Stockport-based contractor blames collapse on penalty costs on two major projects and cash-flow problems caused by recession
Stockport-based contractor Multibuild, which revealed a £69m turnover in its final accounts, is to be wound up.
The firm had entered a company voluntary arrangement with its creditors in November, with a view to paying off its debts as a going concern.
However, its final accounts were posted on Christmas Eve and in them the firm announced it would be wound up.
Chief executive Mike Peden said in the financial report: “Negotiations with the company’s bankers [Natwest] have been ongoing throughout most of 2009 but due to such uncertainties in the company’s cashflow forecast it was not possible to obtain further funding for working capital.”
Multibuild blamed its collapse on the late delivery and poor quality of modular units it was using on two major projects, which caused delays and penalty costs, as well as highlighting problems over rising subcontractor costs, which were exacerbated by the recession and caused “severe cash flow problems”.
The accounts show that turnover dropped from the £71m posted in 2007 to £69m in 2008, but pre-tax profit took a more considerable dive from £1.1m in 2007 to a loss of £4.4m in 2008.
The firm is believed to have around 250 creditors who are hoping for some return.
The insolvency specialists Leonard Curtis, which has been managing the CVA, said it is trying to achieve “realisation of the company’s assets”.