Founder confirms that regional subsidiaries set to go into administration
A partnerships housing business formed two years ago from subsidiaries of contractor Rydon is set to go into administration, with all staff to be made redundant.
The founder of Real Group, experienced former Wates housing boss Paul Nicholls, has filed notices of intention to appoint administrators for the group’s two regional subsidiaries, Real LSE and Real SW.
Real Group, created in 2021 from the South-east and South-west divisions of Rydon Construction, reported turnover of £56.9m in its accounts to February 2022, and has won work from the likes of Southern Housing Group, A2Dominion, Spelthorne Council and Cornerstone since being set up.
Nicholls told Building’s sister title Housing Today both regional subsidiaries are now “likely to go into administration” and that “all staff have been made redundant to mitigate creditor loss” but added he was unable to provide any further detail at the current time.
The most recent accounts of the group holding company, Real Places Ltd, show that almost 90 people were employed by the firm, which boasted at the time a secured pipeline of £73m of work for the year ahead, plus a further £129m of work for later years.
However, the accounts also showed the firm reporting a £3.7m pre-tax loss in the year and a similar-sized deficit on the balance sheet. In comments to the accounts, the firm said that it was then in a “good position for growth” but that “a combination of exceptional costs, delayed starts, extensive inflations and covid related supply chain issues following the relaxation of restrictions impacted on the group’s financial performance”.
It said this had particularly impacted upon the business in the South-west.
Nicholls, who bought the Real businesses from Rydon after working for six year at Wates following more than a decade at United House, had set an ambition to grow Real to a £300m a-year turnover partnerships housebuilder within five years.
Nicholls is reported to have told staff of the redundancy decision in an email yesterday in which he said that “wider market conditions have got the better of us” pointing to rising inflation and project delays.