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Clark collapse could hit suppliers

Subcontractors working with stricken building firm Clark Construction fear the impact of the company going into administration.

Clark Construction, based in Immingham, Lincolnshire, filed for administration last week with the loss of 60 jobs. The company had a turnover of £16.9m in the 12 months to 31 March 2010, down from £28m in 2009.

Administrators John Russel and Christopher White from the P&A Partnership have yet to release any information to creditors, but some subcontractors claim to be owed hundreds of thousands of pounds.

CN understands a mechanical and electrical firm, a surfacing company, a groundworks specialist and a carpet supplier were among the companies owed substantial sums.

One source said: “It’s fair to say there are a lot of angry and disappointed subcontractors out there - it has hit a lot of local companies and other people further afield.”

Another said: “Clark was a big firm with 30 years’ experience but when it came to the tight times, all the money had gone. It could take serious people down with it.”

Clark had almost completed its biggest current job, the refurbishment of building B15 Donnington for the Defence Support Group, signed in May 2010. The building was reoccupied by the tenant at the start of January.

A spokesman for the Defence Support Group confirmed Clark had given warning of its financial difficulties, and was receiving fast-tracked payments within days of certificates being signed.

He said: “We were trying to do it a favour. We have kept back some of the payment for the work that has yet to be done.

“Clark has been paid for all the work that they and their subcontractors have done, so if Clark is not paying subcontractors that is an issue for them.

“We are in conversation with some of the subcontractors to finish off the work that is left. The money we have retained will go to those that finish the work.”

Clark is listed on a Ministry of Defence document as one of 95 organisations paid between £10m and £25m in 2008/09.
The company’s accounts for the year ended 31 March 2009 revealed it settled contract claims and legal actions worth £1,232,397, and carried forward a provision for £800,000 of possible payments in the following year.

Clark director David Coombe said: “Clark Construction has suffered from the downturn in the construction sector despite company restructuring.

“Potential contracts have been delayed or abandoned as potential clients have struggled to raise finance or have postponed projects. This has also been exacerbated by the December weather, which also meant that cash flow forecasts on ongoing contracts failed to be met.

“Coupled with a significant ongoing adjudication for outstanding sums of money on a completed project, these factors have all lead to cashflow difficulties for the company.”

The administrators declined to comment on the total sum owed.


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