Metnor sank into administration in February owing creditors 拢10m
Collapsed North-east contractor Metnor was felled by rising labour and material costs, the impact of covid-19 and the loss of a key funder, a report from the firm鈥檚 administrator has said.
The company, which in its last set of accounts for the year to December 2021 posted an improved turnover of 拢63m and a pre-tax profit of 拢942,000, down from 拢2.4m the year before, sank into administration on 21 February, 20 days after being told a 鈥渒ey funder鈥� was pulling out.
According to an update from FRP Advisory, 鈥渨hile there were significant cash reserves, the company was experiencing cash flow constraints following the decision of a key funder to withdraw future funding on 1 February鈥�.
FRP said it was introduced to the company by its 鈥渒ey funder Stephen Rankin鈥� 鈥� who is listed as being one of the firm鈥檚 creditors, owed 拢1.3m. A local rich list table published in 2020, put the wealth of Rankin, who stepped down as a director of Metnor in 2019, and his family at 拢52m.
Metnor, which was set up in 2002 at Killingworth, just north of Newcastle, specialised in healthcare, student accommodation, residential and leisure work.
FRP said covid hit the firm鈥檚 ongoing contracts and revenue streams while 鈥渢he impact of Brexit and increase in material costs diminished the profitability of ongoing and new contracts, which in some cases led to bidding for new contracts which subsequently operated at a loss鈥�. At the time of its collapse, it had 49 people on its books.
Employees are owed around 拢90,000, including missing wages and holiday pay, with FRP saying they are likely to be repaid in full while HMRC, owed around 拢50,000, is also likely to get its missing money back.
And unsecured creditors, owed 拢10m in total, have been told 鈥渢here will be sufficient funds available to make a distribution鈥�.
Nearly 20 creditors are owed more than 拢100,000, the report says, with one trade contractor owed more than 拢800,000.
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