Blair Nimmo, Tony Friar and Stuart Irwin of KPMG have been appointed as joint administrators of Vaughan Engineering Ltd (VEL), which was a supplier to collapsed outsourcing company Carillion and has now ceased trading with the loss of over 150 jobs
Established in 1955, VEL is a leading mechanical and electrical building services engineering contractor specialising in commercial, industrial and building refurbishment contracts.
The firm, which has a base in Broxburn, West Lothian and also operates from sites in Newcastle and Warrington, is a subsidiary of the wider Vaughan Engineering group based in Belfast. The wider group continues to trade as normal under the control of its directors.
VEL’s turnover in the year to 31 March 2016 was of £50m, with the majority of revenue relating to contracts with a small number of blue chip contractors and customers in Scotland and the north of England. However, difficult market trading conditions coupled with a number of disputed contracts and write-downs over the course of 2016 / 2017, resulted in net turnover falling to £38m and VEL incurring a net loss of £2.4m in the year to 31 March 2017.
Reports in the construction press suggest the company was owed £600,000 by Carillion for work it had already completed, and had been contracted for a further £1.1m in projects.
VEL employed 154 employees; 83 at its base in Broxburn, 43 in Newcastle and 28 in Warrington. A small number of staff have been retained across the three offices in the short term to assist with the Company’s contracts. All other staff have been made redundant.
Blair Nimmo, joint administrator and global head of restructuring for KPMG, said: ‘Unfortunately, while VEL was a leading company in its field, the business was unable to continue trading in light of cash flow and recent events within the challenging construction sector.
‘As a result of the difficult financial position facing the company, we had no choice but to make the vast majority of employees redundant. We will be working with all affected employees and relevant government agencies to ensure a full range of support is available. ‘We will also be exploring the possibility of securing a sale of the company’s assets and contract novation’s and would encourage any interested parties to contact us as soon as possible.’
Report by Pat Sweet
