One of Wales’ oldest construction and property development firms, Jehu, is set to collapse into administration . It has blamed the move on inflationary pressures decimating its cash reserves.
The Bridgend-based firm, which operates across South Wales and the south-west of England, has made 104 employees redundant with immediate effect.
Jehu Group, Jehu Project Services and Waterstone Homes have ceased trading. Insolvency firm Begbies Traynor is handling the administration process. Delivering construction and development projects for housing associations and local authorities in Wales and the south-west of England, Jehu Project Services had 15 live contracts with a remaining total value in excess of £100m.
Family-run-and-owned Jehu said it has been hindered by fixed-price contracts it had struck before the pandemic with profit margins being wiped out by construction cost inflation spiralling by more than 25%.
Jehu Group directors Marc and Simon Jehu, said: “This is a truly devastating day for the business started by our grandfather over 85 years ago. Every possible option to keep the business alive has been completely exhausted and it with desolate hearts that we find ourselves with no choice but to cease trading. We did everything possible to avoid closure, but we were fighting a battle that simply couldn’t be won due to the successive economic shocks of the past couple of years.
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“Our thoughts are first and foremost with our devoted colleagues who have lost their jobs, many of whom have given more than 25 years of service. We would like to thank the loyal and steadfast clients and supply chain who supported us, often carrying the added burden of those who sought to capitalise on our difficulties.
“We understand this is a worrying time for our colleagues, supply chain partners and customers. We are working with Begbies Traynor to get the best outcome from an impossibly difficult situation.”
Huw Powell, managing partner at Begbies Traynor in South Wales, said: "This situation underlines the crushing impact of the current inflationary environment on an established and successful business. Pre-pandemic, the group was highly profitable and by 2019 had almost £7m in net assets.
"It continued to win high profile projects and was an award-winning business. However, delays in completing projects caused by the pandemic and subsequent cost increases caused a severe cash-flow crisis that it could not recover from, despite support from key stakeholders.
“It is hugely disappointing to see the group cease trading in these circumstances and highly regrettable that efforts to secure its future were unsuccessful, where the current political and economic turmoil counted against them. We are aware of the negative impact that this will have on the supply chain and hope that sub-contractors will be able to work with the group’s customers to find the best possible solutions to complete existing projects.
“From our interactions with staff whilst we have provided advice to the group, it is clear that they remained loyal to and were proud to work for the business. Employees are of course devastated by the news, and I sincerely hope that their track record of delivering successful projects will stand them in good stead to gain new employment quickly.”
The creditor position is expected to run into millions of pounds. As with other contractor administrations the local authorities and housing associations will look to appoint new firms to complete outstanding projects. Jehu recently secured a new £5m lending facility from the Development Bank of Wales, which was secured against assets.
In 2020 the development bank also supported a multi-million-pound new funding line into the business, alongside Bibby Financial Services and Santander, to support its growth plans.
The business has been run by the Jehu family for four generations after being established in 1935. Its residential development arm through, Waterstone Homes is currently delivering more than 1,000 homes.
Construction projects include over £20m worth of independent living contracts with Cardiff City Council over two sites in Llanedeyrn and St Mellons as well as a 53 unit scheme for the Vale of Glamorgan Council. It also working with longstanding partner in housing association Linc Cymru to develop 48 apartments supported by funding from the Welsh Government.
Other construction clients include Greggs, Tesco Express, Costa Coffee and Premier Inn.
Earlier this year it took the construction company of the year award in the Insider Wales Property Awards.
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