In news that shocked the finishes and interiors sector, despite making profit in every year of its 23 year trading history, Astins, one of the UK’s largest specialist drylining contractor, has entered into administration. It is understood that this relates to a legal claim running into millions based on a project completed in 2012.
In a statement to staff and stakeholders, Astins advised:
“After consultation with our legal team they have advised that to contest this would prove costly in the extreme and it is highly likely that even if the alleged defects could be rebutted other similar allegations may well ensue on this or other connected Projects.
As some may be aware Astins has in the past six years been drawn into a number of “legacy” contracts and where appropriate has rectified or are rectifying works at its own cost. In this instance there are several distinct differences – most significantly this is a demand for payment as opposed to a demand to correct alleged defects.
The overriding impact of the previous legacy contracts has impacted our cash flow hugely over the past six years, to say nothing of the loss of circa £1.3m incurred as a result of the demise of Carillion. To compound matters, the credit facilities available to us have gradually been eroded post Carillion – meaning that available credit from lenders is one third of what it was two years ago. Add to this the well documented issues around confrontational behaviours and challenges around the payment cycle that beset our industry we find ourselves facing an insurmountable obstacle.”
FIS CEO Iain McIlwee stated: “This is devastating news for all involved and our hearts go out to all of the families that are impacted. The statement above really does describe a perfect storm of all of the issues that are currently impacting the construction sector in the UK, with specialists left carrying an unacceptable level of risk both from a contractual and financial perspective. Something has to be done to look at the credit crunch that is undermining investment and deepening our risk exposure. First things first though, we are encouraging all employees of Astins to send us their contact details and appealing to any companies interested in recruiting some of the excellent people that were working at Astins to get in touch.”
Astins employees and interested companies are encourage to contact FIS via our JobSpot service: https://www.thefis.org/jobspot/