James Lumb and Howard Smith from Interpath Advisory were appointed Joint Administrators to Tolent plc and five of its operating subsidiaries on 13 February 2023.
Headquartered in Gateshead and with offices in Leeds, Stockton-on-Tees and Shotton Colliery, the Companies operate across the construction sector providing services in building, civil engineering and property development. Collectively, the Companies employ circa 400 people.
Over recent years, and in common with many businesses operating across the building and construction sector, Tolent has faced significant challenges including the rising costs of raw materials, supply chain issues, material and labour shortages, and the collapse of a number of developers, contractors and supply chain partners.
Against this difficult backdrop, one of Tolent’s major contracts – the £85.5m Milburngate development in Durham – became significantly loss-making, which had a profound impact on the Companies’ working capital.
In recent months, the Directors of the Group have worked extensively to explore options to safeguard the future of the business, but with a solvent solution unable to be secured, they took the difficult decision to place the Companies into administration.
Regrettably, the Joint Administrators made 313 of the Companies’ employees redundant immediately following their appointment. A total of 91 members of staff have been retained by the joint administrators to assist them whilst they explore any possibility of a sale of the businesses and their assets.
James Lumb, Managing Director at Interpath Advisory and Joint Adminisrator, said: “Tolent is one of the most well-known construction firms in the North East, having been involved in landmark projects including Riverside Sunderland, the Hadrian’s Tower residential scheme and the £85.5m Milburngate development in Durham.
“However, like many businesses across the UK’s building and construction sector, the Group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its suppy chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.
“Following the tapering off of the Government’s COVID support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector. This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.
“Additionally, after the annual Christmas shut-downs and a cold December, the months of January and February often bring with them a painful cash crunch. In a sector which typically operates on wafer-thin margins, this can often prove to be insurmountable, and unfortunately, so has been the case for Tolent.”
James Lumb continued, “Our priority in the coming days is to work with key stakeholders to assess options for each of the Companies, including options for ongoing contracts and live projects.
“We will also be providing support to those employees who have been impacted by redundancy, including providing them with the guidance and information they need to be able to make claims from the Redundancy Payments Office.”