Four Lagan Construction Group firms go into administration - 200 jobs at risk in Northern Ireland
Administrators have been appointed to a number of companies within Lagan Construction Group, putting hundreds of jobs at risk in Northern Ireland.
Group chairman Michael Lagan has confirmed that four of its 30 companies have gone into administration - Lagan Construction Group Holdings Limited, Lagan Construction Group Limited, Lagan Building Contractors Limited and Lagan Water Limited.
He said that parts of the group had been significantly impacted upon by a number of factors including delays in the commencement of new projects and protracted contractual disputes on some existing major projects and instability caused by a joint venture partner in Great Britain.
Mr Lagan said: “It is with great sadness and reluctance that we have had to take this course of action. We have had long standing relationships with many of sub-contractors and suppliers. We hope that the process of administration will be smooth and that disruption to both projects and jobs will be minimal”.
The group employs eight hundred people and up to two hundred employees may be affected by the announcement. It is hoped that some of those jobs could be transferred to joint venture partners whilst others may be relocated to existing divisions within the group.
One employee told the Belfast Telegraph that local staff at the Belfast-based firm had yet to be informed officially, but she believed her job and those of others were at risk.
In a statement, the Construction Employers Federation said: "Given the huge contribution that Lagan Construction Group have made to Northern Ireland’s economy and society since their establishment, today’s announcement is extremely regrettable.
"They have been a pillar of our construction industry for decades and it is our express hope that a solution can be found.
“As the Federation has long said, the industry has faced a challenging period in respect of its sustainability.
"From issues related to low margins on works, to insufficient pipelines of activity, to the current political and budgetary challenges within Northern Ireland, there are significant tests which go much beyond today’s news.
"These must be matters of concern to anyone who wishes to see a healthy and vibrant Northern Irish construction industry given its critical role in delivering jobs, economic development and growth.”
As well as local contracts, the group also operates across other regions in the UK and Ireland, and internationally.
Its current projects include the new Belfast campus for Ulster University, which has been hampered by delays.
Lagan Construction Group and Portuguese firm Somague were awarded a £150m contract, part of the overall £250m budget, to complete the second phase of construction.
In November, it was reported that the scheme would be held up until 2019.
In January it emerged that legal proceedings had been issued by Ulster University over the construction contract, which could delay things even further.
Last year it was also announced that Lagan Construction Group was one of four firms to be awarded a £100m contract to carry out improvement works for NI Water. The company was brought on board alongside BSG Civil Engineering, Farrans Construction and Meridian Utilities to carry out an upgrade of the utility provider’s water and wastewater services in Northern Ireland.
Lagan Construction Group’s web page features a number of its flagship projects, including the £130m contract for the A8 Belfast to Larne.
The works involved designing and converting 14.5km of the A-road into dual carriageway between Coleman’s Corner Roundabout and the Ballyrickard Road.
Others include a £4.2m Premier Inn at Victory Pier in Chatham and a runway for the RAF at Akrotiri, Cyprus.
Group turnover in the year to March 2016, at £225m, rose by 12% compared to the previous year, according to the latest accounts available.
Operating profits rose in line with turnover. Pre-tax profits, year on year, improved in 2015-16 to reach over £6.7m: more than double the previous year. Pre-tax profits rose to £7.5m.
Lagan Construction Group is a separate entity to Lagan Group which is unaffected by this development.
In 2010 the original group of Lagan companies separated and Lagan Construction Group is now led by Michael Lagan.
Lagan Group, owned by Michael Lagan’s older brother Kevin, is currently in talks to sell part of its business to Leicestershire-based Breedon Aggregates.
Belfast Telegraph Digital