Vital Infrastructure Asset Management, the Speke-based firm previously known as King Construction, has brought in administrators, citing cashflow constraints as a result of disputed contracts.
Daniel Smith and Clare Boardman of Teneo were appointed to lead the administration of the company at the beginning of June.
What went wrong?
In a statement sent to Place North West, Teneo said VIAM’s trading performance was impacted by disputes with certain customers leading to receipts being withheld. This led to “severe liquidity pressure, and ultimately led to circumstances which required the group to be placed into administration”, Teneo said.
“This is unfortunately a very challenging period for the group’s stakeholders, and in particular its employees,” said joint administrator Daniel Smith.
“Despite the best efforts of the directors, the group was unable to generate the cash needed to sustain its trading operations. Our immediate focus is on supporting the group’s employees to ensure all relevant claims are submitted as promptly as possible.”
A swift decline
VIAM’s demise comes just two years after the firm generated £35m in revenues for the 12 months ended 31 March 2019, up from £23m the previous year.
The firm also made a £795,000 pre-tax profit that year, rising from £615,000 in 2018.
The company, which employs around 300 people, has not published a financial statement since then.
Founded in 2002 as Knowsley Contractors, the firm traded as King Construction until March this year when it changed its name to Vital Infrastructure Asset Management.
In 2005, Mark Doyle joined the company as a director, according to Companies House.
Doyle remained at King Construction until 2019 when a group of company employees bought him out for £11.6m.
The MBO was led by a four-strong senior team including managing director Dave Prescott, chief operating officer Campbell Crawford, finance director Simon Warner and commercial director Mike Taylor.
Doyle resigned in December 2019, according to Companies House.
King Construction’s Tarmacademy scheme featured in the case studies section of Max Caller’s damning report into the running of Liverpool City Council’s planning, highways and regeneration departments.
The Tarmacademy, which was never built, was a proposed training and apprenticeship facility for the construction industry. An additional element of the project, an asphalt plant operated by Cemex, is open and operational.
Caller included the project as an example of poor practice by Liverpool City Council in relation to land deals, saying it demonstrated a lack of procedural scrutiny and a failure to produce a robust business case
The authority helped King Construction advance the Tarmacademy project by acquiring four industrial plots in North Liverpool totalling seven acres for more than £4m, according to the report.
Caller said Liverpool did not provide “a clear business case or clear reasoning why the council should assist King Construction by purchasing the land” and failed to appropriately asses the risks of providing such support.
Caller’s report adds that the process of acquiring the land demonstrated a “complete failure by the council to show that the best value duty has been complied with”.
In 2015, Doyle set up a special purpose vehicle to deliver the Tarmacademy scheme but the SPV was dissolved last month.