More than 200 people lost their job immediately after housebuilding Stewart Milne Group plunged into administration on Monday night.
The construction company said it had faced “significant challenges” since Covid, reports the BBC. An attempt by owner Stewart Milne to sell the Scottish company fell through last year.
Now administrator Teneo confirmed 217 jobs would be axed with hundreds of sub-contractors set to be hit. Six of the firm’s subsidiaries have also been placed into administration – Stewart Milne North West however has not.
Sub-contractors have reportedly been told not to return to the company’s sites. And Teneo says it is “exploring its options” when it comes to the firm’s unfinished sites.
Buyers who have purchased a Stewart Milne Group house have reportedly not yet been contacted. While current residents with outstanding works are asked to contact the SMHomeowners@teneo.com for further information.
Adele MacLeod of Teneo said: “The downturn in the UK housing market combined with an extensive sales process not resulting in any viable offers has ultimately led to the need for the directors to place Stewart Milne Group Limited and some of its subsidiaries into administration, regretfully with some immediate redundancies.
“We continue to assess all the options in respect of the group’s Scottish development sites and encourage any party with an interest to get in touch.”
Stewart Milne Group operates across north east and central Scotland and north west England. When he put the business up for sale in 2022, Stewart Milne confirmed his intention to retire.
The company recorded pre-tax profits of £16.5m for the year to the end of October 2022. Turnover however fell by £48.7m to £172.4m year-on-year as house sales dropped by 30%.
A spokeswoman for Lloyds Banking Group stated that they had attempted to find a solution that would place the business on a “sounder financial footing” and avoid insolvency.
She added: “Unfortunately, despite several years of support and forbearance, including multiple maturity extensions to the borrowing, this has not been possible in this instance.”
It is understood 54 employees had been retained to assist in the administration process. While a further 58 people had been kept on to work on the north-west England branch.
Stewart Milne, 73, told the BBC: “I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it.
“I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safe-guarding hundreds of jobs and protecting livelihoods.”
