Tue, 26 Nov 2013 | ADMINISTRATION
Civil engineering contractor J Hughes Construction entered administration on 20 November after cash flow difficulties.
The Middlesbrough-based business operated throughout Yorkshire and the North East of England, and did most of its work for housebuilder firms including Persimmon, Keepmoat, Redrow and Strata.
Baker Tilly has stepped in to organise matters for J Hughes and to pass its contracts on to other companies. There are rumours that newly formed Applebridge Construction, based in Stockton-on-Tees, is among the parties interested in taking on jobs and some of the staff.
Established 20 years ago by John Hughes, the business was sold to his cousin Donal, via a management buy-out deal in the spring of 2011.
Under the new ownership, more care was taken over the invoicing at the company, and successfully reduced its bad debts as a result.
The tide turned when Top Service, a credit reference agency, started to receive reports of non-payment in July from about 25 of J Hughes’ customers.
“Our customers noticed slowing payment terms earlier this year and due to an increase in reports of non payment, we took to decision to remove the credit limit and sent our customers an early warning notification some weeks ago,” a spokeswoman for Top Service told the Construction Enquirer.
It recorded sales of £27.9 million for the period starting 1 May 2011 to 31 October 2012, with pre-tax profits of £18,281. Its revenues had increased from £23.5 million, for the year ending 30 April 2011.
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