Contractor appoints administrator as data suggests it did not have sufficient funds to settle trade accounts
Lancsville Construction has become the latest fatality of the recession, announcing it had gone into administration yesterday.
Vantis Business Recovery Services was appointed as administrator by Agilo - a firm that specialises in coming to the aid of distressed companies. It is understood to have lent £10m to Lancsville in 2008.
In return for the loan, Agilo was granted a charge over Lancsville's assets, making the venture capitalist firm a secure creditor. Agilo will subsequently be paid off before any trade creditors.
The latest accounts filed at Companies House are for the year ending 31 January 2008, which showed then that the company's trade credit stood at more than £22m.
Data later collected by credit reference agency Top Service suggested there were not sufficient funds available throughout 2008 and 2009 to settle trade accounts.
Lisa Cardus, Top Service's director, said: “A number of our customers began encountering slow payments from Lancsville before Christmas 2007. The payment difficulties worsened throughout 2008 and 2009 and problems finally came to a peak in September of 2009 when payments more or less dried up.”
About 77 county court judgements totalling more than £1.1m have been filed against Lancsville since May
Cardus added: “Our data suggests that it could be down to a combination of over-trading and the effects of the recession. During 2007 turnover almost doubled from £68m to £131m. Such rapid growth can put a serious strain on a company's cash flow”.
Henry Construction and Henry Cranes, which are owned by the Henry family, who own Lancsville, have also been placed into administration.
About 200 jobs will be affected.