Sister companies that turned over a combined £51.6m three years ago have gone into administration, with material and labour inflation blamed for their demise.
Drylining and fire-protection specialist Fireclad Limited and fit-out firm Harrison Jorge Limited have both gone under. Some 72 employees across both companies were made redundant prior to Interpath Advisory being appointed to take over the administration process.
The companies, based in Southend, Essex, were part of Adparo Group, which has not filed for administration.
Fireclad turned over £13.2m in the year to 31 March 2021, a drop from £23.4m in 2020, with the decline blamed on the impact of the pandemic. Pre-tax profit was £250,288 in 2021, down from £411,528 in 2020.
Harrison Jorge turned over £21.1m in 2021 and £23m in 2020. Its pre-tax profit in the 12 months to 31 March 2021 was just £8,746, down from £160,762 in 2020.
In 2019, amid a push for growth, Harrison Jorge turned over £31.8m, while Fireclad’s revenue was £19.8m.
An Interpath Advisory spokesperson said: “During 2020 and 2021, the companies were adversely impacted by the COVID-19 pandemic and associated lockdown measures. However, recent rises in the cost of materials and labour have placed an additional burden on both Fireclad Limited and Harrison Jorge Limited, which ultimately resulted in both companies being unable to service their debts as and when they fell due.
“After reviewing their options, the directors took the decision [to] place the companies into administration. All employees were made redundant prior to the appointment of administrators.”
The pair were among 15 companies in the sector that went under in June 2022 – more than double the number that went into administration in June 2021.
Interpath Advisory managing director and joint administrator Sarah Collins said: “Companies up and down the construction industry supply chain are battling enormous headwinds, from the rising cost of raw materials and energy to acute shortages of labour, to the burden of loss-making fixed-price contracts. Unfortunately, these compounding crises proved too difficult for Fireclad and Harrison Jorge to overcome.
“Our immediate priority is to provide assistance to employees to enable them to make claims from the Redundancy Payments Office.”