James Tickell and Carl Derek Faulds of Segensworth based Portland Business Support & Advice were appointed joint administrators of George H. Austin (Builders) Limited on 13th April 2015.
The company had traded as a commercial building contractor since 1972 and latterly began carrying out large housing projects for local authorities and housing associations. Historically the company had traded successfully and generated healthy projects, but began experiencing financial difficulties in 2014. Two significant housing projects were completed but proved to be loss making. In addition, the company had taken on a third housing project which was the largest contract the company had ever undertaken, which was due to complete in late 2014. Due to numerous problems it became clear that this would not be achieved and extensions of time were sought from the employer. The company began suffering cash flow difficulties and therefore negotiated more regular payments with the employer and made attempts to cut overheads.
In March 2015, the largest contract had reached unit completion but significant payments under the contract were not forthcoming. As a result, the company could not meet its pressing liabilities to sub-contractors or HM Revenue & Customs. The director sought independent advice from Portland and quantity surveyors were instructed to carry out a review of the company’s on-going contracts. It was concluded that the costs to complete the remaining work would exceed any eventual recoveries. Furthermore a number of other projects that the company had tendered for were delayed which left the company with insufficient work to generate future cash flow and profitability. Having considered the options available, the director decided to take steps to appoint administrators in order to protect the company’s assets whilst securing the best outcome for creditors.
A meeting of creditors has been convened for the purpose of considering the administrators’ proposals. The meeting will be held on 18th June 2015 at Holiday Inn Fareham, Cartwright Drive, Titchfield, Fareham, Hampshire, PO15 5RJ at 10.30am.
At this juncture we anticipate that there will be sufficient funds to discharge the claims of the preferential creditors and pay a dividend to the unsecured creditors. However, the quantum and timing of the dividend to unsecured creditors is currently uncertain and will depend upon the level of recoveries from the contract debts and retentions and the agreement of creditors’ claims.
The joint administrators are now issuing their proposals to creditors for consideration.
The full report can be accessed here