The family-owned Shepherd Group is still counting the cost of legacy construction arm activities six years after selling the construction business to Wates.

According to latest accounts for the Shepherd Group, which now primarily covers the activities of the Portakabin business, obligations on previously completed projects by Shepherd Construction are still costing the group dearly.

This rump of the group recorded a £31m loss last year relating to the completion of a retail and residential complex in Colindale, North London and significant additional provisions in relation to claims on completed contracts where there remains uncertainty about the outcome.

The firm said it had been notified of some latent defect claims, including significant claims relating to items arising on historic building design issues, particularly in relation to cladding design and other fore safety issues.

Shepherd Construction pre-tax losses202020192018201720162015*-£31.3m-£21.4m-£13.8m-£31.7m-£9.7m-£60.6m*Shepherd Construction sold on 30 September 2015 to Wates. Liabilities retained by group

The company no longer trades construction contracts and the accounts were not prepared on an ongoing concern basis.

Overall the group recorded a £49m profit, up from £45m on revenue slightly ahead at £348m.

During the year the modular and portable building arm increased profit by 27% to £81m.

Did you miss our previous article…
https://www.thegraduatemag.com/?p=353

HS2 is supporting over 20,000 construction jobs just one year on from the formal start of construction on phase one from London to the West Midlands.

The latest official employment figures reveal how fast the infrastructure project has geared up having continued throughout the covid-19 pandemic.

Contracts have already been awarded to over 2,200 businesses. A further £25bn worth of opportunities are expected to flow out into the wider supply chain over the coming years.

Budget so far

About £11bn (actual prices) has been spent so far, including land and property provisions. Around £12.6bn (2019 prices) has additionally been contracted, with the remaining amount yet to be awarded.

The overall budget for phase one, including Euston, is nearly £44.6bn (2019 prices). This is composed of the target cost of £40.3bn and Government-held £4.3bn contingency. The target cost includes a contingency delegated to HS2 of £5.6bn for managing the risk and uncertainties that are an inherent part of delivering major projects.

HS2 measures to upskill local people who are out of work with the training and accreditation have provide 1,100  formerly unemployed with long-term jobs.

Aerial view of HS2’s Chiltern Tunnel South Portal in Hertfordshire

This number is expected to increase in the months and years ahead as the pace of major construction work increases and HS2’s journey extends north.

Mark Thurston, chief executive of HS2, said: “We’re enormously proud of the progress we’ve made on HS2 since the Prime Minister gave us the go-ahead last year, and despite the challenges of the pandemic.

“We’ve already launched our first two tunnelling machines, with more to launch in the coming months, and construction of our stations and depots are well underway.”

“HS2 is moving forward, creating jobs, enhancing skills, benefiting UK businesses and building a low carbon, high capacity railway that will change the way we travel in Britain.”

Progress at the first of the 10-mile long Chilterns tunnel drives

Did you miss our previous article…
https://www.thegraduatemag.com/?p=351

Attempts have failed to find a buyer to run collapsed steelwork contractor Cleveland Bridge UK as a going concern.

Administrators from insolvency practice FRP have given up hope of salvaging the business and today announced they will now proceed with a property and assets sale leading to the liquidation of the historic bridge builder.

Redundancies will also now start among the remaining 133 staff as resumed production winds down altogether over two weeks.

FRP said 104 staff were currently working on site, while a further 29 employees were furloughed.

Administrators had always been hopeful of finding a buyer to save the business, which collpased on 22 July.

On 9 August, production was restarted after terms were agreed with customers, giving the remaining workforce a glimmer of hope that their jobs could be saved.

But despite talks with several interested parties from across the globe, seven weeks of searching and talks ultimately proved fruitless.

Martyn Pullin, Partner at FRP, said: “We have worked tirelessly in the hope of finding a buyer who would continue to operate Cleveland Bridge as a going concern, running a thorough and extensive sales process.

“However, with no current viable offers remaining to take the business on, we must now prepare for a property and asset sale.

