Longcross, the £230m
turnover construction company has gone into administration with Lee Manning and
Matt Smith from Deloitte running the company. This follows the loss of support
of their bankers.
Longcross is based in Surrey but with a regional base in Sheffield.
The firm’s engineering divisions – LX Engineering (North) Ltd,
LX Engineering (South) Ltd and Longcross Fire and Security Ltd – are unaffected
by the administration and are trading normally.
Longcross made its name in the retail sector winning a string of
contracts with major supermarkets.
Obviously this refitting work has started to decline following the
shelving of a number of new store openings amongst the big 4 supermarket
chains. 35% of revenue did come from
work outside their core work of retail fit outs. Longcross made a pre-tax loss of £1.25m on a
turnover of £231m.<o_p></o_p>
There had been rumours about the business being in trouble amongst
subcontractors and staff but it was still a surprise when the announcement was
made as management had not communicated with the staff. The firm employed 315 people – 275 in the office and 35 on site.<o_p></o_p>
It should be remembered that in order to preserve value
and avoid putting creditors in a worse position leading up to an administration, the staff and suppliers cannot be given advance warning – otherwise everyone
would down tools and withdraw supplies. There would be chaos before any
appointment. This would only make the costs
of administration higher and would no doubt destroy any remaining value. Credit agencies had already warned suppliers
not to give any credit to the company.
The administration also leaves in limbo a major deal with
developer Criterion Capital to deliver three major offices to flats
conversions in Croydon, worth up to £48m