Published by Construction Enquirer
CREATE CONSTRUCTION COLLAPSED OWING £10M TO SUPPLIERS
Blackpool based contractor Create Construction owed more than £10m to subcontractors and suppliers when it went under.
An administrator’s report filed at Companies House revealed total debts of £11.6m to unsecured creditors including £10.4m to hundreds of firms in the supply chain.
Administrator RSM took charge of the £93m turnover business last October following a period of rapid expansion nationally focused on the student accommodation, private rental and hotel sectors.
Other companies within the Create group -the developments, homes and interiors arms – are unaffected by the administration.
RSM said: “Certain regional projects continued to remain profitable, however a number of national projects around the UK started to incur significant losses.
“Management’s lack of experience and knowledge of subcontractor expertise in the national sector led to the company paying a premium price for subcontractor services, which in turn caused the company’s profit margin to fall.”
The company was also hit by Covid shutdowns and supply chain failures leading to project delays and liquidated damages claims.
RSM added: “In the same period the company was also severely impacted by the increased cost of supplies and subcontract labour and the company’s inability to pass these on to customers.”
At the time of the administration only two of Create’s contracts had not been terminated.
A job for Hampton by Hilton in Blackpool is being novated to a new company HBH Construction Ltd where former create CEO Paul Mathison is a director.