“Regrettably, production will finally end on site later this month. Our specialist employment team will continue to work closely with the staff, their representatives, Unions and the council to support all the workers through what we know has been an extremely challenging time.”

Did you miss our previous article…
https://www.thegraduatemag.com/?p=340

Building services provider J S Wright has secured a £6m contract to help turn a derelict canal-side site in Birmingham into a quality residential-led development.

The mechanical and electrical specialist, which is based Aston and has an office in London, will install the mechanical infrastructure services and fit out all 650 apartments at the 117-acre Soho Wharf scheme at Soho Loop on the city’s Main Line Canal, opposite Birmingham City Hospital.

The £165m regeneration project is being driven by joint venture partners Galliard Homes and Apsley House Capital with the aim of transforming the former industrial site to attractive new apartments and townhouses, commercial space, and parks and gardens.

J S Wright will install a boosted cold-water plantroom with distribution pipework to all six blocks on the development, which will range from six to 14 storeys including retail and parking space.

In addition, the shell and core works involve installing soil and wastewater services, internal rainwater services, and dry risers for firefighting.

The company will also fit out all the one and two-bedroom apartments on the scheme with hot and cold-water services as well as soil and waste services.

The contract package for the apartments also includes installing domestic sprinklers and both heat recovery and extract ventilation systems.

Work has already commenced on the project with completion scheduled for summer 2023

Phil Leech, Managing Director of J S Wright, said: “With Birmingham undergoing a similar regeneration to London, it is a testament to our expertise that we have been appointed yet again to help deliver many more quality apartments in our home city.”

Did you miss our previous article…
https://www.thegraduatemag.com/?p=335

A married couple of construction directors from Telford have been banned for nine years each after diverting over £124,000 away from creditors.

Jane Thornton, 54, and Norman Thornton, 65, were both directors of the construction company Norjan (Properties) Limited, which went into liquidation in July 2020 with liabilities of over £411,000.

The Liquidator discovered that Norjan had informed its major client to direct payments into a new bank account from January 2020. This account belonged to a third party and over £124,000 was paid into it between February 2020 and April 2020.

The subsequent Insolvency Service investigation also established that the company had been trading while insolvent from at least 31 July 2017, and had an outstanding County Court Judgement of nearly £34,500.

Both Jane and Norman Thornton accepted that by diverting funds to the new account, they left the business unable to repay its creditors.

The Secretary of State accepted signed undertakings from both directors on 19 August 2021. Their disqualifications are effective from 9 September 2021 and last for 9 years each.

The pair cannot, directly or indirectly, be involved in the promotion, formation or management of a company without the permission of the court.

Nina Cassar, Chief Investigator for the Insolvency Service, said: “In December 2019, Mr Thornton told bailiffs that Norjan (Properties) Limited didn’t have any funds to pay its debts. Then, with knowledge of the financial position, over £124,000 was placed out of the reach of creditors.

“This ban should serve as a warning to other directors that you have a duty to your creditors. If you neglect this duty, you could be investigated by the Insolvency Service and lose the privilege of limited liability trading.”

Did you miss our previous article…
https://www.thegraduatemag.com/?p=322

Vital Energi has been awarded a contract by the City of London Corporation to guarantee energy savings of over £480,000 a year and annual carbon savings of over 1,000 tonnes.

The project will be delivered through the Greater London Authority’s Retrofit Accelerator framework designed to help make London’s non-domestic public buildings and assets more energy efficient, and the works will to be funded via the Public Sector Decarbonisation Scheme (PSDS).

Vital Energi will deliver multi-technology solutions through Energy Conservation Measures, which will improve energy performance within five of the City’s most iconic buildings, including the Barbican Centre, Guildhall School of Music and Drama, and the City Corporation’s Guildhall headquarters.

Energy Conservation Measures will include pipe distribution repairs, ventilation distribution repairs, pipe insulation, Air Handling Unit EC fan retrofit, LED lighting, and metering, to reduce energy use, unnecessary heat loss and help improve comfort conditions for building users.

