ISG appoints administrators

The construction industry has been left reeling by the sector’s largest failure since Carillion.

After months of speculation about the financial health of the London-based firm, six ISG Group entities have filed for administration. They are: ISG Construction, ISG Central Services, ISG Engineering Services, ISG Retail, ISG UK Retail, and ISG Jackson.

ISG Fitout is understood to be unaffected.

An email sent to staff by chief executive Zoe Price yesterday said they would be paid as planned on Monday but that all sites would be closed as of today [Friday].

ISG’s collapse can be put down to “legacy issues”, according to the email, published in full by Construction Enquirer.

“By way of background, the group’s trading and cash performance has been impacted by legacy issues relating to the large loss-making contracts secured in between 2018 and 2020 (primarily in the residential, logistics and distribution sectors as well as some data centre projects),” the email states.

ISG’s current Northern projects include a £29m gig to rebuild five fire stations in Greater Manchester and the £59m refurbishment of HMP Liverpool.

As a group, ISG recorded revenues of £2.2bn and pre-tax profit of £11.5m in the 2022 financial year.

ISG Construction made £544.7m in income in 2022, down more than £100m on the previous year, and a £3.2m pre-tax profit.

At the time, the directors of the firm said the company had “adequate resources to continue operational existence for the foreseeable future”.