Project delays and pension deficit sank Simons

Simons

January 14, 2020 – Trade contractors and suppliers to Simons Group have been left nearly £13m out-of-pocket by the collapse of the Lincolnshire business.

The main operating division Simons Construction collapsed with total debts of £54m, including a £30m pension deficit, nearly £9 of contract cost accruals and £1.2m in unpaid wages.

It was the biggest of the three companies that included Simons Group and Simons Development to collapse.

The administrators’ report reveals that the firm first started talking to accountants at FRP more than six months before they were finally called in to take over as administrators.

The directors were concerned about projected cash flows and the board’s commitment to pay over £1m in 2019 to help close the pension deficit.

At the time, the directors believed their strong order book would enable them to trade out of difficulty supported by a cost-cutting programme.

But by the end of last July economic headwinds had caused more projects delays, deepening losses and draining cash.

The cornered directors asked FRP to explore selling off parts of the business in a last-ditch attempt to save the main company.

They also approached pension fund trustees and the pensions regulator in the hope they could lift the pension deficit as a liability on the group.

This offer was rejected in early October, leading the directors to call in administrators at the end of that month.

The three trade contractors hit hardest include: M&E specialist Imtech, owed over £950,000; Hull-based Ashford Cladding Systems caught for nearly £580,000; and Wakefield’s Nationwide Structures owed £450,000.

Source:- https://www.constructionenquirer.com/2020/01/12/project-delays-and-pension-deficit-sank-simons/

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