Newly released Creditsafe data shows that construction administrations almost doubled year-on-year in October, with 37 failures compared with 19 the year before.

And the year-to-date total of 312 marks a 58 per cent increase compared with the first 10 months of 2022.

Eleven firms were large enough to file turnover figures with Companies House, while 10 employed two or fewer staff.

A big factor behind the October total was the demise of AIM-listed Inland Homes plc and nine associated companies. The housebuilder called in administrators from FRP Advisory, as uncertainty related to regulatory compliance meant it could not publish audited accounts for the past two financial years.

Work subsequently stopped on the £90m Patchworks high-rise scheme in Walthamstow.

Inland Homes’ most recent accounts, covering the year ending 30 September 2021, showed turnover of £181.7m with pre-tax profit of £13.2m delivering a margin of 7.3 per cent. The firm employed a monthly average of 143 staff in the year.

Its subsidiary Inland Ltd is also included in the October list. In its most recent accounts to 30 September 2021, turnover more than doubled to £83.3m, generating pre-tax profit of £15.7m.

Inland Partnerships Ltd (another subsidiary) posted turnover of £68.1m for the year ending 30 September 2021 versus £54m the previous year. The company was able to trim its pre-tax loss slightly from £1.5m to £1.3m.

FRP Advisory is handling the affairs of these and other Inland majority-owned firms. These include: Appletree Farm Cressing; Aston Clinton Developments; Brook Street Properties; Bucks Developments; Inland (STB); and Thames Homes. Inland also held a minority stake in Cheshunt Lakeside Developments.

October was also notable for the collapse of major mechanical and electrical (M&E) specialist Michael J Lonsdale. Administrators from Begbies Traynor are trying to sell off the company’s assets in a bid to recoup money for creditors.

Wellingborough-based subsidiary MJL Midlands (formerly E7 Building Services) also went under, little more than a year after its acquisition.

Ongoing projects for Michael J Lonsdale included the University College London Queen Square Institute of Neurology, which was due to be completed in July 2024.

The firm turned over £191m in the 12 months to 30 September 2022, making a £2.5m profit – down slightly from £2.7m a year previously.

Marc Hanson, a partner in law firm Mishcon de Reya’s construction group, warned: “In the short term, MJL’s [Michael J Lonsdale’s] insolvency will likely drive inflation for M&E work and will drive increasingly risk-averse behaviour from main contractors.”

Staines-based Richardson Roofing called in administrators from Begbies Traynor on 23 October. The envelope contractor had a broad portfolio of completed projects, including internal cladding for West Ealing Station and roofing for Kier Construction at the Grade II-listed Morley House (pictured) in London’s Regent Street.

Other major clients included Bowmer & Kirkland, ISG, Osborne and Willmott Dixon.

In its most recent accounts for the year ending 31 August 2021, Richardson Roofing posted turnover of £8.2m, up by 19 per cent on the previous year’s £6.9m. It fell into the red, however, as a pre-tax profit of £202,555 turned into a loss of £135,822. Cash at hand eroded from £2.9m to £1.2m but the firm paid out an ordinary dividend of £2.3m during the year.

One company was bought out of administration in October. Durham-based Floors to Walls collapsed amid “trading challenges in the 24 months following the outbreak of the Covid-19 pandemic and the closure of non-essential businesses”, according to administrators from FRP.

The residential cladding firm was sold to F2W Ltd for £40,000. Floors to Walls posted turnover of £1.9m in its most recent accounts to 31 May 2022.

Much darkness, little light

Almost 6,000 construction businesses are on the brink of bankruptcy, according to the latest quarterly Red Flag Alert report from Begbies Traynor. This marks a 46 per cent increase compared with the report for the second quarter of 2023.

Wayne Beck, partner on the finance and restructuring team at law firm Faegre Drinker, said this is “stark proof of the effect that the current economic climate is having on UK businesses”.

He added: “Now more than ever, companies should consider restructuring options to free up cashflow and ensure the best chances of weathering a turbulent economic climate.”

Administrations are yet to reach their peak in construction and other industries, according to Sarah Rayment, managing director and co-head of Kroll’s global restructuring practice.

“The cost of borrowing and the lack of access to working capital coupled with difficulties in passing on increased supplier and material costs will undoubtedly continue to leave companies incredibly vulnerable,” she added.

The Bank of England announced on 2 November that it was retaining its 5.25 per cent base interest rate, but it remains high by recent historical standards.

“High interest rates and the lack of credit are having a significant detrimental impact on contractor cashflows,” said Mishcon’s Hanson.

