Blair Nimmo and Geoffrey Jacobs of KPMG were appointed as joint administrators of the company yesterday (29th April).
The privately owned, family-run construction company – owned by Sir Jack Harvie – was established in 1971. It provided provide a range of design, development and maintenance services throughout Scotland. It employed 159 people and turned over £36m in 2018.
The administrators said that, as with most insolvencies within the construction sector, it is not possible for the company to trade in administration, even should the lock-down be removed soon. As such, 148 employees were made redundant immediately following KPMG’s appointment, with just 11 members of staff retained to assist with the administration process.
KPMG said that Central Building Contractors (CBC) had suffered in recent years from challenging trading conditions in the construction sector and has 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. At the time of the appointment of the administrators, all projects had been closed for the previous five weeks, in accordance with the government’s guidelines.
The joint administrators are exploring whether some of the business and assets can be sold. The assets include three freehold properties, numerous contracts, order book, work in progress and construction equipment.
Blair Nimmo, joint administrator and KPMG’s UK head of restructuring, said: “Central Building Contractors (Glasgow) Limited 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 cashflow 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.”
CBC director James McAlpine said: “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.”