Spiralling costs on jobs fell Newcastle firm with loss of 80 jobs

Newcastle contractor Metnor Construction has formally collapsed into administration with the loss of 80 jobs.

Staff at the 21-year-old business were axed before the appointment of FRP Advisory was rubber-stamped yesterday (Tuesday).

In its last of results, for the year to December 2021, the firm reported a 30% rise in turnover to close to £63m after 2020’s figure was hit by the impact of covid-19 and lockdowns.

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Metnor returned to profit in 2021, according to its most recently filed report and accounts

The firm returned to the black during the period, posting a pre-tax profit of £942,000 from a £2.4m loss the year before. The amount of cash it had in the bank at the end of the year was £3.5m, down from £5m.

And in a note accompanying the accounts, signed off last August, the firm painted a rosy picture of the upcoming period pointing out that a “strong pipeline” of work meant “the order book focus is now on 2023 and beyond and prospects are extremely positive”.

But earlier this week administrators from FRP were called in with joint administrator Steve Ross saying the firm was caught out by steepling price rises on its jobs.

He added: “Rapid inflation is causing havoc on the profit margins of businesses across the economy. Metnor Construction […] wasn’t immune to the impact of rising costs, which ultimately led to its insolvency.”

The firm carried out work in healthcare, hotel and leisure and student accommodation sectors.

Last week, another North-east builder, £200m turnover, Gateshead-based contractor Tolent, sank into administration with the loss of more than 300 jobs.

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