Lingwood-based construction company JS Hay has made 29 people redundant and called in the administrators after being hit by 'bad debts' and the poor state of the construction industry.
But the boss of the 50-year-old firm near Norwich said there was still hope for the remaining 23 staff, as the company continued to work with administrators in a bid to 'safeguard some of the jobs' and sell part of the business as a going concern.
Rob Lockhart, managing director of JS Hay, appointed PKF Accountants as the joint administrators who have already moved to sell some of the company's assets – including its office and workshop premises, vehicles, plant, office equipment and raw materials.
And yesterday PKF confirmed that the company had been working on five contracts when it collapsed, owing its creditors about £1m.
Mr Lockhart said: 'This has been a very difficult time for everyone involved with JS Hay. Placing the company into administration has not been easy, but it provides the best chance for safeguarding some of the jobs here and repaying the creditors. I'd like to thank all the staff and customers for their loyal support.'
In the company's last published accounts, the firm had seen its turnover increase from £7.361m in 2010 to £10,558m in 2011, while its pre-tax profit had jumped from £18,320 to £21,551 over the same period.
And as part of the report, the directors said the firm was in a very strong position to trade through the tough economic climate, and while they expected turnover to reduce in the year to December 21, 2012, the company's reputation was still attracting contracts.
But PKF since confirmed yesterday that the company's latest results, which have yet to be published, showed its turnover had fallen.
Matt Howard, accountant and business advisor for PKF, said: 'Despite an excellent reputation for the quality of its work and high level of customer service, the depressed state of the construction sector generally has had a detrimental effect on JS Hay's current financial position. This was compounded by some significant bad debts in recent months, which resulted in the directors seeking advice about the company's options.
'As administrators, we are charged with securing the best possible return for creditors in very difficult circumstances.
'We are reviewing the available options and will explore whether this duty can be fulfilled by selling at least part of the business as a going concern.
'We will also consider offers to purchase specific assets, such as the office and workshop premises, vehicles, plant, office equipment and raw materials.
'We will aim to safeguard as many jobs as possible but redundancies are, unfortunately, inevitable. We have already spoken to staff to explain the situation and are offering help and guidance to them all.'
The company, which worked with local authorities and housing associations, has delivered a number significant contracts across East Anglia, including the restoration of the Whitlingham visitors' centre, the construction of the opthalmic unit at the James Paget University Hospital in Gorleston and joinery work on the Great Yarmouth Magistrates' Courts.
However, Chris Garner, vice-chairman of the Norwich Forum for the Construction Industry, said the sector had been tough in recent years, but some firms had managed to adapt to the difficult climate.
He said: 'It has been very difficult for architects, consultants and contractors in the sector because the number commissions is just not there.
'The sector is not flourishing but firms are adapting and managing to survive albeit on a smaller scale than before.
'It is a great shame to see a firm like JS Hay Ltd go because it will take away a lot of good craftsman who did good work, which will be one more loss for the county.'
A spokesman for CITB Construction Skills, an industry training body for the construction industry, said due to the 'weakness' of the construction industry there is likely to be more business failures in the east.
The spokesman said: 'Figures we published earlier this year, highlighted the enormous challenges that the construction industry faces as it struggles to return to growth.
'While the East of England is faring marginally better than other areas of Great Britain it is still in an extremely weak position and sadly there will continue to be business failures.'
ben.woods@archant.co.uk
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