Shaylor Group off-loaded the division to a restructuring specialist a month ago and blames ‘cut-throat’ market
The former contracting arm of Shaylor Group has filed for administration, after Shaylor bosses sold the division to restructuring specialist RCapital a month ago.
Shaylor Group finance director Gary Turley told Building the company had offloaded the division to exit the “contentious” contracting market.
He said increased competition from national contractors and cut-throat bidding had forced the move.
“It was a [contracting] market where many of the national contractors were competing and were bidding at sub-economic prices,” he said.
Shaylor Group’s contracting arm accounted for £27m – or half – of the group’s £45m turnover for the year ended 31 March 2011.
Turley said the Midlands-based group had always intended to “shrink” the contracting business and said the division had no live projects at the time of its sale.
Shaylor has retained its specialist Interiors, Repair and Maintenance and Special Projects divisions.
Turley said growth in the firm’s remaining divisions helped the company grow turnover to around £55m for the year ended 31 March 2012, despite the sale of its contracting arm. These set of accounts have not yet been filed with Companies House.
Turley said no jobs had been lost as a result of the sale of its contracting division, as all staff were employed direct by the group and were transferred to other parts of the business.
He said the prospect of a “number of adjudications and litigations” involving the contracting arm was “one of the reasons we had to take this course of action”.
Turley said the move reflected the poor state of the UK contracting market.
He said: “Margins [in contracting] are very poor. You have to have a niche to try and improve your margins.
“If you are making one or two per cent only a few digits movement makes a difference.
He added: “We are confident about the future and no staff have been effected.”
RCapital renamed the contracting division to Thorts Ltd prior to filing for administration.
London’s companies court confirmed that the directors of Thorts had filed for administration.
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