FRP named administrator of Leicestershire building company

Professionals from FRP Advisory have been installed to oversee the administration of one of the Midlands’ largest construction firms. The news comes after Paul John Construction saw turnover tumble by more than £30 million.

Established in 1976 by John Henry, Coalville based Paul John went on to become one of the biggest building companies in Leicestershire. At its peak the company grew to employ 70 staff, with a further 200 working on construction sites across the region. The contractor worked mainly on housing projects for the likes of Persimmon Homes and Redrow Homes.

However, economic uncertainty has plagued the construction sector in recent years, leading to a number of high-profile collapses in the industry across the UK. In the case of Paul John, the company struggled to make a profit over its last two financial years, as turnover rapidly declined from £70 million to £40 million. As a result, the firm recorded losses totalling £2 million in 2019 and 2018 – before the pandemic cemented its fate.

The construction sector is often seen as a key indicator for the health of the wider economy, and amid the onslaught of Covid-19 in early 2020, demand for construction labour fell 70%. While financial papers from Paul John suggested that turnaround efforts before that had been “on target for full profitability and cash generation,” then, the pandemic “significantly curtailed the progress that the business was making.”

As reported by Construction Enquirer, calls to its office started to be switched to answerphone in early May, and it has now been confirmed that the firm has been placed into the hands administrators. FRP Advisory partners Gary Hargreaves and David Acland have been put in place to handle the sale of the company’s assets.

A spokesperson for FRP further noted, “The company, which specialised in groundworks for the construction sector, has experienced significant financial challenges which left the business unable to meet its financial obligations… The joint administrators are proceeding with an orderly wind down of the business and are working with a specialist quantity surveying practice to extract value from the significant debtor ledger, whilst supporting affected employees in making their claims to the Redundancy Payments Service.”