Worried councils ask government to step in over Midas

Leaders of three councils in the South-west have written to Michael Gove asking for his help to save Midas from sinking into administration.

Last week, the contractor confirmed it had filed a notice of intention to appoint an administrator – but said it was looking to save the business from collapse.

The Exeter-based firm, set up in 1976, said it had filed the notice 10 days ago for Midas Group, Midas Construction and Mi-Space (UK), its property maintenance business.

The firm has previously said the impact of the covid-19 pandemic hit its latest financial figures which in the 18 months to October 2020 show it made a made a pre-tax loss of £2.4m on turnover of £291m and in the 18 months. According to its last set of accounts, Midas employs 500 people.

According to the BBC, the Liberal Democrat leaders of Torbay, Teignbridge and North Devon Councils have written to the levelling up secretary asking for his help.

The leader of Torbay Council said Midas’s implosion could “significantly impact on thousands of jobs and businesses in the South-west”.

Councillor Steve Darling said Gove “must step in to stop this engine of regeneration from collapsing and sending the South-west’s economy in to reverse”.

Of the administration notice, Midas said: “This does not mean that Midas has entered into administration and the company continues to operate, while the directors work to explore all available options to achieve the best outcome for the business and our people, our customers, supply chain partners and all our stakeholders.

“Midas is committed to pursuing an outcome that will achieve continuity for our live contracts and asks all our valued stakeholders to remain supportive of the group at this time.”

Worries surfaced about the firm’s future after reports last month that work on three hotel schemes in Devon worth around £40m had stopped.

Filings at Companies House show that Midas director Michael Hocking stepped down four days before Christmas with the 71-year-old being described as “a person with significant control” in a further filing made last month.

Hocking was made a director of Midas Group in 1998 and, along with chairman Steve Hindley, helped lead a management buy-in that year from Midas founder Len Lewis.

The number of insolvencies among construction firm was up 25% according to the latest figures and John Bell, senior partner at Clarke Bell Insolvency Practitioners in Manchester, said: “The sector is being hit by numerous issues including rising raw material prices, supply chain disruptions, historic debts built up during the pandemic, labour shortages and being tied to fixed-price contracts while the rate of inflation is rising.

“It is the combination of these difficult factors that is leading to so many construction companies going insolvent and being liquidated.”