M&E firm Phoenix rides out ISG collapse with improved set of numbers

One of the companies which at first seemed to be most affected by the collapse of ISG last year has managed to ride out the storm, according to its latest report and accounts.

M&E contractor Phoenix was listed as being owed more than £20m by the firm’s fit out arm alone, according to a report by administrator Ernst & Young.

But in its accounts for the year to 30 September 2024 – 10 days after ISG formally went into administration – the east London business said the impact of ISG’s implosion had been much less than first feared.

In a note accompanying the accounts, which were signed off six days ago, Phoenix ME said: “The business and the industry faced challenges due to the administration of several companies, notably the high-profile downfall of ISG, a significant client at the time.

“However, the courage and togetherness that define our core values facilitated early re-engagement with end clients on active projects. As a result, the impact of ISG’s administration was minimised. All live projects during administration have since been re-engaged under new contracts with either end users or alternative main contractors. The financial implications have been fully accounted for [in this set of accounts].”

It added: “The reduction in gross margin on the previous year’s financial statements is primarily due to irrecoverable debts from the ISG administration, specifically old retentions and defunct liability period debts from recently completed projects. However, this has only affected the net profit margin, which has reduced by 0.5% to 3.8%.”

It said its forward order book at the start of its new financial year was £520m with turnover for the current year expected to top £350m. “This indicated a positive forecast for the year ending September 2025,” it added.

Turnover in 2024 was up 74% to £295m while pre-tax profit jumped 43% to £10.6m. The average number of employees at the business during the year was up 13% to 473.