Longcross Construction has been placed in administration putting hundreds of jobs at risk

18 June 2015

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. 

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. 

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