Specialist property company collapses
9 Mar 2020
Manchester fit-out contractor Styles & Wood, which was forced to resign last year from a contract to refurbish HMRC offices in Liverpool, has gone into administration
9 Mar 2020
The property company had been in existence for 35 years and listed on the Stock Exchange in November 2006. It then delisted in March 2018 after being taken private in a £42.5m deal.
The firm rebranded in November 2018 becoming part of an enlarged group called Extentia, which includes 11 businesses including FM specialist, Concourse, furniture supplier Ralph Capper and engineering consultant GDM.
Hunter Kelly, Sam Woodward and Charles King from EY’s restructuring team have been appointed joint administrators to Styles & Wood and Extentia Group Ltd.
Craig Eastwood, Extentia Group chief executive, said: ‘Extentia’s programme management business Styles & Wood has experienced significant cashflow issues following a handful of large developer-led projects.
‘By nature, this type of work is complex with high revenues and low margins; a situation inherited by Extentia Group’s new leadership team who succeeded predecessors at the end of November 2019.
‘Unfortunately these cashflow issues have become too significant for Styles & Wood to sustain and so the difficult but correct and responsible decision has been made to file an intention to appoint administrators and discontinue all programme management activities.’
In its last set of results as a listed firm, Styles & Wood posted a £3.5m pre-tax profit on revenue of £105m in the year to December 2016.
In its last set of accounts for the 18 months to June 2018, the firm sank to a pre-tax loss of £5.5m on revenue of £151.5m.
Styles & Wood had a challenging time in 2019, including the loss of a £38m contract it won in February 2018 to fit out and refurbish the India Buildings in Liverpool as government offices, for use by HMRC amongst other departments.
The company fell behind schedule and was replaced by Caddick Construction in September.
At the time Styles & Wood issued a statement saying: ‘There have been significant issues giving rise to delays on India Buildings, namely the discovery of large volumes of asbestos and extensive additional ceiling works requiring specialist heritage planning permission.
‘A dispute has arisen, and Styles & Wood can confirm it is no longer working on the project. We consider the termination of our contract to be wrongful and we are currently taking advice on next steps.’
Extentia said its furniture, fixture and equipment and professional services businesses were unaffected by Styles & Wood’s collapse.
Charles King, associate partner EY and joint administrator, said: ‘In the last year, Styles & Wood has experienced significant losses in some parts of the business that has placed the company under severe cash pressures.
‘The company’s position was initially alleviated by additional shareholder funding in recent months, but the extent of the losses and the impact on the business has been greater than expected.
‘The directors of the companies have been in discussions with a number of parties to achieve a solution, however it has not been possible to raise the substantial further funding needed to enable the companies to trade through these difficulties.
‘As a result, the directors have had to place the companies into administration.’
The administrators are actively exploring a sale of Styles & Wood’s ‘technologies’ division, which employs eight people.
King added: ‘Regrettably, it has been necessary to make circa 230 redundancies predominantly within Styles & Wood’s “Frameworks”, “Projects” and “Mobias” divisions, which have insufficient financial resources to continue to trade.
‘We are working with the employees to ensure they are being offered appropriate support and advice.’