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Shock as administrators set to be appointed at Clugston Construction

Administrators are set to be appointed at Clugston Construction after the long-standing industrial giant hit the wall.

KPMG officials are anticipated at the Scunthorpe base of the privately-owned firm on Friday, after it collapsed, sending shockwaves through the town it is a pillar of, and the wider industry.

Sources say it unravelled quickly late on Thursday, with more than 250 staff understood to be affected. It has employed upwards of 600 at construction peaks.

It comes just weeks after second generation chairman, John Clugston, announced he was stepping down, with third generation David Clugston to take the helm at St Vincent House.

John Clugston is to step down as chairman of Clugston Group. Son David Clugston is to take over the role.
(Image: Nick Hill, NMD Creative Ltd)

Chief executive Bob Vickers had also left the business this summer, with interim Glynn Thomas understood to have set out a plan to turn round fortunes, with “problem jobs” hitting the bottom line.

Having had its busiest year ever in 2017, with a £176 million turnover recorded, a small loss of just under £500,000 was shrugged off as part of a major restructure to ensure a sustainable future.

It would appear that has failed to materialise, and potentially been exacerbated, leading to the decision to call in recovery and insolvency specialists.

Mr Vickers had arrived from Carillion prior to its monumental collapse, replacing the long-serving Stephen Martin, and the latest annual report talked of a challenging year ahead in 2018, with projects delayed because of economic uncertainty.  Caution was sounded around a “good order book” with tight margins listed.

Robert Vickers, former chief executive of Clugston Group.
Robert Vickers, former chief executive of Clugston Group.
(Image: David Lee Photography Ltd)

The company was heavily involved in industrial builds, with major waste to energy plants and large warehousing, retail and manufacturing sites the core of the work. Ikea at Shefflield was one flagship project, with The Baths Hall in Scunthorpe another.

Separate divisions within the wider group, Logistics, Property and Facilities Management, may not be immediately impacted.

Founded in 1937, it excelled in recycling blast furnace slag for the iron and steel industries. Leonard Clugston was at the forefront of road and runway development in the early days, with technology developed in Scunthorpe licenced throughout the world.

A devastating blow just before Christmas, it comes as a rescue deal nears for British Steel, a business it had worked hand in glove with.

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