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Tuesday, 15 November 2011

Compulsory liquidations up in the construction sector

According to the Insolvency Service, the number of construction businesses that have been wound up by the courts  has increased by 24% with 244 construction companies entering compulsory liquidation in the third quarter of this year.

There have been almost 1000 construction companies going out of business in the past three months.
The number of construction companies entering administration has risen from 85 to 94 representing a 10.5% over the last three months and this is up 38% from last year, while construction companies taking out company voluntary arrangements were up 30% quarter on quarter and were up 50% compared to the same quarter last year.

Recently there has been a flurry of construction companies closing down such as Holloway White Allom and Linford Construction.  Despite an upturn in construction activity many contracts are being won on negative margins.  As such the sector has difficult times ahead.

We have rescued a number of building companies over the years by using company voluntary arrangements.  Read our CVA case study

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