Mechanical and electrical engineering firm Norstead has followed Metnor Construction into administration with the loss of 52 more jobs.
The specialist provider of design, installation and mechanical and electrical services is part of Metnor Group, which includes its sister company that collapsed last week. Administrators said the firm, which suffered financial troubles including pressure on profit margins, had attempted to find a speedy merger or acquisition by another business in recent weeks but was faced with no offers.
All staff at Norstead's Newcastle and Maidenhead offices were made redundant prior to the appointment of Steven Ross and Allan Kelly of specialist business advisory firm FRP this week. The administrators are now winding up the company and selling its assets.
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Steven Ross, partner at FRP and joint administrator, said: “The directors launched an accelerated sale process, but without any viable offers, it was not possible to save the business, which has now ceased to trade. Regrettably, this also meant staff were made redundant prior to the administration. We’re now supporting impacted staff and preparing for an asset sale.”
Norstead had delivered a variety of projects for high profile clients across different sectors ranging from retail to pharmaceuticals. For example the firm had played a role in building Ikea's Greenwich store; the Royal College of Art's Dyson Building which includes on display mechanical and electrical engineering components for teaching purposes, and work on The British Museum. It has also worked extensively for the NHS and John Lewis.
The firm was established in 1971 and as recently as last year had hailed record growth amid new clients wins totalling £23m for 2022. The most recent accounts available for the business - to the end of 2021 - show turnover of £20.3m and operating profit of £50,000. In 2020 Norstead made an operating loss of £1.1m.
Administrators also from FRP said sister company Metnor Construction had suffered contract losses and the pressure on profit margins from rising input, labour and raw material prices and supply issues against fixed-price contracts. Accounts for the two firms' parent group include talk of a significant bounceback from Covid with turnover up from £48m to £63m and the previous year’s operating loss of £2.4m converted to profit of £942,000.
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