Tolent sinks into administration with loss of over 300 jobs

Gateshead-based firm Tolent has collapsed into administration after 40 years of business with over 300 staff made redundant.

James Lumb and Howard Smith from Interpath Advisory were appointed joint administrators to Tolent plc and five of its operating subsidiaries this afternoon, Interpath said.

The administrator said 313 staff have already lost their jobs with the remaining 91 kept on “to assist them whilst they explore any possibility of a sale of the businesses and their assets”.

Interpath said Tolent, which was one of the country’s best-known regional contractors also had offices in Leeds, Stockton-on-Tees and Shotton Colliery, had faced significant challenges in recent years including “rising costs of raw materials, supply chain issues, material and labour shortages and the collapse of a number of developers, contractors and supply chain partners”.

It added: “Against this difficult backdrop, one of Tolent’s major contracts – the £85.5m Milburngate development in Durham – became significantly loss-making, which had a profound impact on the companies’ working capital.

“In recent months, the directors of the group have worked extensively to explore options to safeguard the future of the business but with a solvent solution unable to be secured, they took the difficult decision to place the companies into administration.”

Lumb said: “The group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its supply chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.

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“Following the tapering off of the government’s covid support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector. This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.

“Additionally, after the annual Christmas shutdowns and a cold December, the months of January and February often bring with them a painful cash crunch. In a sector which typically operates on wafer-thin margins, this can often prove to be insurmountable and, unfortunately, so has been the case for Tolent.”

As well as Tolent plc, the other firms put into administration include its construction and homes business as well as Ravensworth Properties Limited, supported living business Tolent Living Limited and asbestos removal specialist Tolent Solutions Limited.

Lumb added: “Our priority in the coming days is to work with key stakeholders to assess options for each of the companies, including options for ongoing contracts and live projects.”

In its last set of accounts filed at Companies House, Tolent said it racked up a £4.4m pre-tax loss in 2021 which was narrowed from the £8.5m loss it posted in 2020. Turnover was up to £198m from £185m.

The firm was founded in 1983 and had a first year turnover of £300,000. In 2000, income hit £111m and three years ago the firm, which was led by chief executive Paul Webster, who joined as a project manager in 1998, and included former Severfield chief executive Ian Lawson as a non-exec director, helped build a temporary NHS Nightingale Hospital in Sunderlan