The Northumberland Gazette has reported that A Cramlington-based construction company has taken action to “protect the position of the business” after a winding-up petition from HM Revenue and Customs (HMRC).
Merit Group Services Limited has filed a Notice of Intention to Appoint Administrators, saying the petition caused project delays and “significant additional pressure” on cashflow, though it remains “confident that a solution to this difficult situation can be found.”
The company heads a group of 16, including Merit Holdings, which is working with Northumbria Healthcare NHS Foundation Trust on the £35m Berwick Community Hospital and a medicines manufacturing unit at Seaton Delaval. Some of the hospital units have been built at Merit’s Cramlington site and transported to Berwick for installation.
A Merit spokesperson said: “The recent filing of a winding up petition against Merit Group Services resulted in certain customer projects experiencing delays, which in turn has placed significant additional pressure on the group’s cashflow.
“We have therefore taken the decision to file a Notice of Intention to Appoint Administrators in order to protect the position of the business while we explore options. We remain confident that a solution to this difficult situation can be found.”
HMRC has not disclosed its reasons for the petition, saying such action is only taken “once we’ve exhausted all other options.”
A trust spokesperson said: “Northumbria Healthcare has been made aware that Merit has filed a notice of intention to appoint an administrator. This is a very unfortunate situation and we appreciate that this will be a very difficult time for all involved.
“The trust is continuing to work in partnership with the organisation and its advisers, and has adhered to the contractual agreements in place.
“We have robust plans in place to ensure construction work continues to progress both the Berwick Community Hospital and Medicines Manufacturing Centre at Seaton Delaval.
“We remain focused on delivering both projects as planned and are in on-going dialogue with all relevant parties to ensure continuity and minimise any potential disruption.”
Construction businesses have the highest insolvency rates in part due to the “lumpy” nature of their income, complex contracts and unforseen construction problems.
See how RMT KSA has saved construction companies using our innovative turnaround techniques. We also have an office in Berwick!
Watch Our Video For Employees
Written ByRobert Moore
Marketing Manager
Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.
Rob is now working with the Board at RMT KSA to develop strategic marketing programmes to support the business plan and drive more company rescues.
