Johnston Carmichael appointed administrator for Scottish construction companies

09 April 2018 Authored by Consultancy.uk

Two Scottish construction businesses have collapsed into administration with the loss of more than 30 jobs. The liquidation of the firms will be presided over by restructuring specialists from Johnston Carmichael, who cited a broader construction industry trend, of reduced margins and cash-flow problems, as the cause of Alan Grant Grampian and ACG Contracts’ synchronised demise.

The British construction sector has endured a tumultuous first quarter of 2018. Despite obtaining a sequence of lucrative public sector contracts throughout 2017, Leicester-based firm Carillion collapsed at the beginning of the year, sending shockwaves through the outsourcing sector as a whole.

Capita saw its share value slump by 43%, while Serco also saw a 3.9% fall, alongside Kier (-1.3%), G4S (-1.1%) and Interserve (-1.9%). This was particularly unhelpful for the beleaguered Interserve, as the group – also best known for its work in construction – was already grappling with poor trading and climbing costs.

Johnston Carmichael appointed administrator for Scottish construction companies

Now, two associated construction businesses in Scotland have similarly collapsed into liquidation, as the sector continues to flounder. Aberdeenshire-based construction businesses, Alan Grant Grampian and ACG Contracts, both operated from offices at Main Street, Alford, before entering into administration at the same time, at the expense of 33 jobs. Alan Grant Grampian was previously involved in the construction of new homes, primarily for private individuals, while ACG Contracts delivered civil engineering services to commercial, private and public sector organisations including local authorities. Both companies have ceased to trade.

Professional services firm Johnston Carmichael has been confirmed to manage the winding down of both groups. As a member of global professional services network, PKF International, Johnston Carmichael is Scotland’s largest independent firm of business advisors, and one currently ranked as one of the top 20 accountancy firms in the UK. The firm’s specialists consult across a whole range of disciplines, including audit, tax, business and personal finance.

Cash-flow crisis

Restructuring Partners Gordon MacLure and Matt Henderson have been named by Johnston Carmichael as joint administrators. The duo have already overseen the termination of 14 of Alan Grant Grampian’s 19 employees, while 19 of ACG Contracts’ 21 staff employees have also been made redundant. The remaining employees have been retained to assist MacLure and Henderson with proceedings.

Commenting on the situation, MacLure stated that he believed the two companies were the latest victims in a continuing trend in the construction industry. He said, as like many building contractors, the pair had suffered from reduced margins and cash-flow difficulties in recent years.

MacLure added, “Our immediate focus is on the employees of both companies and we will be liaising with government agencies, including PACE (the national partnership scheme for responding to redundancies) to ensure they receive all possible support at this difficult time.”

British construction is also reportedly coming under pressure from uncertainty regarding the nation’s protracted withdrawal from the European Union. New office space under construction in the UK capital alone fell by 9% over the previous six months, with builds in London amounting to 21% fewer than last year, according to the latest available figures. Instead, cheaper refurbishments were up significantly – reflecting an increased developer caution amid continued uncertainty surrounding Brexit, and further troubling construction firms struggling with cash-flow problems.

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