Cladding and facade specialist Speedclad has collapsed into administration after a major contract becoming loss-making.
Administrators from Interpath said the Northallerton-based firm had faced difficult period in which a number of postponed or abandoned contracts, material and labour shortages and rising prices had weighed on its progress. Despite efforts to save the company 44 staff have been redundant, with a small number kept on to assist with the administration.
Interpath said it was exploring a number of options including seeking a buyer for the business, its assets and intellectual property. The latest accounts for £18m-turnover Speedclad, which had recently done work on Birmingham Symphony Hall and a 13-storey hotel in Milton Keynes, show operating profits fell considerably from £958,144 in 2020 to £98,931 last year.
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James Lumb, managing director at Interpath and joint administrator, said: "The administration of Speedclad is symptomatic of the growing challenges facing the construction sector, particularly cladding and facades businesses. Speedclad is historically profitable and has delivered notable projects such as the facades at the Wellington Place office development in Leeds.
"The company is a well-respected business with strong goodwill in the market from customers, suppliers and other stakeholders. Whilst we are hopeful of finding a solution for Speedclad, its administration suggests that other strong businesses could be facing similar challenges."
Writing in a section about challenges in the accounts for the year ended January 31, 2021, Speedclad director Anthony Blake said: "The post-Grenfell industry has presented its own challenges, one being a significant increase in professional indemnity (PI) Insurance costs with effectively less cover. However, Speedclad believes all PI insurance holders are still exposed to this issue.
"After the collapse of the Carillion and Interserve Groups, the company is experiencing an unprecedented lack of confidence by the credit insurance market in the traditional largo construction companies. The company policy to have credit insurance over on all clients has had a direct impact on the company and its ability lo secure works covered by such insurance. On a number of occasions, the company has secured advance payments o remove risk."
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