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HVAC supply chain braces for bad news after Clugston administration

Construction group falls into administration, leaving HVAC supply chain fearing further risk of losses

Construction-to-FM group Clugston has called in KPMG as administrator in a move that surprised many in the industry and left the HVAC supply chain braced for news of unpaid debts.

While alarm bells rang at the fact that the group had not filed full 2018 accounts at Companies House, the fact that it was posting a revenue 49 per cent up to £176 million in the year to January 2018 was seen as sign of its ability to bounce back and in August 2018, the group reported it had ’made real progress in building the foundations for sustainable growth and profitiability,’  However, the construction division posted a pre-tax loss of £0.5m in the year and in its accounts reported ’product and quality difficulties on several projects’ which it blamed on quality problems in the supply chain.

Clugston Construction has a division which designs and builds commercial buildings, offering its own M&E services and bringing it into collaboration with HVAC suppliers. It is also heavily involved with building Energy Centres, often requiring CHP installation.

The administration has again emphasised the problems with payment in construction and their impact on the supply chain, particularly if the contractor has witheld retentions from its subcontractors. It is estimated that the average contractor has £27,500 of its money held in retentions.

 

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