UK fit-out failures run against the tide
By Chris Wheal
July 17, 2024
Is there a lack of business, late payments, rising materials? What is the problem?
What’s going on in UK fit-out? Two fit-out firms have hit the rocks, despite official figures showing the construction sector has the wind in its sails.
Cardiff-based office fit-out firm Paramount D&B has gone into administration. Its website now says: “Susan Clay and Huw Powell were appointed joint administrators of the Company on 15 July 2024 and the Company has ceased trading.”
Reports also said that Surrey and London-based Blenheim House Construction has made an administration application to the court. This was six months after its accounts showed the firm’s first loss in its 26 years of trading.
Fit Out News called the company’s Chertsey head office but was told a statement was being prepared. It did not deny the claims.
Wales and beyond
Paramount works across Wales but also claims to be across the UK and sometimes abroad. It has offices in Cardiff and Bristol. In July last year it changed its name from changed its name from Paramount Office Interiors to Paramount DB.
Its last full published accounts are from June 2022, but in 2023 it extended its financial year to the end of December. No further accounts have been added to Companies House.
Cashflow problems?
Latest accounts for Blenheim House, for the year to April 2023, reported turnover at £86.6m with a £137,000 loss. Blenheim House directors said in the accounts that turnover was lower than forecast.
“The continuing difficulties that our suppliers and subcontractors have experienced, with increased material costs following the war in Ukraine and, in part, the losses they incurred during the Covid pandemic, has meant that a number of companies we were employing went out of business,” the accounts said. It claimed this has added to costs. It also warned margins would be low in future.
Word in the market is that Blenheim House’s cashflow problems have meant it was unable to pay some key subcontractors, which submitted winding up orders. Companies House shows a flurry of directors stepping down on 2 July.
Construction booming
Meanwhile, the wider market appears buoyant. The Office of National Statistics (ONS) said on 11 July: “Monthly construction output is estimated to have grown by 1.9% in volume terms in May 2024; this follows a fall of 1.1% in April 2024 (revised from a fall of 1.4%).
“The increase in monthly output came from increases in both new work (2.7%), and repair and maintenance (0.8%); anecdotal evidence from survey returns noted that warmer weather contributed to increased output in May, with the Met Office confirming in their monthly climate summary that May 2024 was the warmest on record.
“At the sector level, eight out of the nine sectors saw growth in May 2024. The main contributors to the monthly increase were a 2.8% increase in total new housing, with both private and public new housing increasing on the month; infrastructure new work, which rose by 3.5%; and non-housing repair and maintenance, which grew by 2.1% on the month.
“Construction output is estimated to have fallen by 0.7% in the three months to May 2024; this came from a decrease in new work of 0.9%, and repair and maintenance, which fell by 0.3%.”
Fit Out News approached the UK trade body FIS for its analysis of the market but received no answer.
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