Lagan Construction Group has put four of its biggest companies into administration, putting around 200 jobs under threat.
In a statement released this morning the group confirmed Lagan Construction Group Holdings Limited, Lagan Construction Group Limited, Lagan Building Contractors Limited and Lagan Water Limited had entered administration.
Lagan Construction Group chairman Michael Lagan said the buildings and civils divisions had been hit by a number of factors, including delays to the start of some projects.
Mr Lagan added that the firm had been hit by protracted contractual disputes on some existing major projects and instability caused by one of its UK joint ventures.
The company, which employs a total of 800 people, said around 200 jobs may be affected by the announcement.
It hoped some staff could be transferred to its joint venture partners, while others might be relocated to other divisions in the group.
Mr Lagan said: “It is with great sadness and reluctance that we have had to take this course of action. We have had long-standing relationships with many subcontractors and suppliers. We hope that the process of administration will be smooth and that disruption to both projects and jobs will be minimal.
“The difficulties that have arisen within the Civils and Building divisions has meant that the directors of the four affected companies had no option but to immediately serve notice on the court to appoint an administrator.”
The company has said that the firm’s remaining 26 subsidiaries will continue to operate. These include Lagan Operations and Maintenance Limited, FK Lowry Piling Limited, Dew Piling, H&J Martin, Lagan Construction Aviation, Lagan Construction Limited, Lagan US inc, Lagan Plant Limited and Lagan Projects Investments Limited, Coastal Industrial and Lagan Construction Services.
Construction Employers Federation NI managing director John Armstrong said: “Given the huge contribution that Lagan Construction Group have made to Northern Ireland’s economy and society since their establishment, today’s announcement is extremely regrettable. They have been a pillar of our construction industry for decades and it is our express hope that a solution can be found.
“As the Federation has long said, the industry has faced a challenging period in respect of its sustainability. From issues related to low margins on works, to insufficient pipelines of activity, to the current political and budgetary challenges within Northern Ireland, there are significant tests which go much beyond today’s news.
”These must be matters of concern to anyone who wishes to see a healthy and vibrant Northern Irish construction industry given its critical role in delivering jobs, economic development and growth.”
In Lagan Construction Group Holdings’ last accounts for the year ending 31 March 2016, the company published pre-tax profits of £7.6m on turnover of £225.6m. The firm’s accounts for this year are nearly two months overdue, with the company’s accounts expected to published by 31 December 2017.
Lagan’s building and civils divisions were involved in a number of major projects across the Great Britain and Northern Ireland for clients including Highways England, Transport Scotland and Ulster University.