Begbies Traynor begin process of winding down £400m turnover contractor
Essex contractor Readie Construction has formally gone into administration with the majority of the firm’s 160 staff made redundant.
Begbies Traynor was appointed on Tuesday and added: “Unfortunately, the company will cease to trade immediately and the joint administrators will begin to wind down its operations with immediate effect.”
A handful of staff at the Romford firm have been kept on to help with the process.
The logistics and warehousing specialist is the biggest contractor to fail this year so far and its collapse has once again shone the spotlight on the problem of the industry’s wafer-thin margins.
In its latest published accounts, filed at Companies House last October, Readie reported a turnover of £421m in the year to March 2023, a rise of 22%.
But pre-tax profit nosedived two-thirds to £1.7m, although its cash balance at the year-end improved by £1.2m to £12.3m.
The fall in profit meant the firm’s pre-tax profit margin was shredded to just 0.4% from 1.6% last time which itself was down on the 1.7% it posted the year before, when it became an employee ownership trust.
Readie said 2023’s profit was hit by several challenges including supply chain failures and the higher cost of bringing in replacements, the impact of inflation and jobs being competitively tendered, rather than negotiated.
Last month, Begbies Traynor said construction had the most firms considered to be in critical financial distress with 8,000 building businesses on the edge of collapse in the last three months of last year.