Paul John Development (Leicester), one among Leicestershire’s greatest constructing firms, goes bust


One of the top-selling construction companies in Leicestershire has gone out of business and lost 34 jobs.

Management consulting firm FRP was appointed as the joint administrator for Coalville-based Paul John Construction (Leicester) Ltd. appointed.

Last year, the company – a groundwork specialist – said it was badly hit by the pandemic when housing programs were put on hold and said it needed to negotiate wage cuts for workers.

The company, which last year ranked 176 on BusinessLive’s Top 500 list of East Midlands companies, was registered with offices in the Stephenson Industrial Estate in Coalville.

The last available accounts for 2019 – released last October – showed that pre-Covid margins had increased after the company dropped some “poorly performing contracts” while the management team was being restructured at the time.

The accounts had sales of nearly £ 42 million compared to nearly £ 51 million in 2018, while the business had moved from an operating loss of £ 1.3 million to an operating profit of £ 385,000

The papers showed that at that point the company had 49 employees on its office and management team and 19 construction workers – which has now dropped to 34.

According to the accounts, trading in the past few months has been in line with expectations, “well ahead of the same period last year and aiming for full profitability and cash generation.”

However, they went on to say, “However, the coronavirus outbreak in late March 2020 has severely limited the company’s progress.

“Home builders were responding to government-imposed mothballing site restrictions, although we were able to continue working on some commercial sector contracts that allowed social distancing and compliance with health and safety and government guidelines.

“These disruptions negatively impacted the company’s revenue and financial performance in the second quarter of the year. We expect less activity and inefficiency for the rest of the year.

“The company responded to the slowdown by taking employees on leave…. and receiving payment vacation from its HP providers.

“On returning to work, the company was able to negotiate wage cuts with its employees and improve payment terms with its customers.”

An FRP spokesman said his partners Gary Hargreaves and David Acland had taken over the administration.

He said: “The company, which specializes in preparatory work for the construction sector, has experienced significant financial challenges that have made it impossible for the company to meet its financial obligations.

“As a result, the company shut down prior to the appointment of the administrator and unfortunately all 34 employees were laid off by the company.

“The joint administrators are running the business properly and working with a special take-off practice to extract the value from the debtor’s ledger while assisting affected employees in making claims with the Redundancy Payments Service.”