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Top 5 news stories of 2015

  1. GB Group chairman: “We’ll do everything possible to save group”
  2. Jim’ll Mix It boss: Why I’m scrapping company name
  3. London subbie goes bust on Mace’s Broadgate scheme
  4. Aecom launches UK construction arm to challenge contractors
  5. Longcross goes into administration

CN’s top 5 most-read new stories in 2015 include three company administrations, one firm’s big move into UK contracting, and a material supplier’s controversial name change.

 

GB Building Solutions site corner of Atlas Road and Old Oak Road Acton London 8

GB Building Solutions site corner of Atlas Road and Old Oak Road Acton London 8

GB Group chairman: ’We’ll do everything possible to save group’

The demise of GB Building Solutions was Construction News’ biggest story in 2015 by a comfortable margin – not surprising, considering the firm was the biggest casualty of the year and entered administration owing £82.8m to creditors.

More specifically, the firm owed £76.7m to non-preferential creditors, including £30.3m to trade creditors – generally subcontractors who didn’t see a penny.

All 384 of GB Building Solutions’ staff were made redundant at the time of or shortly after the administration, with the firm’s parent company GB Group Holdings owing just under £39m when it also went bust.

The main reason for the company’s collapse appeared to be “issues with a number of legacy contracts” that put a strain on cashflow, coupled with disputes over completed contracts and delayed payments, according to an administrator’s report.

This theme of problem legacy contracts would resurface time and again over the course of the year, affecting contractors big and small. For the bigger firms, it meant a hit to their profits – but for the smaller companies like GB, the consequences were much more serious than that.

Mixing truck operated by cement supplier Jim'll Mix It

Mixing truck operated by cement supplier Jim’ll Mix It

Jim’ll Mix It boss: Why I’m scrapping company name

Back in 2012, the managing director of London concrete supplier Jim’ll Mix It told Construction News that he had wouldn’t change his company’s name in the light of the investigation into alleged cases of sexual abuse by Jimmy Savile.

MD Jimmy Taylor said: “What is Jimmy Savile to do with me? I am who I am. I’m in concrete, my name’s Jim.”

This year, however, Mr Taylor performed a u-turn, deciding to scrap the company name after multiple examples of “abuse from members of the public”, who were “verbally attacking” drivers.

He added that he was “pissed off” about the furore over the company name, repeating his phrase from 2012: “I am who I am. I’m not a paedophile. Why should I be associated with a bloke with white hair and dodgy eyes?

“I might have the dodgy eyes but I don’t have any hair anymore.”

Broadgate under construction (c) Make

Broadgate under construction (c) Make

London subbie goes bust on Mace’s Broadgate scheme

Construction News revealed in February that London-based mechanical subcontractor SF Installations went into liquidation in November 2014 after a pay dispute on Mace’s £340m 5 Broadgate scheme.

The firm was working for Mace MEP on the British Land project in London, a new 700,000 sq ft HQ for investment bank UBS.

Administrators said that variations and a contractual acceleration programme by Mace caused SF’s costs to rise by £2.5m to £7m – with a net amount of “in the region of £1.3m” still due from Mace to SF at the time of liquidation, according the administrators’ report.

The administrators added that Mace “issued a zero valuation with no supporting justification” and added “£280,000 of contra charges” at the end of October 2014 – which a Mace spokesman denied.

Work on the 5 Broadgate scheme was initially expected to complete in November 2014, with Mace’s acceleration programme aiming to make up the delay where possible.

SF Installations’ liquidation resulted in the loss of 25 directly employed and 60 subcontracted jobs.

It subsequently emerged in June that Mace was facing a fresh supplier dispute on the 5 Broadgate project – this time a legal claim for more than £800,000 from bespoke plant room manufacturer Ellison AC.

CREDIT Peter Zoon_1095 Avenue of the Americas New York Tishman Aecom

CREDIT Peter Zoon_1095 Avenue of the Americas New York Tishman Aecom

Source: Peter Zoon

Aecom launches UK construction arm to challenge contractors

Construction News revealed in September that global consulting giant Aecom had launched a standalone UK construction arm – a story that reverberated across the industry.

Aecom said the move was part of a strategy to take on the UK’s biggest contractors on commercial and residential projects, and that it had already secured five construction schemes and £50m in revenue.

Former Bovis Lend Lease operations and preconstruction director John Hilton has been recruited to lead the new company and said the sky was the limit for the firm, with ambitions to double turnover every year.

But as one director at an established UK contractor told us soon after the news broke: “Being a really good consultant doesn’t mean you can be a really good contractor.”

The move shows that Aecom believes there is money to be made in the commercial and residential sectors at the moment – and that it feels it can leverage its relationships with international clients to profitable effect, as we continue to see more foreign investment from Asia pour into the UK.

Watch this space to see how Aecom progresses in 2016.

Longcross Construction Croydon PRS Canterbury House

Longcross Construction Croydon PRS Canterbury House

Longcross goes into administration

Rounding out our most-read stories of the year is the news of another high-profile administration: Surrey-based contractor Longcross Construction.

In its most recent results before entering administration, the firm posted a £1.2m loss on a turnover of £231.2m and sat 51st on the CN100 contractor league table.

Longcross’ demise was emblematic of the decline in the retail construction sector – the firm had a particular focus on the grocery business, which had seen cutbacks on planned store expansions and refits.

A source close to the company told us: “The retail element was a big thing for Longcross and obviously the bottom has fallen out of the retail market… which has had an impact [on the company].”

The retail construction sector is still smaller than it was, with the big supermarkets cutting back their new-build ambitions in 2015. But the budget retailers like Lidl and Aldi have arrived on UK shores in a big way, helping to fill the gap left by the larger players.

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