One of the largest independent plant hire firms has entered administration, two months after it said the collapse of Carillion had caused it disruption.
Restructuring firm EY was appointed to Shropshire-based Hawk Plant (UK) on Monday (14 January), as well as to subsidiary businesses Hawk Plant Hire, Hawk Hire, Safety and Training, Hawk Plant and Hawk Plant Sales.
On appointment, the administrators made 83 of the group 420 staff redundant.
Its last set of accounts, for the year ending 31 December 2017, showed that it had a turnover of £93.5m and made a pre-tax profit of £515,000.
However, in its business review, dated November 2018, the group said construction giant Carillion’s liquidation in January 2018 had meant “some timing disruption as contracts previously awarded have had to be rescheduled".
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“Due to the high level of credit insurance in place on Carillion plc there will be minimal write off balancers outstanding at the time of liquidation,” it said.
Sam Woodward, EY joint administrator, said: “The group’s cashflow had been impacted by a number of historical problematic contracts and a delay in the commencement of anticipated projects.
"Coupled with this, the group’s funding structure, with significant hire purchase and finance lease commitments put pressure on the cashflow at a time that asset utilisation was comparatively low.”
He added that it was now trying to find a suitable buyer.
Carillion inaction
Meanwhile, union Unite has warned that one year on from Carillion’s collapse, the government’s “inaction” was putting jobs at risk.
Unite said experts believed Carillion had been trading while insolvent for several years prior to its collapse and that the fallout had hit many of its subcontractors.
But it said the government had rejected all calls for reforms to prevent future corporate meltdowns.
Gail Cartmail, Unite assistant general secretary, said: “It is staggering that a year after the biggest corporate failure in modern UK history the government has carried on as though it is business as normal.
“The fact that no one involved in Carillion has yet had any form of action taken against them, demonstrates either that the regulators are failing to do their jobs or that existing laws are too weak.
"If it is the latter then we need better stronger laws.”
Image: shutterstock
