Around 50 jobs set to go as Co Antrim building firm goes under
Newtownabbey company’s creditors to lose massive sums
Co Antrim construction firm T&A Kernoghan Ltd is to go into administration, putting 50 jobs at risk and leading to major losses for its creditors, the Belfast Telegraph can reveal.
The insolvency of the long-established Newtownabbey firm is expected to have a grave impact on sub-contractors engaged by the firm to carry out work. Around 10 firms are owed money by the firm, which also carried out plumbing and heating work, and are understood to range from a cleaner who’s owed £8,000, to a major firm owed £800,000.
Business advisory firm BDO is expected to be appointed administrators of T&A Kernoghan Ltd this week.
There are around six firms in the T&A Kernoghan group. Holding company T&A Kernoghan (Holdings) Ltd reported turnover of nearly £30m in the year to March 31, 2015, through pre-tax profits were just £18,000.
BDO yesterday said it would not be commenting on the administration process. But it's understood BDO is being appointed as administrator by Upstream Capital, a finance house which had provided initial invoice financing of £650,000 to T&A Kernoghan.
That financing was then extended to £1.3m by Keys Commercial Finance - the old name for Upstream.
According to a funding guide from the Ulster University SME Centre, the arrangement "saved the business and secured over 200 direct jobs and many more sub-contractor jobs".
Last week T&A Kernoghan Ltd faced a winding-up order from Michael Moore Contracts, a one-man painting and decorating business in Co Down.
And earlier this year Paw Structures, a structural engineering firm based in Yorkshire, also took a winding-up petition against the firm, though that petition has also been delayed until later this year.
T&A Kernoghan was last year removed from two major contracts in Scotland following delays in delivery.
In September, it was removed by South Ayrshire Council from a £1.5m deal to build Belleisle Golf Club House. Councillors in the area said they had been "frustrated" by a lack of progress on the project.
And it was also removed from a deal to build a £2.2m community complex and office space for Midlothian.
A hearing over the winding-up petition brought against the firm by Michael Moore Contracts was adjourned until June in a court hearing last Thursday. No-one from T&A Kernoghan was available for comment yesterday.
Related company Alom Properties - which shares the same address and directors as T&A Kernoghan in Mallusk - went into administration last week.
John Armstrong, managing director of the Construction Employers Federation (CEF), said the issues at T&A Kernoghan were a reminder of deep-seated problems with the industry.
He said: "People talk about recovery but really, it is a very fragile recovery. Margins are so tight because people have submitted low-priced tenders for work in order to stay in business.
"That leads public sector clients in particular to expect low prices."
According to T&A Kernoghan Ltd's last published full accounts for the year ending March 31, 2014, it employs 88 people - but it's understood the workforce has since dwindled to around 50.
And accounts for the same period for T&A Kernoghan (Group) Ltd show it had £25.5m in sales over the same period, and pre-tax profits of £77,000.
A mechanical services subsidiary made sales of £2.27m and paid £71,200 of management charges to T&A Kernoghan Ltd during that financial year, the accounts show.
T&A Kernoghan Ltd also paid rent of £54,487 to T&A Kernoghan (Holdings) Ltd in that time.