Administrator says 150 jobs have gone at collapsed Clugston

Administrators to Clugston, the Scunthorpe-based contractor which collapsed yesterday, have announced 150 jobs have gone at the firm.

According to James Clark and Howard Smith from KPMG’s restructuring practice, Clugston Group, its construction arm and its services operation “suffered as a result of losses on a number of large and complex energy from waste contracts, accentuated by the insolvency of a key subcontractor.”

A KPMG spokesperson confirmed this company was Sheffield firm LX Engineering (North) which went into administration in June.

The administrators’ statement added: “Despite negotiations with key stakeholders to resolve issues caused by the losses, mounting pressures on the business have caused the directors to seek the appointment of administrators.

“Regrettably, 150 of the companies’ 412 employees have been made redundant.”

Clugston was working on a number of energy from waste projects, notably with recycling specialist Viridor in Avonmouth. Clugston Group’s short-term debts rose 65% in 2018 to £54m.

KPMG’s Clark said: “The directors of the business have worked tirelessly trying to rescue the group and have pursued discussions with a key stakeholder about a potential rescue deal. Unfortunately, it has not been possible to obtain the funding required, and as a result, the directors concluded they needed to appoint administrators to protect the value of business.

“Our focus over the coming days will be to seek buyers for the contracts and divisions, and to liaise with those employees who have been made redundant, ensuring they are provided with the support and information they need to claim their statutory entitlements from the Redundancy Payments Office.”

The Civil Engineering Contractors Association has offered to help those employees who have lost their job at Clugston find other work in the area.

KPMG said Clugston’s haulage arm Clugston Distribution Services Limited and property business Clugston Estates Limited were not affected by the administration and were continuing to trade under the control of their directors.