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RCG boom goes bust

Reinforced concrete specialist calls in administrator after being rocked by three problem contracts

NEARLY 130 jobs are at risk after the collapse of reinforced concrete specialist RCG.

The Burnley firm has been forced to call in Manchester-based DTE as administrator after a string of bad contracts.

RCG was concrete subcontractor on Bovis Lend Lease's Bridgewater Place contract in Leeds for Landmark Developments and St James'Securities.But following DTE's appointment, Bovis Lend Lease is now in discussions with PC Harrington to replace the ailing firm on the 32-storey scheme.

One industry source said: 'They have had a couple of bad contracts but Bridgewater Place was the final nail in the coffin.

'You have to question whether they were big enough to handle a subcontract of that size - around £10 million.There's a lot of difference between doing that and a £3 million job, you have to have systems in place.'

RCG also ran into problems on two further schemes - a Kajima project for the Health and Safety Executive in Bootle, Liverpool, and a hospital deal in Burnley where Bovis Lend Lease was also the main contractor.

The demise of the firm, set up in 1994 by directors Martin Rawstron and John Campbell, has been swift following relatively healthy financial results in the year to November 2003.

According to accounts posted at Companies House, RCG turned over £14.9 million, and made a pre-tax profit of £101,000, after recovering from losses in 2002.

A note accompanying the results said:

'The year has been satisfactory in terms of financial results. Future prospects are extremely good. Investment during 2003 has led to an order book of over £25 million with significant growth in turnover and profitability forecast for 2004.'

But creditors may yet gain something from the wreckage as the firm had net assets of nearly £500,000 on the books in November 2003.

DTE and Mr Rawstron were unavailable for comment.