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Readie Construction Goes Into Administration

Readie Construction which had a turnover of £421m has gone into administration with Begbies Traynor.The administrators put out the following statement “Unfortunately, the Company will cease to trade immediately and the Joint Administrators will begin to wind down its operations with immediate effect. Creditors of the Company are asked to contact Begbies Traynor on readie@btguk.com to register a claim.  “Having just been appointed, we are assessing the situation and further updates will be made as and when it is appropriate.” We believe Readie is too risky to continue trading in administration and therefore the newly appointed administrators have closed the business down.It is highly likely that all employees will leave the business immediately. Also we should add that at least £40m of suppliers and subcontractors bills will go unpaid, hammering many smaller companies in the South East.If you are impacted by this and need a plan to recover, speak to the rescue experts at KSA Group.  Call on the number on the site or email us help@ksagroup.co.uk

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Readie Construction Goes Into Administration

Safestyle UK Goes Into Administration

LATEST:Following this mornings announcement, it has been shared that the business has gone into administration. Rick Harrison and Will Wright from Interpath Advisory were appointed joint administrators to H.P.A.S Limited, trading as Safestyle UK, Style Group Holdings Ltd and Style Group UK Ltd on 30 October 2023.Redundancies have been made for 680 of its 750 strong workforce. If you are an employee and have been made redundant or are concerned about what this means for you, please check out our guide.For customers, if you have outstanding orders then they are not going to be fulfilled - unless a buyer is found and the orders are included in the deal.A Bradford based double glazing windows firm has announced its intention to appoint administrators. Safestyle UK announced that it would appoint administrators after weeks of uncertainty at the company. They acknowledged that they haven't been successful in finding a buyer for the company or fresh financiers to provide funding.The company's share price has been falling due to unfavourable trading updates during the autumn, and at the beginning of the month, they announced that they were seeking new investors to provide more funding for the company.They published the following statement on Friday night:Safestyle UK plc (AIM: SFE.) announces that following its announcement of 26 October 2023 (the “26 October Announcement”), the interested parties that were, at that time, involved in the Proposed Sale process as defined in that announcement, have withdrawn their respective interests.Therefore, the Board of the main trading subsidiary of the Group, H.P.A.S. Limited (“HPAS”) and other intermediate holding companies in the Group, namely Style Group Holdings Limited and Style Group UK Limited, has concluded that they are no longer able to continue trading as a going concern.Consequently, the Board has filed notice of intention to appoint administrators to HPAS, Style Group Holdings Limited and Style Group UK Limited in Court today.Unless financial circumstances change, and in accordance with statutory requirements, the board of these three companies intends to appoint administrators within 10 business days.Further announcements will be made as and when appropriate.You can read the original statement here:Additionally, a text message reportedly from the CEO confirms to employees that the business will be put into administration and that there will be a Teams call on Monday at 2:00 PM, at which additional details will probably be disclosed. The way that the intention to appoint administrators was communicated to the personnel has already drawn criticism.A analysis on how the biggest window and door installer dropped from a £250 million valuation to nothing in just six years will one day be conducted. However, employees' top concern right now is whether they will get paid for the work they have completed. Homeowners will be worried about paid deposits, unfinished repairs, and work that needs to be done. Suppliers will be concerned about what will happen to their current inventory and if they will be reimbursed.

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Safestyle UK Goes Into Administration

More than 100 building firms predicted to go bust each week in 2023, according to new research

in Construction News

New research from Red Flag Alert suggests that the construction sector is going to face some trouble this year, with financial experts predicting more than 100 building firms to go bust every week.This is no shock, with construction having faced difficulty before, and as The Insolvency Service reported before Christmas, businesses within the construction sector are going bust at the fastest rate in a decade.According to Red Flag Alert’s research, there is around £300m in bad debt within the UK construction industry, as we enter 2023. This could rise to £1bn by the start of 2024. Ultimately, firms who usually keep their heads above water though the current recession, are being dragged under by the bad debt of those whom fail.Why are there so many unpaid bills? Well, with much pressure from staff and supply chain issues for the sector, what do you expect? Mixed with Covid and all the implications left, along with inflation and rising interest rates. Things do not look good.Chief Economist of Red Flag Alert, Dr Nicola Headlam remarked:‘’ This is not good news for the industry and UK as a whole. This will lead to a much smaller pool of construction companies available for contracts and for suppliers to do business with. The post-recession economic bounce back will be hampered by a lack of building companies available for projects in the next growth stage, and a supply chain that will be unable to respond to growth signals This will choke off growth in the next economic cycle.”Its looking to be a pretty perfect storm for insolvencies this year in the construction industry. And what a time! With this recession, we need construction to lead the way forward, particularly with the housing crisis we are in. Will the construction industry continue to decline or is there at least some hope for a healthier future?If you are a worried director of a construction firm or a business related, do get in touch. Let our expert advisors talk through and consider the best way forward.

