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Wed May 18 2022

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Inflation brings down 125-year-old building firm

4 Nov 21 Forty-six staff at a fourth-generation family building firm in Derbyshire have been let go by the company’s administrators.

Howard Smith and Chris Pole from Interpath Advisory were appointed joint administrators to Wildgoose Construction Limited yesterday.

Founded in Matlock, Derbyshire in 1896 and now based in Alfreton, the fourth-generation family-owned building contractor works across housing, education, health, commercial and social care.

Recent projects included Northampton Museum & Art Gallery, Brackley Medical Centre and the Matlock Spa Development.

The company was already having its struggles. In the year to 30th September 2020 Wildgoose Construction made a pre-tax loss of £2.0m on turnover of £52.2m. The year before it lost £1.8m before tax. The costs started escalating.

According to the administrators, the company had recently experienced “significant margin pressure” as a result of rising raw material prices, supply chain disruption and labour shortages, which resulted in many of its fixed-price contracts becoming loss-making.

The adverse impact of these loss-making contracts was exacerbated by significant one-off costs, including the insolvency of some of its subcontractors and bad debts arising following the insolvency of a key client.

The adjudicator said Wildgoose was owed £486,000 by the client, at which point the client opted to put itself into insolvency and out of reach.

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Following a detailed review of the financial position of the company and its trading projections, the directors decided to place the company into administration.

All work on live projects stopped before the appointment of administrators, with clients being notified in advance to enable an orderly wind down and to give them appropriate notice to source alternative contractors.

While 46 members of staff have been made redundant, a small number has been retained in the short term to assist the joint administrators with the wind-down of the business.

Howard Smith, managing director at Interpath Advisory and joint administrator, said: “These are extremely difficult times for companies across the construction sector, with recent surges in the price of raw materials, coupled with supply chain disruption, acute labour shortages and wage inflation putting businesses under significant pressure. Unfortunately for Wildgoose Construction, these issues ultimately resulted in a number of its fixed-cost contracts becoming unsustainably loss-making, and when combined with the other unexpected significant one-off costs and liabilities which had arisen, the directors had no alternatives other than to place the company into administration.

“Our immediate priority is to assist those members of staff who have been made redundant, providing them with the information and support they need to claim their statutory entitlements from the Redundancy Payments Office.”

Jonathan Wildgoose, chairman of Wildgoose Construction, said: “In light of the multiple challenges being faced by the business, our efforts since the commencement of the pandemic have focused on exploring all possible options in an effort to secure a solution which would have safeguarded the future viability of the business. It is with great sadness that we had no alternative but to cease to trade and take the necessary steps to place the company into administration. On behalf of all of the directors, I would like to place on record our thanks for the huge efforts of our employee base and all other stakeholders.”

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