London groundworks firm in administration

Aaron Morby 14 years ago

Brentford-based groundwork contractor Euro Earthworks has collapsed sending jitters through the industry.

The £22m turnover firm was placed into administration by directors on Tuesday. The move comes just  three weeks after another south east firm, Foundation Solutions (FSL), was also placed in the hands of the administrators.

Workers at Euro Earthworks expects to learn their fate today when the administrators spell out what will happen in coming weeks.

Euro Earthworks has worked for main contractors on big package contracts across the south east for more than a decade and prided itself for using its own direct labour. The firm is believed to employ around 100 workers.

According to the last set of accounts, Euro Earthworks turnover rose 28% to £21.8m last year on pre-tax profits down by half at £111,000. But even then cash inflows were heavily down and interest payments on loans mounting.

Its recent clients include Carillion – where the outfit worked on foundation for office blocks at Thames Bankside in London and a £10m package for Manor Royal in Crawley – Galliford Try, Miller and Costain.

The ground engineering contractor diversified three years ago setting up a new business called SETA to chase reinforced concrete frame contracts. But this sector has been particularly hard hit by the down turn.

In the 2009 accounts, the directors warned that steep increases in materials prices, especially concrete were impacting on the business.

“The increase in turnover naturally produced a reduction in the company’s cash position in the year, however the company has taken measures to reverse this in the current year, ” said the director’s statement.

In September alone, Euro Earthworks was facing five applications for County Court Judgements.

Just three weeks ago Maidstone-based Foundation Solutions Limited (FSL), which also employed around 100 workers, went into administration.

FSL carried out medium sized groundwork and reinforced concrete contracts for civil engineering contractors across the south east.

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