havoc on the profit margins of businesses across the economy. Metnor Construction was a long-established and major main North East building contractor that has delivered on significant projects across the UK but wasn’t immune to the impact of rising costs, which ultimately led to its insolvency.
“Regrettably, the business is unable to continue trading and sustain the workforce. We’re working with impacted staff to make applications to the Redundancy Payments Services and maximise recoveries from the assets.”
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