Metnor sank into administration in February owing creditors £10m
Collapsed North-east contractor Metnor was felled by rising labour and material costs, the impact of covid-19 and the loss of a key funder, a report from the firm’s administrator has said.
The company, which in its last set of accounts for the year to December 2021 posted an improved turnover of £63m and a pre-tax profit of £942,000, down from £2.4m the year before, sank into administration on 21 February, 20 days after being told a “key funder” was pulling out.
According to an update from FRP Advisory, “while there were significant cash reserves, the company was experiencing cash flow constraints following the decision of a key funder to withdraw future funding on 1 February”.
FRP said it was introduced to the company by its “key funder Stephen Rankin” – who is listed as being one of the firm’s creditors, owed £1.3m. A local rich list table published in 2020, put the wealth of Rankin, who stepped down as a director of Metnor in 2019, and his family at £52m.
Metnor, which was set up in 2002 at Killingworth, just north of Newcastle, specialised in healthcare, student accommodation, residential and leisure work.
FRP said covid hit the firm’s ongoing contracts and revenue streams while “the impact of Brexit and increase in material costs diminished the profitability of ongoing and new contracts, which in some cases led to bidding for new contracts which subsequently operated at a loss”. At the time of its collapse, it had 49 people on its books.
Employees are owed around £90,000, including missing wages and holiday pay, with FRP saying they are likely to be repaid in full while HMRC, owed around £50,000, is also likely to get its missing money back.
And unsecured creditors, owed £10m in total, have been told “there will be sufficient funds available to make a distribution”.
Nearly 20 creditors are owed more than £100,000, the report says, with one trade contractor owed more than £800,000.
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