One firm owed £4.5m as Buckingham supply chain hit for over £108m

The supply chain of collapsed contractor Buckingham is owed more than £108m, the firm’s administrator has said.

Nearly 20 firms are due more than £1m each with two companies both owed more than £4m each – with the largest due to a cladding specialist which is out of pocket by £4.5m. Hundreds of unsecured creditors have been told not to expect any money back.

In an update on the contractor’s implosion last month, administrator Grant Thornton said Buckingham was hobbled by “significant and increasing losses” on several sport and leisure schemes, thought to includes its jobs to build new stands for Premier League sides Liverpool and Fulham, which it put down to “inflationary pressures”.

It added that it was also felled by losses on a civils scheme, which Buckingham had previously said was in Coventry, as well as delays on contracts and problems on recovering “significant” work in progress balances.

And it said the timing of Buckingham’s payment runs was also a factor in its collapse with large supplier and subcontractor payments due in the middle of the month – but receipts were usually brought in at the end of the month, meaning the “losses placed pressure on the cashflow of the business”.

The report said HMRC rejected a so-called TTP proposal – known as a time to pay agreement – in August, a month after Buckingham’s invoice finance facility – a £20m debt finance package agreed last year – had dwindled down to zero.

It added: “This and increasing creditor pressure, due to not being able to meet the full supplier/subcontractor payment run, resulted in Grant Thornton being engaged by [Buckingham] on 16 August to explore a sale of the business and assets and undertake planning for a potential appointment of administrators.”

Specialist money recovery firm Leslie Keats said Buckingham’s contracts have a book value of £147m which covers 325 contracts and accounts, 52 of which were still live at the time of the firm’s collapse. The £147m includes book debts, work in progress and retentions.

At the time of its collapse Buckingham, which in its last set of accounts had a turnover of £665m in the year to December 2021, had just £4.98m in its current account with bank HSBC.

Grant Thornton said Buckingham’s 489 employees made redundant by the collapse were owed £1.4m in missing wages and holiday pay. It said this money was expected to be paid in full while secondary preferential creditors, which include HMRC and who are owed £25m, will get some money back “however it is currently uncertain whether this will be paid in full”.

Last month Kier paid £9.6m for the firm’s rail arm, saving the jobs of 180 people.