Beaumont Morgan’s trade creditors to be left empty-handed

The collapsed construction company owes £7m to its supply chain, but administrators predict more than 200 subbies will be left out of pocket. 

Beaumont Morgan Developments appointed Begbies Traynor as administrator earlier this year, owing £12.3m to creditors all told. 

The company owes £4.4m to parent company Fortis Holdings and £1m to HMRC. The remainder of the £12.3m is owed to unsecured trade creditors, including £1.1m to David Ashley Construction.

Administrators predict that “realisations will not be sufficient to pay a general dividend to unsecured creditors”. 

Of the three contracts the company held in the lead up to the appointment of administrators, two were for parent company Fortis. 

However, those two contracts – for the 375-home Bridgewater Wharf and the 900-home Fortis Quay – were terminated prior to the start of the administration period. 

The third contract was with Clarion Housing Association, for whom Beaumont Morgan was building the 271-home Amplify. 

Work on all three schemes has stopped and the developers are in the process of appointing contractors to complete the jobs. 

When Begbies was appointed as administrator, all 22 Beaumont Morgan staff were made redundant. 

BM owes £4.4m to Fortis Holdings, the developer behind Fortis Quay. Credit: via Igniyte

Beaumont Morgan traces its problems back to 2016, when problems on a job in Sheffield hit the contractor’s turnover.

Despite this, revenue continued to grow steadily from £26.4m in 2016 up to £47.1m in 2020.  

However, Beaumont Morgan dipped in and out of the red in that period. In 2016 the company recorded a £2.3m pre-tax profit. This dropped to £205,000 the following year. The company reported a £119,000 loss in 2018. 

The contractor narrowed its losses in 2019 to £72,000 and returned to profit in 2020. 

Beaumont Morgan predicted turnover for the year ended March 31 2021 would have been £54m, but the accounts were never finalised. 

In the eight months from March 2021 to December 2021, revenue dropped to around £10m, according to administrators. 

Other issues attributed to the company’s collapse include its pipeline being impacted by the pandemic, project delays, the rising costs of materials, and subcontractor insolvencies. 

In addition, Beaumont Morgan lost several legal disputes with subcontractors worth around £8m, according to an administrators report. 

Beaumont Morgan is the latest North West contractor to appoint administrators following the collapse of several other outfits in recent years.

Bardsley Construction, Pochins, CPUK, Goodwins Construction Services Group, Harry Fairclough, Cruden Construction and Artez have all gone out of business since 2019.