Manchester-based Ocon Construction has filed a notice of intent to appoint an administrator.
A statement from the firm read: “Ocon Construction is currently consulting with its employees following the filing of a notice of intent to appoint an administrator which is highly likely to progress into administration with trading not resuming.”
It follows a decision last week by the University of Liverpool to establish a construction company and take on staff previously employed by Ocon Construction on its £50 million Crown Place development.
Demolition started last year on the University of Liverpool’s former Veterinary Sciences building to make way for Ocon Construction’s £50m development of the Crown Place student accommodation scheme.
A statement by the university read: “The university has established a subsidiary construction company in order to take over responsibility for the delivery of its student residential development, Crown Place. As part of the arrangement agreed by Opal Property Group and the university, staff currently employed by Ocon will transfer to the new university subsidiary.
“The university is committed to providing world-class accommodation for its students and has considerable expertise in the delivery of major construction projects. This arrangement will enhance our in house capability and secure the expertise of a team who have been working on the project since last summer. The team successfully delivered the University’s Vine Court student accommodation which opened to students in September.”
Ocon Construction 2012 accounts:
The Ocon Construction accounts to 30 September showed a 22.9 per cent turnover reduction to £41.2m from £55m the year before.
It stated at the time that this “reflected a reduced tender conversion rate in a market that has shown no signs of recovery in 2012…”.
In the year to 30 September 2012, Ocon Construction made a pre-tax loss of £1.4m and spent 135k on redundancy.
Despite that they said the directors had taken steps to address these problems and they “looked forward to a return to profitability in 2013.”
On 1 October 2012, £5,1m was transferred to Opal Property Group Ltd, which increased the inter-company loan to £9m.
A source told CN: “Ocon is a very stong name in the North-west student accommodation sector. They had tried to diversify, but in student accommodation - although there is a lot of talk about people being willing to put money behind it, there doesn’t seem to be that many projects being built.
“People talk about retail being down and hotels finding it hard to get funding but although student accommodation does seem to get finance it’s not translated to student schemes on the go.”
Ocon Construction announced it had completed work on the £34 million Vine Court project for the University of Liverpool in November last year, the first scheme to be handed over in the University’s major student living investment programme.
Ocon Construction also announced a £9m refurbishment deal for student flats at Loughborough University last year.
The Manchester-based company was founded in 2004 and is part of the Opal Property Group.
Opal Property Group have been contacted for comment.