M&E specialist Michael J Lonsdale goes under

Aaron Morby 2 months ago
Share

London M&E specialist Michael J Lonsdale has collapsed into administration after nearly 40 years in business.

Administrators from Begbie Traynors were formally appointed on Monday to the £250m revenue firm, which employed over 300 staff and many self-employed workers.

It is understood staff are already being laid off.

A letter sent to staff  – reproduced in full below – blamed inflation, shortage of workers, project delays and supply chain disruptions for the firm’s problems.

Chairman Michael Hoodless and managing director Gary Herbert still owed large sums after selling their stakes in the business in 2021 to an Employee Ownership Trust

It also set out that Michael Hoodless and Gary Herbert would be the biggest creditors, still being owed over £50m for the business.

One source told the Enquirer: “There have been rumours about for several weeks that there were problems.

“They have been caught out by the headwinds affecting everybody and more commercial main contractors ”

A former employee said: “My impression when I first joined was they were a company that grew big very quickly and didn’t have the administrative set-up to deal with the growth.”

The firm ranked in the top 10 M&E firm’s nationally and was one of the major M&E management contractors in London working with major commercial clients on large schemes like Broadgate and Battersea Power Station’s redevelopment.

Letter from directors to staff

 

Dear Valued Colleagues,

It is with profound sadness that we must convey the news that the Michael Lonsdale Group /  Michael J Lonsdale Limited has entered into administration as of today, Monday 2nd October 2023.

Since its establishment in 1986, our Company has been a beacon of excellence in the industry.  We have prided ourselves on consistently delivering high-quality services and have enjoyed the privilege of being the preferred M&E contractor for end users, clients, and consultants,  particularly within the London region.

Our enduring success has been founded upon the dedication and expertise of our exceptional  teams.

It has been a truly rewarding experience to witness the growth and development of our younger team members, as well as the introduction of their siblings into our workforce,  all of whom have embraced the culture and values that define our business.

In recent years, we have encountered various challenges, most of which we managed to  navigate successfully. The onset of the COVID-19 pandemic brought about unprecedented  changes, especially within the construction sector. However, through collaborative efforts and  a strong team spirit, we weathered the storm, albeit with a reduced turnover and profit.

Brexit also posed its own set of challenges, particularly in terms of supply chain disruptions,  but we collectively steered through these turbulent times. Unfortunately, the ongoing conflict  in Ukraine has added further strain, with surging inflation, workforce shortages, project  delays, and supply chain disruptions, ultimately culminating in financial difficulties for the  business.

Our credit rating has suffered due to our limited credit with many suppliers, necessitating the  need to make pro-forma payments for goods—a practice that is unsustainable for a business  of our scale, with an annual turnover of £250 million.

The combination of these challenges, coupled with the aggressive commercial tactics  employed by certain general contractors, has regretably led us to this unfortunate situation.

The Board recently made concerted efforts to secure refinancing for the company, but  regrettably, we were unable to obtain the necessary interest from potential investors within the construction industry.

In 2021, we took the step of establishing an Employee Ownership Trust (EOT) for the business,  intending to create a legacy.

Despite receiving inquiries from various institutions, our desire was for all our dedicated staff to share in the benefits, but, regretably, this vision remains unrealised.

We wish to clarify the common belief that both Michael Hoodless and Gary Herbert personally profited from the sale of the business is entirely incorrect. In fact, they will emerge as the largest creditors of the company, with £50 million in outstanding obligations.

We will continue to provide external support for our PAYE staff, assisting you in your claims for redundancy and notice payments. Claims specialists will be available at both our Cowper  Street and Langley locations this afternoon. For those working on-site, you will receive  information at your home address in the coming days, detailing how to proceed with your claim.

We would like to extend our deepest gratitude to each one of you for your unwavering  dedication and contributions to MJL over the years.

Today is an exceptionally difficult and sombre day for all of us. We wish you all the very best for your future endeavours.

With sincere regret and heartfelt wishes.

