Works being carried out by failed firm PC Harrington Contractors on two major projects in London have been transferred to its sister company, Construction News can reveal.
PC Harrington Group subsidiary Structural Systems has replaced PC Harrington Contractors on schemes being managed by Sir Robert McAlpine and Ballymore, after the concrete specialist fell into administration this month.
The transfer was confirmed by a spokeswoman for the contractor’s administrators, KPMG, which said it was aware of the handover.
She added: “The transfer should help deliver the completion of some outstanding contracted works and reduce the value of creditor claims in the administration.”
She also confirmed that any profit on these contracts will go to the company’s creditors.
The projects concerned are Sir Robert McAlpine’s Lillie Square scheme at Earls Court and Ballymore’s Royal Wharf project in east London.
PC Harrington Contractors appointed Howard Smith and Jonny Marston of KPMG’s restructuring practice on 5 May, following weeks of uncertainty at the firm.
The company said it had suffered from a “number of loss-making contracts”, which led it to cease trading shortly after the administrators were brought in.
According to its latest accounts, the company made a loss of £4.1m in the 2013/14 financial year, despite revenue rising to £64.7m from the previous year’s £61.1m.
The administrators are now trying to recoup value for the company’s assets, which are primarily contract debts, KPMG said in a statement.
PC Harrington Group has a number of specialist subsidiary companies, including post-tensioned concrete business Structural Systems, of which it owns 92.5 per cent of the share capital.
PC Harrington Group and its other subsidiaries are not in administration.
PC Harrington Contractors was also carrying out works for Mace on its £380m Nova scheme in central London at the time it entered administration but was instead replaced by J Coffey Construction and Kilnbridge Construction Services.
The firm became the latest in a string of companies to file for administration in recent months, with GB Building Solutions, Midlands firm Parkstone Group and Dundee-based Muirfield Contracts all going bust since the start of March.
McAlpine posts loss
Last week, Sir Robert McAlpine posted a massive £89.7m pre-tax loss for 2013/14, citing “weaknesses” that led to project delays and cost escalations.
The contractor said that while its accounts showed a loss for the year, this was largely due “one difficult project”, understood to be Fitzroy Place, a 95,000 sq m scheme in central London.
The complex project features a combination of renovated buildings and new developments, including high-end residential, commercial, retail and restaurant space.
The firm added that all losses had now been provided for in its 2014 accounts, with a review and restructure work already under way.
“Over the last 12 months the company has undertaken a thorough review of its governance procedures, has embarked upon a programme to increase efficiency across all aspects of the business, and has begun a significant upgrade of technology,” the group said in a statement to Construction News.
“It has also restructured its London division where, despite a very tough environment, it is delivering a number of high-profile and successful projects.”
The major contractor recently lost out to Mace on the first phase of the prestigious £3bn Chelsea Barracks scheme.
The two firms were battling it out to build the phase one of the luxury development, which will include 74 apartments across three blocks ranging in size from one to six bedrooms, plus a cafe on the corner of the first block.
Commenting on the firm’s outlook, one market source dismissed claims that the loss threatened the business and said it would “probably be adopting a more risk-averse position” in the future.