Jobs saved at North East construction firms despite administration

Jobs have been saved at two North East construction firms who were forced to call in administrators amid cash flow difficulties.

More than 140 jobs have been saved at two North East construction firms which were forced to call in administrators after falling into financial difficulties.

Civil engineering contractor J Hughes Construction collapsed into administration last week after experiencing cash flow problems and Baker Tilly were called in to organise affairs at the business.

Within days all 114 employees threatened with redundancy were transferred to a newly-formed firm.

Established 20 years ago by John Hughes, the Middlesbrough company carried out work across the region, working with homebuilders including Persimmon, Keepmoat, Redrow and Strata, while also contributing to high-profile projects at the likes of Gateshead International Stadium and Blaydon Leisure Centre.

The business is reported to have recorded sales of £27.9m for the 18 months to October 31, 2012, an increase from the £23.5m posted for the year ended April 30 2011.

Administrators Baker Tilly said 114 employees at J Hughes transferred to new firm Applebridge Construction, based in Stockton.

A spokesman for Baker Tilly said: “Ian Kings and Steven Ross have been appointed as joint administrators to J Hughes Construction Ltd.

“There have been no redundancies, and the jobs of the employees have been secured as a result of transfers to a new firm.”

Meanwhile, the same team at Baker Tilly have also been acting on behalf of a second North East construction business, Blaydon-based Holystone Ltd, which has struggled to maintain revenues over the last 12 months.

The firm – part of the Holystone Group – had been involved in earthworks, roads and sewer construction, demolition, waste reclamation stations and plant and skip hire, and it was the waste processing and disposal part of Holystone Ltd, which operated from Wallsend and Callerton, which fell into difficulties.

The last accounts filed for the firm, covering the year to March 31, 2012, details how sales dropped 20% to £9.9m from £12.4m and the firm began to experience losses on its major domestic waste contracts. The management disposed of the Wallsend site and its loss-making waste and skip hire business in March 2012 and six months later entered into a Company Voluntary Arrangement with its creditors.

Baker Tilly said the company had been in a Company Voluntary Arrangement, but struggled to maintain turnover, and cashflow proved to be an issue as a result of suppliers requesting payment up front. All 40 of the company’s employees were made redundant but the firm confirmed that the majority have been re-employed by the group, transferring to Holystone Civil Engineering which is fully operation with all works continuing as normal.

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