This was echoed in a 31 October joint statement from Builders Merchants Federation chief executive John Newcomb and Construction Products Association chief executive Peter Caplehorn. They described growing problems of cashflow and liquidity, adding: “Everyone in the industry, from clients through contractors and the materials supply chain, has a role in addressing this.

“For example, hardening payment behaviours between tier one, two, three and four contractors are only adding to market pressures, especially on smaller firms.” 

Company name	Location	Date of administration	Documents filed	Description of company activities
ALFA ESTATES (UK) LTD	London	31 Oct	Administrative receiver appointed	Development of building projects
APPLETREE FARM CRESSING LTD	Buckinghamshire	12 Oct	Administration order	Development of building projects
ASTON CLINTON DEVELOPMENTS LTD	Buckinghamshire	12 Oct	Administration order	Development of building projects
B & N DEVELOPMENTS LTD	London	17 Oct	Administrative receiver appointed	Development of building projects
BONVILSTON VALE LTD	London	13 Oct	Administration order	Development of building projects
BROOK STREET PROPERTIES LTD	Buckinghamshire	12 Oct	Administration order	Development of building projects
BUCKS DEVELOPMENTS LTD	Buckinghamshire	12 Oct	Administration order	Development of building projects
CAUSEWAYHEAD DEVELOPMENT LTD	West Yorkshire	18 Oct	Administrative receiver appointed	Development of building projects
CHESHUNT LAKESIDE DEVELOPMENTS LTD	Buckinghamshire	6 Oct	Administration order	Development of building projects
COUNTRYWAY HOMES LTD	Lancashire	11 Oct	Administrative receiver appointed	Development of building projects
DEVCOR (PLYMOUTH) LTD	Plymouth	17 Oct	Administrative receiver appointed	Development of building projects
FLOORS TO WALLS LTD	Durham	11 Oct	Administration order	Floor and wall covering
HAMON UK LIMITED	Hull	06 Oct	Administration order	Other specialised construction activities n.e.c.
HINCROFT LIMITED	London	24 Oct	Administration order	Development of building projects
INLAND (STB) LTD	Buckinghamshire	12 Oct	Administration order	Development of building projects
INLAND HOMES PLC	Buckinghamshire	12 Oct	Administration order	Development of building projects
INLAND LTD	Buckinghamshire	12 Oct	Administration order	Development of building projects
INLAND PARTNERSHIPS LTD	Buckinghamshire	12 Oct	Administration order	Construction of domestic buildings
JAMES KILLELEA & COMPANY LTD	Lancashire	18 Oct	Administration order	Other specialised construction activities n.e.c.
JOURNEY BUILDING CONTRACTORS LTD	Southampton	06 Oct	Administrative receiver appointed	Other building completion and finishing
LOGIE GLAZING AND BUILDING SERVICES LTD	Dundee	03-Oct	In administration	Development of building projects
M IGOE LTD	Cheshire	30-Oct	Administration order	Construction of commercial buildings
MB MASONRY LTD	Wigan	31-Oct	Administration order	Other specialised construction activities n.e.c.
MICHAEL J LONSDALE LTD	Berkshire	06-Oct	Administration order	Plumbing, heat and air-conditioning installation
MJL MIDLANDS LTD	Northamptonshire	06-Oct	Administration order	Electrical installation
P N T CONTRACTORS LTD	Hertfordshire	16-Oct	Administration order	Construction of commercial buildings
PURE PROJECT 1 LTD	Preston	12-Oct	Administrative receiver appointed	Development of building projects
REAL (EALING) LTD	West Sussex	25-Oct	Administrative receiver appointed	Development of building projects
RICHARDSON ROOFING (INDUSTRIAL) LTD	Middlesex	23-Oct	Administration order	Roofing activities
RINGWAY HOUSE DEVELOPMENTS LTD	West Midlands	27-Oct	Administrative receiver appointed	Development of building projects
SHERWOOD OAK HOMES LTD	Essex	10-Oct	Administration order	Development of building projects
THAMES HOMES LTD	Buckinghamshire	12-Oct	Administration order	Development of building projects
THE BROADWAY (EALING) LTD	Essex	13-Oct	Administrative receiver appointed	Development of building projects
TIME GB GROUP LTD	Hampshire	13-Oct	Administration order	Development of building projects
TROIKA CONSTRUCT LTD	Cardiff	04-Oct	Administration order	Development of building projects
WOOD FARM DEVELOPMENTS LTD	Ipswich	18-Oct	Administrative receiver appointed	Development of building projects
XYZ RAIL LTD	Cumbria	06-Oct	Administration order	Construction of commercial buildings