Tolent selects Interpath for administration
North East construction firm Tolent has fallen into administration, seeing hundreds of jobs lost across the region. The sale of its assets will now be undertaken by professionals from Interpath Advisory.
While the UK has technically avoided falling into a recession – recording flat growth, rather than negative growth in the last quarter of 2022 – its markets remains far from strong. In particular, the traditional bellwether of economic health that is the construction sector is in its own recession. Industry economists have already forecast construction output to fall by 4.7% in 2023, and as record inflation continued to bite while lending rates rise, that is likely to worsen before the end of the year.
Amid this, a major construction firm based in Gateshead has fallen into administration. Tolent is a Tyneside company which has been behind a number of landmark schemes across the North East since its founding in 1983. These included the £60 million Sage head office in Gosforth, Newcastle City Library, Wellbar House and the Beacon of Light in Sunderland.
However, the UK’s flagging economy has seen Tolent struggle to make ends meet in recent years. The contractor saw a 7% increase in group turnover to £197.9 million in 2021 – the highest since its launch – but the group still recorded a £4 million loss, amid what it described as “ a perfect storm” of adverse trading conditions – including the collapse of developer High Street Group. At the same time, the firm argued this compounded the impacts of the pandemic, a bad debt, a loss-making contract and the overall macro-economic environment which has been affecting the whole sector.
Alongside its head office on the Team Valley, the company also has bases in Leeds, Shotton Colliery, County Durham, and Teesside Industrial Estate, Stockton-on-Tees. It also had five subsidiaries – with a total headcount of 400. After James Lumb and Howard Smith from Interpath Advisory were appointed as joint administrators, less than 100 remain.
The joint administrators made 313 of the firms’ employees redundant immediately following their appointment. Meanwhile, 91 members of staff have been retained to assist them whilst they explore any possibility of a sale of the businesses and their assets.
James Lumb, a Managing Director at Interpath Advisory, commented, “Tolent is one of the most well-known construction firms in the North East. However, like many businesses across the UK’s building and construction sector, the Group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its supply chain, all of which unfortunately resulted in one of its major contracts becoming loss-making… Our priority in the coming days is to work with key stakeholders to assess options for each of the Companies, including options for ongoing contracts and live projects. We will also be providing support to those employees who have been impacted by redundancy”.