As well as upgrading and optimising Building Management Systems (BMS), Vital Energi will also install Vital View, which is a BMS performance monitoring system. This will help deliver continuous improvement and drive energy efficiency, carbon reduction and help enhance future projects through gaining a detailed understanding of building operations and usage characteristics.

Rob Callaghan, Managing Director of Vital Energi for the London and Southern Division, said: “Vital Energi employ a talented team of designers, engineers and financial model specialists to deliver clients real carbon savings through commercially viable solutions in terms of payback against capital spend. We don’t just do the work and hand back the building, each year we will monitor and verify the savings.

“We are delighted that the City of London Corporation has appointed us as its contractor of choice to carry out these essential works which will help decarbonise its corporate estate and build a robust zero carbon roadmap.”

City of London Corporation Finance Committee Chairman, Jamie Ingham Clark, said: “This partnership with Vital Energi will enable us to take practical, positive, sustainable steps to make our buildings more energy efficient, delivering the twin benefits of reducing carbon emissions and saving money.

“The project will play a significant role in enabling us to achieve the ambitious targets set out in our Climate Action Strategy, which commits us to achieving net zero carbon status in our buildings by 2027 and across our investments and supply chain by 2040.”

Buckingham Group Contracting has become the biggest contractor to transfer equity to an employee ownership trust.

To mark the move to employee-ownership 530 eligible staff received a celebratory £1,000 tax free bonus.

At the same time, founders Paul Wheeler and Patricia Wheeler, and long-standing group stadia director and partner Kevin Underwood all retire from the board in the ownership transfer deal.

Long-term partners former CEO Mike Kempley and COO Tim Brown have been promoted chairman and deputy chairman, and are committed to stay with the business for 5-years and 2-years respectively.

Board of directors making up new senior leadership team

Ian McSeveney – Group Managing Director – Director since 2014Simon Walkley – Deputy Group Managing Director – Director since 2014Andrew Kerr – Group Financial Director – Director since 2018Richard Plant – Group Commercial Director – Director since January 2020>

Wheeler said: “Back in 1987 when the company was first incorporated, I never dreamt that the business, which was originally known as ‘Buckingham Plant Hire Contracting Limited’ would ever accomplish such remarkable achievements.

“With growing annual sales revenues nudging £700m for 2021, the business has attained the status of being a large corporate, widely recognised for delivering top quality projects and has become consistently established within the ‘Top Twenty’ private construction contractors in the UK.

“None of this would have been possible without the commitment, skills and dedication of our staff members, our management teams and everyone working in departments across the whole business.”

“In recognizing the amazing results that are now being achieved more than 30-years later, it is wholly appropriate that ownership of the business is being handed down from its founding partners to an all-embracing model of common ownership under the newly established Employee Ownership Trust.”

Kerr said: “There is no debt funding involved in the transaction, with a prudent initial payment to the selling owners coming from surplus reserves.

“Consequently, year-end net assets will remain robust at around £37m in 2021, close to the position in December 2019.

“The former owners are not motivated by a quick payment timeframe that might undermine the financial strength of the company in any way.

“Instead, they want to see the business remain financially strong to secure its lasting success.”

The Trust will be represented by a corporate trustee: BGC Trustee Ltd, led by independent chairman Russell Field. The Trustee Board also comprises two member directors balanced with two employee directors.

The EOT will always retain a minimum 60% equity in Buckingham, allowing for future issue of growth shares.

Employee Ownership Trust

An EOT is a special form of employee benefit trust introduced by the Government in September 2014 in an attempt to encourage more shareholders to set up a corporate structure similar to the John Lewis model.

The aim is to facilitate wider employee-ownership, albeit via an indirect holding company.

Shareholders selling their business to their employees are also crucially not liable for capital gains tax.

EOT controlled companies are also able to pay income tax-free bonuses of up to £3,600 per year to staff.

Data suggests that employee-owned businesses drive corporate performance with higher productivity, profitability and greater levels of innovations.

Did you miss our previous article…
https://www.thegraduatemag.com/?p=301