Subcontractor on Multiplex's £1.5bn White City scheme calls in Deloitte & Touche to oversee sale of assets
Roofing giant Coverite Ltd this week went into administration weeks after being appointed to the £1.5bn White City retail project in west London.
The £33m turnover company, which has worked on many high-profile jobs, including the Scottish parliament, appointed Deloitte & Touche on Monday.
The news comes as another blow to Multiplex, which is struggling to finish the Wembley project, and is also the contractor at White City. It said it was aware of Coverite's problems but had not been formally informed that the firm had called in the receivers.
A Multiplex spokesperson said: "We did recently appoint them to White City and we have recently been made aware of the financial situation, but we've had no confirmation of the problems."
The spokesperson added that Multiplex was confident that there would be no delay to the programme. He said: "It won't affect the project as we've only just appointed them."
Coverite's results, obtained from Companies House, indicate that the firm made a pre-tax loss of £838,000 in the year ended 30 June 2004, compared with a pre-tax profit of £272,000 in the previous year. The results also show how turnover increased markedly in the same period, from £20m to £33m, reflecting Coverite's rapid expansion.
The firm said in the notes to its 2004 results: "Since the financial year end, the group has incurred further losses which have had an adverse effect on the cash flow of the group. The losses have resulted from problems encountered on contracts within subsidiary company, Coverite Specialist Contracting."
One leading roofing contractor said Coverite had been a victim of trying to grow too quickly.
He said: "Coverite were too ambitious. They had long-term deals with the likes of BAA, Mace and Bovis Lend Lease but they still had the desire to grow and operate in specialist areas, such as cladding. They basically created a huge monster of a company and then had to feed it but couldn't."
One of the contenders is Allan Roofing. Luke Wessely, Allen's managing director, confirmed that he would be meeting with Deloitte & Touche to talk about buying certain parts of the business and existing contracts. Roofing firm Prater declined to comment, but is thought to be interested in acquiring part of the company.
A Bovis spokesperson said its work at project SLAM and Manchester Civic Justice Centre had been taken over by Coverite Roofing Services, which is still trading.
Coverite was one of 13 firms fined by the Office of Fair Trading in March for involvement in cartels. A source said the fine led to Coverite's pricing being scrutinised more heavily by clients. He said: "The fine was the final nail in the coffin."
- Cladding company Schmidlin (UK) has been renamed Lindner Schmidlin Facades after it was bought earlier in the month by German firm Lindner. It will now source materials from Germany and the Czech Republic.
The Coverite story
Coverite was founded in 1948 and built up a turnover of £33m. Group managing director Tony Speroni joined the family firm in 1956, and led it to some of the biggest roofing contracts in the country. It had a £10m contract on the Scottish parliament, and also worked on the University College London Hospital PFI, the Tate Modern, Paternoster Square and City Hall, all in London. It was fined in March by the Office of Fair Trading for involvement in cartels.