Building firm collapses with loss of 150 jobs

KPMG has been appointed as administrator to Midlands construction firm Clugston, which has collapsed following a series of losses on waste-to-energy projects, putting some 400 jobs at risk

James Clark and Howard Smith, associate partners in KPMG’s restructuring practice, have been appointed joint administrators to Clugston Group Ltd and Clugston Construction Ltd.

In addition, Clark and Chris Pole, a partner in KPMG’s restructuring practice, have been appointed joint administrators to Clugston Services Ltd.

 The business was established over 80 years ago. Operating from over 25 sites primarily across the North and Midlands, it has companies involved in construction, civil engineering, logistics, property development and facilities management.

KPMG said the businesses have suffered as a result of losses on a number of large and complex energy from waste contracts, accentuated by the insolvency of a key subcontractor.

Despite negotiations with key stakeholders to resolve issues caused by the losses, mounting pressures on the business have caused the directors to seek the appointment of administrators.

Following the administration, 150 of the companies’ 412 employees have been made redundant. The joint administrators say they will continue to trade certain divisions and are seeking to sell valuable contracts, with 262 members of staff retained to assist with this.

James Clark, associate Partner at KPMG and joint administrator said: ‘The directors of the business have worked tirelessly trying to rescue the group and have pursued discussions with a key stakeholder about a potential rescue deal.

‘Unfortunately, it has not been possible to obtain the funding required, and as a result, the directors concluded they needed to appoint administrators to protect the value of business.’

Two other companies in the group, Clugston Distribution Services Ltd and Clugston Estates Ltd, are not affected by the above and are continuing to trade under the control of their directors.

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