Eight companies owed £1m or more by London high-rise specialist

Dozens of firms are owed a total of more than £43m following the collapse of London high-rise builder Henry Construction Projects earlier this summer.

The £400m turnover firm sank into administration in early June after weeks of speculation about the health of the contractor.

A progress report filed by administrators FRP Advisory to Companies House reveals eight firms are each owed more than £1m by the collapse with one owed just over £6m. And a further eight firms are also owed more than £500,000 each. The total amount owed to all firms is £43.4m.

FRP was called in 13 years after the firm was set up which, FRP said, saw “significant revenue growth [and] most of this developed as a result of the size of contracts it undertook”.

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Henry was winning work on fixed price contracts, which administrator FRP said were “keenly priced” 

The report added: “The company’s business model was to enter into fixed price construction contracts which were keenly priced to give them a competitive edge over the company’s competition.”

It said margins on its contracts were around 13% which were “adequate when base costs remained static”.

But FRP said Henry was caught out by rising costs of materials and labour in the past couple of years and “the fixed price nature of their customer contracts cause[d] cash reserves to reduce, [meaning] it became clear the company would be unable to compete the existing contracts”.

FRP, which was first contacted by Henry in the middle of May, said the company was trading solvently in the year to June 2022, but that “it was clear that by continuing to trade, the mounting losses on all the active projects had resulted in the position deteriorating quickly”.

Hemry was hit with a winding up petition at the end of May by a firm owed £283,000 with the petition “subsequently supported by other creditors”.

Henry also had 54 employees and a further 41 subcontracted quantity surveyors and site managers.

According to FRP, employees are owed £100,000 in missing wages and holiday pay although HMRC is not expected to make a claim and not listed as being owed any money.

Unsecured creditors have been told they may get some money back while the former employees have been told they can expect to receive their missing money in full.

In its last set of accounts, Henry Construction Projects posted an improved turnover of £402m in the year to June 2021.

The figure was up 7% on the previous 12 months with pre-tax profit during the period up 8% to £14m.

As well as high-rise, the firm also carried out civils, groundworks and reinforced concrete work.

Director Mark Henry was also a director of £140m turnover Lancsville Construction which was set up in 1976 by his father William but went into administration at the end of 2009.