ICSM News: With days before Christmas a Devon construction firm collapses owing £73 million pounds, blaming rising interest rates creating “difficult trading conditions”
By Harry Mottram: Exeter based Burrington Estates is to cease trading following a £14 million pound loss in what it describes as a managed shut down – but leaving creditors and lenders with £73 million unpaid. The firm will also make its 70 full time staff redundant just two weeks before Christmas along with the termination of work for scores of contractors and self employed tradesmen and women.
Ian Carrotte of ICSM said this was a blow to the South West’s construction industry as the market contracted due to hikes in interest rates, a rise in inflation and the effects of the Cost of Living Crisis hitting consumer demand. Bizarrely the directors of the business also blamed the war in Ukraine on the demise of the Devonshire building company.
Writing for Devon Live, the Reach owned news website Business Editor William Telford reported: “South West new homes builder Burrington Estates is to cease trading after making a £14m pre-tax loss. The Exeter-headquartered company, which builds and sells houses across the West Country and Midlands, will complete the projects it is working on, sell off undeveloped sites and wind up the business. Directors blamed “increasingly difficult trading conditions” and an uncertain UK housing market, partly fuelled by rising interest rates. They also put the blame on the cost-of-living crisis and the war in Ukraine. The new homes element of Burrington Estates is set to cease trading but the wider Burrington Estates Group, however, is unaffected, including the company's interest in Exeter's Winslade Park.”
Burrington’s David Jervis, said: “After looking at a range of options for the future of the business, including its ownership and markets, the directors reluctantly agreed in 2023 that the business would complete its committed project to its recognised high standard and would thereafter cease trading and commence an orderly wind down of the business. The directors would like to thank all its customers, supply chain, staff and funders for their continued support during this period.”
Burrington Estates joins a list of firms in the sector that have hit the buffers in the last 24 months that includes Midas Group Ltd, Henry W Pollard and Sons Ltd and Brady Construction Services Ltd. Previously of course the largest collapse in the industry was Carillion that owed billions of pounds in 2018 leaving 30,000 out of work and a scandal over its auditing.
Ian Carrotte of ICSM said it was interesting that the accounts for January 2021 to June 2022 showed that Burrington Estates set up in 2011 only sold 36 properties with a turnover of £29,522, but with a loss of £9,031,000 and a pre-tax loss of £14,345,000. He said: “With figures like this the writing was on the wall and it is no surprise the firm was in trouble.”
++++++++++++++++++++++++++++++++
ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com
