Construction and development solutions provider GB Building is poised to enter administration after a select set of staff were informed that the company has filed a notice of intention to go into administration. Top and mid-level staff, alongside the company’s securities teams were told of the impending issue on Wednesday 4th March. Security staff began securing a number of sites on the same evening.
This will be one of the biggest and most high-profile failures the construction industry has seen in quite some time, shaking the rapidly bolstering confidence of many in the sector today.
Both staff and sub-contractors have been surprised by the news, with many feeling their projects with GB Building were stable and on course, with no sign of looming financial or organisational trouble. It was not until GB’s security staff began securing sites on Wednesday evening that there was any hint of a problem at ground level.
Last ditch attempts fail
On Thursday, GB Building chairman Michael Smout was working hard to piece together a financial rescue package with the assistance of the firm’s bankers, but the outlook did not appear good. The most recent available financial records reveal that the company made a £1.2 million pre-tax loss in 2013, on a turnover of £211 million.
It appears the business has been fighting for months, if not years, to tackle its worsening working capital deterioration. From arranging for accountancy and business advisory firm BDO to review the present situation and future options, to actively seeking new funding options through discussions with stakeholders and other parties – the top tier of the firm have not sat idly by. Sadly, these efforts have come to naught.
With serious cash flow issues to contend with, the company took legal advice to file for administration – offering them a different set of financial options going forward, but leaving many staff fearing for their jobs. One employee claimed staff were told that they were technically still in the employ of GB Building, but that they should now look for new roles elsewhere.
The company went into the hands of accountants yesterday, 9th March 2015.
What do you think lies behind GB Building’s cash flow problems? Have you ever found yourself redundant after your employer went bust? Share your opinions and experiences with other tradespeople below…