Gary Herbert, Michael Hoodless, Kevin Feerick, Panny Hadjioannou, Mark Heath, Andy  Shearlaw and Kerry Noblett

 

 

 

 

 

Latest news

Bouygues/Murphy JV confirmed for £2.3bn Thames tunnel job

BMJV clinches 4.2km Lower Thames Crossing road tunnel job
2 days ago

Berkeley keeping close eye on subbies as market softens

Supply chain insolvency now bigger threat than build cost rises
15 hours ago

Roofing firm fined £881,000 after double fall

Court hears of two falls on sites involving same contractor
1 day ago

Plans in for £450m Coventry city centre regeneration

Work is expected to start next summer on City Centre South scheme
15 hours ago

Galliford Try to upgrade Red Arrows base

Contractor seals quartet of RAF base upgrades
15 hours ago

Strabag tunnel drive in Yorkshire sets new world record

Woodsmith potash mine tunnelling project to be included in Guinness World Records
1 day ago

McLaren and Arlington to develop York Central site

Developer deal signed for one of the UK’s largest city centre regeneration schemes
2 days ago

Watkin Jones plans 36-storey Glasgow tower

The Ard student rooms scheme will be Glasgow's second tallest building
2 days ago

Balfour Beatty on track for solid set of results

Country's largest contractor on course to meet financial targets
2 days ago

Brymor Group Southern heads for CVA

Hampshire builder applies for Company Voluntary Arrangement with its creditors.
2 days ago

Former Costain transport chief joins Aecom

Sue Kershaw takes up US-based vice president job with consultant
2 days ago

Industry’s best construction managers revealed

More than 80 now in the running for delayed awards: Full list
2 days ago

Materials prices plummet as housing demand slumps

Buyers report biggest fall in purchasing costs for 14 years
3 days ago

Welsh contractor Andrew Scott targets £90m turnover

Profit and revenue up at Port Talbot-based civils and building firm
3 days ago

M-AR buyer starts round of redundancies

30 jobs at risk after modular firm bought out of administration
3 days ago

First HS2 viaduct completes deck beam installation

EKFB completes beams for first of project's 50 major viaducts
3 days ago

Fatal accident at Laing O’Rourke Oxford site

Work suspended on site after tragedy
4 days ago

Homes lead the way as Bancon Group boosts turnover

Homes and contracting group looking to further growth in 2024
3 days ago

L&G Modular Homes scheme replaced by traditional build

Wolverhampton council chooses new partner and build method for £150m project
3 days ago

£33m Plymouth city centre homes scheme approved

Spring start for Bath Street scheme in Millbay regeneration area
3 days ago

Balfour renews £330m Lincolnshire highways deal

Firm will use its new operational control hub to promptly address network issues
4 days ago

Three Caledonian Modular-built schools to be demolished

DfE confirms Essex, Somerset and Northampton schools will be bulldozed and rebuilt
4 days ago

Gilbert-Ash takes £30m Tate Liverpool revamp

Work to start in the New Year on remodelling of iconic 1846 warehouse
4 days ago

HS2 Solihull mass transit enabling works out to bid

Bidding for £60m main works to start early next year
4 days ago

Modular health specialist Vanguard rescues M-AR

Deal with administrators sees Vanguard add production capacity with 100,00 sq ft offsite factory
4 days ago

Torsion forms JV to build £90m Leeds resi tower

Construction to start in January on one of Leeds' tallest towers
4 days ago

Approved change to concrete ‘recipe’ to slash carbon emissions

New approved concrete mixes will be able to blend finely ground limestone and fly ash
5 days ago

Network Rail unveils Cardiff South Central masterplan

Plans being drawn up for major housing-led mixed-use scheme
4 days ago

McLaren Living to revamp Watford police station site

Developer to submit plans for a major mixed-use development
4 days ago

National Grid £12.8bn HV civils framework hits market

Firms needed for major power line links and high voltage direct current converter stations
5 days ago

Contractor services