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Essex M&E contractor HPEMS collapses due to 'non-payment from main contractors'

Exclusive: Essex-based M&E contractor HPEMS has collapsed due to non-payment of invoices by main contractors, according to the administrators.

Begbies Traynor was appointed as administrator of HPEMS on 18 September and said the appointment was made “as a result of non-payment from the main contractors for substantial sums, which the joint administrators are now pursuing”. 

The firm said it cannot give information about the main contractors it is pursuing at this stage.

Joint administrators Jamie Taylor and Dominik Czerwinke added that 14 claims are being processed from HPEMS employees for money owed to them, with all 14 jobs at the firm made redundant.

They also confirmed Begbies Traynor is not seeking a buyer for the company, which was founded in 1978 and has two offices in Dunmow, Essex, and Castle Donington, near Nottingham.

HPEMS was delivering a £4m job for Willmott Dixon for the M&E installation of 150 new-build apartments at Brentford Lock when it went under last month.

Willmott Dixon has since taken on independent M&E specialist Paul Phillips and contracted Athena Electrical to complete the job. It is believed that the collapse of HPEMS had set the project back by a month.

A Willmott Dixon spokesman confirmed that it pays all of its suppliers within 42 days.

It comes as Stepnell chief executive Mark Wakeford warned that main contractors who have delayed paying their suppliers during the downturn could face “payback” from subcontractors.

Mr Wakeford said: “The industry’s capacity is only two-thirds of what it was five years ago. Those still standing are in demand and in a stronger position to set their own payment terms and choose who they want to work with.”

HPEMS specialised in providing services for housing associations in the East and South-east of England, including mechanical and electrical installation, kitchen and bathroom refurbishments and maintenance.

In May 2013, HPEMS founder Tony Murphy became chairman of the business and former Emcor and Axima Suez director Brian Woodcraft joined the firm as managing director.

Data from credit rating agency Experian this week revealed the number of building and construction firms going into insolvency fell from 293 in August 2012 to 210 in August 2013.

Speaking to Construction News in July, Electrical Contractors’ Association group chief executive Steve Bratt warned that late payments were seriously threatening growth in the construction industry and forcing many subcontractors out of business, especially in the M&E sector.

“At worst, late payment can destroy a business, and at best it can severely hamper it,” he said.

Readers' comments (2)

  • Willmott Dixon didn't confirm how much it paid them though!

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  • StreetwiseSubbie

    We Need To Stamp Out Payment Abuse!

    12 Months we ran a survey which had a fantastic response and the results could not be ignored!

    Now we need Specialist Contractors to have your say again...

    The Inquiries, the debate in Parliament, inclusion in the Construction Strategy and all the talk in the press and elsewhere about poor payment practices would not have happened without the media interest in the culture of late payment in this country.

    And no-one would be interested in the problems that you guys face without the shocking evidence of bad practice that you provided via our previous surveys.

    But to keep up the pressure for change and to eradicate payment abuse we need you to tell us how things are now, and whether they are better or worse than 12 months ago.

    We always publish how many respondents we get, so we really need your help to get as many responses as possible, and make this another creditable and authoritative survey of Specialist Sub-Contractors.

    A link to the survey can be found on the StreetwiseSubbie web site.

    So even if you did it last time please complete this new survey, because the more replies we get the more we can get people to sit up and take notice, so that we can take some real positive steps to address the problems you guys are all facing!

    Please take 3 minutes now (it's that quick) to tick the box against 10 questions!

    The more replies we get the more we can get people to sit up and take notice about the sharp practice and poor payment culture that is ruining this great industry of ours!

    Thank you in anticipation of your support.

    Unsuitable or offensive? Report this comment

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