Clugston Group鈥檚 management team is doing all it can to save jobs and ease the impact on supply chain companies, third generation director David Clugston has said.
With administrators expected to be formally appointed today, efforts to retain staff on build projects to keep them on track is understood to be a core focus, with the potential for site employees to transfer to joint venture partners being explored.
David Clugston, who is due to take over the Scunthorpe-headquartered business from his father at the end of January, said: 鈥淲e are still working with KPMG, the administrator, to save jobs related to key construction contracts and protect creditors.
鈥淭he distribution business is unaffected by this and is continuing to trade.鈥
It was late afternoon when details of the shocking collapse started to materialise, with staff in the Construction division 鈥 which made up 拢157 million of the last recorded turnover - alerted.
Late filing accounts for 2018, and having parted company with a chief executive in the year, a second successive loss was anticipated, but having had 拢30 million in the bank and a 鈥渟trong order book,鈥 the scale of a downturn from a record turnover of 拢176 million 鈥 up 49 per cent on 2016鈥檚 拢118.2 million has been substantial.聽 Even that 拢176 million figure had been forecast to break 拢200 million half way through the year.
Bob Vickers had arrived from Carillion,where he was a director, in February 2017, leaving in June. Carillion was the high profile loss of 2018, with the quantity surveyor turned project director telling of a level of financial distress at his former employer after he joined.
In his only full year report for Clugston, he detailed how 鈥淐lugston Group has been in business for 81 years and has weathered many ups and downs in the various markets it operated in鈥 and that during the year, 2017, 鈥渢he board undertook a strategic review to ensure that the business continues to prosper in the years ahead鈥.
He even highlighted reducing the risk profile to 鈥渞ealise its vision of developing and maintaining a sustainable business for the benefit of its stakeholders鈥.
In August last year a restructuring programme was launched, with specialised Energy, Waste and Renewables division launched as it embarked on a 15th complex infrastructure project, with work ongoing on huge advanced incinerator builds with technical partners in Kent, North Wales and Avonmouth. One of the latest embarked upon had a single value of 拢89 million.
Then, Mr Vickers had underlined a strong financial position, stating: 鈥淲ith substantial growth in revenue, as well as accumulated cash balances of 拢30 million and no bank debt, we continue to invest for the future and look to further develop our business by investing in our teams across all our divisions.鈥
An interim chief executive in Glynn Thomas was appointed this summer, and with the handover announcement from John Clugston to David, it had appeared stable.
Instead, it appears the strategy has failed to materialise, with losses exacerbated, leading to the decision to call in recovery and insolvency specialists.
Planning and finance decision delays are the bane of the industry, and with Brexit bringing economic uncertainty, the pipeline may have ruptured.
Woes could also have been compounded by the near two months of rain bringing potential delays as construction turns to water dispersal, costing time and piling up delays.
