More than 300 people have been made redundant after Tyneside construction company Tolent was put into administration.
Tolent - which is one of the region’s largest construction firms - closed sites on Friday and sent staff home. It had been trying to secure its future but now it has been confirmed that it has gone into administration with 313 jobs lost. A further 91 workers have been retained at the firm while administrators try to save it.
The company has been involved in a number of high profile construction schemes in the region in recent years, including the Hadrian’s Tower project in Newcastle. But big losses on the £84.5m Milburngate development in Durham have hit the firm and now business advisory group Interpath has confirmed that a team has been appointed after the firm tumbled into financial difficulties.
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Alongside its head office on the Team Valley, the company also has bases in Shotton Colliery, County Durham, Teesside Industrial Estate in Stockton-on-Tees and Leeds.
James Lumb and Howard Smith from Interpath Advisory have been appointed as joint administrators to Tolent plc and five of its operating subsidiaries.
Mr Lumb, managing director at Interpath Advisory, said: “Tolent is one of the most well-known construction firms in the North East, having been involved in landmark projects including Riverside Sunderland, the Hadrian’s Tower residential scheme and the £85.5m Milburngate development in Durham.
“However, like many businesses across the UK’s building and construction sector, the group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its suppy chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.
“Following the tapering off of the Government’s Covid support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector. This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.”
Tolent was founded by John Wood in 1983 and totted up first year turnover of £300,000, with its first deal coming from British Steel, a long-standing client.
Over the years the company has been responsible for some fo the biggest schemes in the region and beyond, including the £60m Sage head office in Gosforth, Newcastle City Library and the Beacon of Light.
Its fall into administration comes months after it used its accounts to blame a £4m loss partly on the collapse of developer High Street Group. The contractor saw a 7% increase in group turnover to £197.9m in 2021, the highest since its launch in 1983, but the group recorded a £4mloss amid what it described as “ a perfect storm” of adverse trading conditions.
In 2019 Tolent had moved reluctantly to shut its southern operations after it had shown “disappointing performances over a number of years”. Two years later in July 2021, Tolent secured a £12m finance facility, later increased to £12.9m, to help it after a challenging year, saying it had sealed the asset-based lending facility from Independent Growth Finance (IGF) to provide the working capital and the flexibility it needs to support its business.
More recently, Tolent has been involved in a number of key regional developments including the construction of a new Aldi supermarket at Kingston Park, Newcastle, a £3m intensive care unit for South Tyneside and Sunderland NHS Foundation Trust. It also carried out the transformation of the NHS Nightingale Hospital in Sunderland and last year completed the sale of its land at Seaham Garden Village to a trio of developers including Karbon Homes, Taylor Wimpey and Miller Homes.
Tolent’s collapse comes as business experts with restructing organisation R3 in the North East warn that the “insolvency dam has burst”, following a number of high profile company failures. Last week saw long-established Gateshead fair trade company Traidcraft go out of business while Killingworth firm Metnor Construction has also filed notice of going into administration. Figures from the Insolvency Service statistics show that the number of firms put into liquidation through Creditors’ Voluntary Liquidations has reached its highest level in more than 60 years.
A spokesperson for the Milburngate development in Durham said: “The current building work at the Milburngate is very near to completion. The sad news that Tolent has entered administration will not impact on the project. The joint venture developers will continue the final stages of phase one by engaging directly with sub-contractors and relevant Tolent staff to ensure a timely end to construction work.”
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