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Surrey-based firm Longcross calls in administrators

Longcross Construction has become the latest big name firm to go into administration.

Administrators from Deloitte were appointed to the Surrey-based firm, with work on sites suspended and up to 140 jobs put at risk.

Lee Manning, one of Deloitte’s joint administrators, commented: “The company had been quite focused on the grocery business, where cutbacks have been made on store expansions and refits.

“The directors concluded that the company was unable to continue to trade on this basis and resolved to place the company into administration.

“Work on site has been suspended while the joint administrators are considering the position.”

According to its 2013/14 financial results for the 12 months to 31 March 2014, Longcross posted a £1.2m loss on a turnover of £231.2m.

It is currently 51st on the CN100 contractor league table.

At the time, Longcross put the loss down to “one single project” in its construction division.

Credit rating agency Top Service told Construction News it had recently removed Longcross’s credit limit on the back of a number of negative reports from its clients.

Top Service managing director Matt Ricketts said: “Our customers have reporting problems over the last 12 months and they’ve been more frequent recently.

“Because of those problems, we took the decision to remove their credit limit.”

He added: “Up until recently, although late and having to be pushed, they were paying off their debts.

“But we were getting a lot of adverse reports so we removed [the limit] and said you’re better off not giving credit as you’d probably struggle to get your money back.”

A source close to Longcross told Construction News the firm’s focus on retail had contributed significantly to it falling into administration.

The source said: “The retail element was a big thing for Longcross and obviously the bottom has fallen out of the retail market… which has had an impact [on the company].”

In its 2013/14 accounts the company said it had been “fine-tuning” its business plan to take account of the changing marketplace.

It added that it had been developing opportunities outside of its “historic core workload” in the food retail sector, which accounted for just under 35 per cent of its turnover.

The company underwent an organisational restructure as a result, opening an office in central London and enlarging its West Midlands base, moving from Solihull to a new location near Birmingham Airport in an attempt to capitalise on the increased activity in these regions.

At the time of its results, Longcross also said it would continue to invest in its staff training and added that it had created two new direct appointments, promoting Nathan McNamara from accounting director to board director and hiring former Osborne commercial senior director Colin Gush as a board director and commercial director.

The 2013/14 pre-tax loss for Longcross compared with a pre-tax profit of £1.13m for 2012/13.

The group’s gross profit for 2013/14 was £16m, down from £16.9m the year before.

Readers' comments (5)

  • Sad news indeed. Seems the recovery of the Construction Sector is not as clear cut as it seems. Every month, companies associated with this sector are going under

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  • Very sad for the Sub Contractors and Suppliers that won't receive their money.
    Influx of management form Osborne's, thought they would have picked a more solvent company.

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  • I am a subcontractor that will more than likely be taken under by the disgusting and fateful management of Longcross.

    We have been unable to make contact with anyone senior at Longcross for four weeks despite making personal visits to their head office.

    No doubt the numerous remaining Longcross companies will survive unscaithed and the directors will still be driving home to their massive homes in prestige vehicles !

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  • Will we ever change the Insolvency laws in this country to protect subbies and suppliers who have done nothing wrong.
    No doubt this will cause hardship for the supply chain and staff, but you can bet those at the top will start to pop up all over place in high earning positions. No justice !

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  • As a sub contractor I have experienced this situation myself. All you can do going forward is to try and work for companies with a solid financial footing. There is still no guarantee you will get paid, but the risk is reduced. These main contractors with shaky financial situations should not be awarded any government contracts.

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