Price hikes and shortages shoot Wildgoose down

Aaron Morby 1 year ago
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Wildgoose Construction has confirmed it has appointed administrators in the face of a cash crisis driven by labour shortages and big materials price hikes on fixed-price jobs.

Fourth generation chairman Jonathan Wildgoose says the business ran out of options.
Fourth generation chairman Jonathan Wildgoose says the business ran out of options.

Forty-six members of staff have been made redundant, with a small number retained to assist the joint administrators with the wind-down of the business.

Interpath Advisory has taken control of the Derbyshire building contractor, which remained in family control for four generations after being founded in Matlock in 1896.

The now Alfreton-based business had recently experienced significant margin pressure as a result of rising raw material prices, supply chain disruption and labour shortages, which resulted in many of its fixed-price contracts becoming loss-making.

The adverse impact of these loss-making contracts on the financial position of the firm was further exacerbated by significant one-off costs, including the insolvency of several subcontractors and bad debts arising following the collapse of a key client.

Following a detailed review of Wildgoose’s financial position and its trading projections, the directors decided there was no other course than to place the firm into administration.

Howard Smith, joint administrator at Interpath Advisory, said: “These are extremely difficult times for companies across the construction sector, with recent surges in the price of raw materials, coupled with supply chain disruption, acute labour shortages and wage inflation putting businesses under significant pressure.

“Unfortunately for Wildgoose Construction, these issues ultimately resulted in several of its fixed-cost contracts becoming unsustainably loss-making, and when combined with the other unexpected significant one-off costs and liabilities which had arisen, the directors had no alternatives other than to place the company into administration.”

Jonathan Wildgoose, chairman of Wildgoose Construction, said: “In light of the multiple challenges being faced by the business, our efforts since the commencement of the pandemic have focused on exploring all possible options in an effort to secure a solution which would have safeguarded the future viability of the business.

“It is with great sadness that we had no alternative but to cease to trade and take the necessary steps to place the company into administration. On behalf of all of the directors, I would like to place on record our thanks for the huge efforts of our employee base and all other stakeholders.”

Chris Davies, Managing Director of DRS Bond Management, said: “The recent rash of administrations comes as night follows day after furlough and other government support has switched off.

“Wildgoose came into the pandemic unprofitable, with a weak balance sheet and declining cash at bank.

“Unfortunately, too many companies entered the pandemic as zombies with unprofitable work in hand and poor future visibility of profit and cash generation.

“Despite unprecedented government support, they are unable to pay suppliers let alone coronavirus loans.”

He warned: “The increasing trend of insolvencies is likely to continue through the remainder of this quarter and into Q1 2022.”

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