The cladding specialist company Cover Structure has gone into administration.
The reasons behind this are not yet clear; however, we expect that the recent increase in labour, pension, manufacturing and exporting costs may have something to do with it.
Who is Cover Structure?
Cover Structure has been operating from its base in Leeds since 1991. It was established by an innovative industry expert Frank Quinlan, who resigned as a director in 2011.
The company directly employs 40 office and site staff, though often provides work to contractors.
Cover Structure specialises in cladding buildings and is one of the leading UK companies in this field. The company prides itself on its professionalism and in-house manufacturing capabilities.
Its client base includes national building contractors, rail infrastructure companies, PFI projects, local authorities and owner/occupiers.
One of their most notable projects is the £250m Aberdeen Exhibition and Conference Centre (AECC). Cover Structure was the main cladding contractor and works closely with Robertson, the main contractor.
The administration announcement:
Cover Structure has not yet commented on its move into administration. In fact, the chief executive officer at Robertson, Derek Shaw, made the announcement on their behalf:
“[We were] made aware on Friday that Cover Structure, the subcontractor handling much of the cladding work on the AECC, was unfortunately about to go into administration.
“We worked proactively over the weekend to find a solution that would ensure the continuation of the project while securing the jobs of the contractors employed by Cover Structure.
“It is envisaged that Robertson will take over the remainder of the subcontract directly, including securing equipment and materials, while maintaining the existing operatives in their roles.
“We do not anticipate any delay to the completion of the AECC project.”
While the AECC project is set to continue on schedule, Cover Structure is also working on several other projects, including:
- New £53m private hospital in Edgbaston with Simons Construction
- Residential block at Weavers Quay with Graham Construction
- Thorpe Park (Leeds) with GMI
The future of these projects is still uncertain.
Why did they go into administration?
While Cover Structure has not revealed its motives for entering administration, we can assume that the company is experiencing financial difficulties.
Companies House records for the year to 31 December 2016 state that Cover Structure made a pre-tax profit of £362,000 from a turnover of £24.3m. This suggests that their outgoings were on the verge of exceeding their total income.
Companies use administration to pause all legal proceedings against them and give them some breathing room. During this time the directors can either restructure or make arrangements with creditors. If neither of these are successful, they may consider more terminal proceedings like liquidation.
Interestingly, Frank Quinlan set up a new company, CMP Roofing and Cladding Supplies Ltd last week. He will be the sole director. This might mean that we may see a phoenix company rise from the ashes of Cover Structure – we’ll just have to wait and see.