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More than 100 building firms predicted to go bust each week in 2023, according to new research

Construction Sector Insolvencies Hit A Record High

in Construction News

According to the latest data from the Insolvency Service, businesses within the construction sector are going bust at the fastest rate in a decade. As a result, the number of company insolvencies overall is being driven to a 13-year high.Data found that for the first half of the year there were 10,717 company insolvencies – of which the construction sector accounted for a fifth (2,094 insolvencies). When analysed more closely, in just the first quarter the construction sector reached 1,048 insolvencies. This marks the highest level since the same quarter of 2012. For the second quarter, numbers reached its highest since Q3 of 2009.Construction firms, which make up 7% of the UK economy, are being hit by rising material costs, staff shortages and falling consumer demand – leaving no other option than seriously squeezed margins.When you take into consideration that for each building project, the materials account for around a quarter of the total cost, it is no wonder there are struggles. The price of core materials such as timber and steel have risen around 17%-18% each. Smaller, local builders struggle most with vulnerability since they cannot benefit from economies of scale.Passing costs onto customers in response is proving difficult with clients rather just pulling out of the project and fewer new ones being requested.The construction industry has faced trouble for some time now, as reflected in data overtime – will the tables turn or is this the way forward for the sector?

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Construction Sector Insolvencies Hit A Record High

Construction Finance

in Construction

Having difficulty getting Construction Loans or Finance? Every business is different, however there are particular issues that construction businesses face which are unique to the sector.Often with low margins and tough trading conditions, cash flow can be a problem. Below is a list of problems we’ve seen happen in the industry:Retention sums not released at agreed times Delays in repayments from HMRC, regarding CIS deductions (which are connected to PAYE scheme). HMRC can be slow in making CIS refunds, leading to issues with cash flow. Loss of large contracts Issues with sub-contractors Difficult customers Lengthy contracts with prices agreed at beginning. I.e. quotes do not keep up with rising costs. Less focus on financial accounts due to management being onsite Hard to find new contracts if cash flow is tight, perhaps due to low credit ratingIt might be that an additional loan is not what is required....  As turnaround practitioners, our specialists can help tackle these issues with you to get your construction business back on track. We can go through all the available options, like expert assessment of the issues your company faces, improved financial reporting,  Time to Pay deals, CVAs and pre-pack administrations.  We can also find finance for construction companies in distress.We also have industry specific turnaround experts who can act as non executive directors, chairman or turnaround managers.  We have turned around construction companies from £500k to £25m sales.Call us on 0800 9700539 for free expert advice and a talk through your options. We can visit you onsite to discuss your specific situation.

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Construction Finance

Loans to help Carillion Subcontractors

in Construction Finance and Funding

Following the collapse of Carillion, the Government offered support to contractors by making available £100m funding for the banks to support companies affected. This is in effect an extension of the Enterprise Finance Guarantee (EFG) loan. Typically the British Business Bank working with the BEIS (Government Business Department) underwrite up to 75% of the loan. Banks vary in their approach to the scheme but the BEIS is actively encouraging its use.The package will provide support to high street lenders who might not otherwise have given loans to Carillion contractors because they may not have assets to put up as security. Advantages It can be good value but is never quick to raise this type of loan. The investment criteria are perhaps less stringent than non-guaranteed facilities. Capital and or interest holidays can usually be agreed. For distressed companies this can be a lifeline while they return to profitability. If you need to raise this type of loan remember it cannot be used to service arrears of VAT and PAYE. Being behind with tax payments  is likely to lead to a rejection of any proposal for an EFG loan. Disadvantages Not all applications are approved of course. If the contractor is clearly distressed the bank and or the BEIS may reject applications. Can you raise enough to provide a solution and adequate working capital whilst you return to profit? Can you service the loan? Merely creating more debt is not a solution where radical surgery may be needed. Also remember that almost always the loan is backed up by a personal guarantee.  If the bank can't get all the money out of you then they can then revert to the government to make up the shortfall. They are duty bound to pursue the personal guarantee in the event of a default and that could lead to bankruptcy/loss of home etc.So beware!Think of a CVA and restructure the company's fixed and viable costs AND improve working capital instead?!

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Loans to help Carillion Subcontractors

CVA Case Study – Scottish Recruitment Company

One of the directors of a Scottish registered company, trading since 1994 and now trading from premises in Edinburgh, contacted and then appointed KSA in June 2009 to assist with the preparation of a Company Voluntary Arrangement (CVA) to the company’s creditors.The company provides temporary and permanent personnel placements across a number of sectors including industrial, construction & property, manufacturing, technology, scientific and information technology to name but a few.The company mainly operates in the central belt of Scotland but has also provided personnel around Europe, Iraq, and other areas of the world.Over time the majority of the company’s business related to the construction and property sectors, making up approximately 40/50% of the company’s turnover.The company had invested quite heavily at the end of 2007 and beginning of 2008, taking on larger offices and recruiting 17/19 new sales team members. Almost half of the new staff were recruited to focus on expanding markets like house building and consultancy recruitment.During 2008 the company started to feel the early effects of the current economic downturn but similar to other companies the company was unaware of the drastic effect it would have on new business, existing business and also debt recovery.At the end of 2008 the company took steps to reduce costs by making a number of staff redundant and vacating its premises in Glasgow so as to only trade from its premises in Edinburgh. Despite these changes the company was struggling to deal with historical debt of approximately £1.35m owed to unsecured creditors, including approximately £1.1m owed to HMRC.So how did KSA Group rescue the business?Read the full case study to find out

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CVA Case Study – Scottish Recruitment Company