Restructuring specialist RSM expected to take over running of company set up in 1966
Familiar problems of rocketing inflation, subcontractors going bust and jobs being put on hold are being blamed after historic industry name Geoffrey Osborne said it was preparing to appoint an administrator.
The firm, set up by its eponymous founder in 1966, confirmed that restructuring specialist RSM has been working with the business in an attempt to keep it afloat.
But in a statement this morning, the company said: “Geoffrey Osborne Limited has announced its intention to appoint administrators. The decision was reached after an 18 month programme to restructure the firm to focus on the core construction business and following an extensive effort to secure new investment into the business.” Staff are continuing to be paid until the official appointment of an administrator, Building understands.
Osborne, which has a turnover of around £90m and employs close to 90 people, has been paring back its business in the last few years as part of a restructuring.
It sold its £200m infrastructure division, which operated in the roads and rail market, to private equity in September 2021.
And last autumn, it sold Osborne Property Services Limited, which was set up in 2006 and employed around 230 people, to social housing maintenance specialist Cardo Group for an undisclosed sum. Six months earlier it offloaded its Innovaré offsite business, which employed 115 people, to Bowmer & Kirkland, also for an undisclosed sum.
Osborne said: “The proceeds of all three sales have been reinvested into the construction business, which has continued to deliver projects in London and the South-east. Regrettably, despite a substantive improvement in performance, the residual losses on legacy projects have undermined performance which has impacted on the ability to win new work.”
Building understands that RSM worked on the Innovaré deal and has been working on a restructuring at Osborne for some time now with options looked at including a CVA – where the company agrees a deal with creditors to pay back money owed over a certain timeframe.
But this option has been ditched in favour of a likely administration with RSM understood to be on the verge of being appointed administrator in the next few days.
Osborne, which recently completed an office scheme at Moorgate, has around eight live jobs mostly in the public sector. Several firms are understood to be looking at picking up some of these scheme and Osborne added: “The company with its advisors are currently working with interested parties with the ambition that aspects of the business will be sold and will continue to trade. Negotiations are ongoing.”
But Building understands three jobs, worth a combined £90m and two of which are in the public sector, have been held up by clients at the second stage as Osborne and its clients struggled to agree a price.
In its statement, Osborne added: “Osborne has faced significant headwinds common to the entire construction sector over the past two years, fuelled by high inflation, the lingering impacts of covid-19 and Brexit and a slowdown in public sector procurement.”
As well as offloading parts of its business, the firm has also rejigged its senior leadership in the past few years with Andy Steele leaving in October 2021, which saw him replaced by former Wates COO Dave Smith as interim boss. He was then replaced by Mark Hoyland, a former boss of social housing firm Orbit, but he only lasted a few months before Smith, who had stayed on in a non-executive role, was brought back to the top job last spring.
Osborne family member Andrew Osborne has been chairman since 2012 and in a statement, he said: “Osborne has built and maintained £10bn of the nation’s infrastructure during 58 years of trading, working on homes, schools, hospitals, universities, retail and more. None of it would have been possible without our people, customers and supply chain. I thank each and every one of them.”
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