Pochin’s collapse hits subcontractors for £9m

Aaron Morby 5 years ago
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Subcontractors and suppliers to the construction arm of collapsed Pochin’s Group will be left £8.9m out of pocket.

Pochin's former directors (l-r)Jim and Bob Nicholson
Pochin's former directors (l-r)Jim and Bob Nicholson

Most of the Pochin’s Group was placed into administration early last August with the loss of over 120 jobs.

Administrators from Grant Thornton have now set out what is owed to unsecured creditors of the main Pochin Construction business.

Among those firms taking hits are Lancashire-based CS Civils and Groundworks, Staffs-based Carter Electrical Services and JP M&E Services, as well as Liverpool-based HE Simm.

The Cheshire building and property group’s management blamed four problematic multi-storey residential contracts with one developer for tipping the whole £60m turnover business over the edge.

All four contracts suffered from design issues leading to significant delays.

The situation was then worsened by supply chain failure and shortfalls in the recovery of cash owed, leading to losses across the quartet of contracts totalling at least £17m.

Facing a growing cash flow crisis the management started to implement a cost-cutting plan and offload commercial properties.

A month before Pochin’s collapse family directors Jim and Bob Nicholson injected £1.5m to provide working capital.

Despite market interest in several properties, the firm ran out of time and cash failing to secure sales before the appointment of administrators.

Grant Thornton said it was pursuing £13.4m owed on seven contracts in progress at the time of administration and two claims on contracts, but only £900,000 was likely to be recovered.

But with £89m owed to total unsecured creditors – including intercompany debt of over £11m, pension shortfall of £25m and non-performance claims of £18m,  firms owed money are expected to receive less than half a pence in the pound.

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