The Rise Primesite
CPUK was the lead contractor for Primesite's failed The Rise scheme

Problem jobs sealed CPUK’s fate, administrator says

Dan Whelan

The Skelmersdale-based contractor fell into administration owing £11m to creditors because of the impact of Covid-19 and a string of “problem jobs”, most notably Primesite Developments’ £40m The Rise scheme, which left CPUK with £3m of debt. 

At the time of Primesite’s collapse in 2019, CPUK had carried out around £7m worth of work on the stalled Rise scheme, according to a report from the contractor’s administrator Duff & Phelps. 

CPUK’s directors were informed by Primesite that the project, a seven-storey residential building containing 432 flats and apartments, could not complete. As a result, the contractor attempted to resurrect the project but was unable to secure additional funding. 

In the 12 months leading up to its administration, CPUK had undertaken a small number of other design and build contracts that resulted in losses due to various issues including client payment defaults, overruns and higher prices of some raw materials, according to the administrator. 

These problem jobs, coupled with an uncertain outlook for the construction industry amid the Covid-19 pandemic, had led to a “drain on the company’s cash reserves,” the report said.  

CPUK, which started trading in March 2000, had £805,000 cash in the bank when it called in the administrators earlier this year. 

Shot Tower 4

CPUK was the main contractor for The Shot tower, a 78-home scheme in Chester, when it collapsed

Of the total £11m CPUK owes to creditors, £9.2m is owed to suppliers and contractors and £570,000 is owed to HM Revenue & Customs, according to the report. A further £1.2m in bonds is also outstanding. 

There will be sufficient realisations from the company’s assets to pay unsecured creditors, the report said. However, as asset realisation is at an early stage, it is not yet known how much creditors will receive. 

At the time of its collapse, CPUK had 10 live contracts, including a 78-home development at The Shot tower in Chester, and Novo Property Group’s affordable home scheme on Brown Street in Hale. 

Novo has hired three former CPUK employees to continue working on the project, which is being delivered alongside Trafford Council and due to complete in early 2021. 

All of CPUK’s staff were placed on furlough in March before being made redundant when the company went into administration. 

Your Comments

Read our comments policy here

This was on the cards for many months

By IR

That shot tower development is absolutely grotesque, reminds me of a concentration camp, just like those others near the Canal basin and Telford Warehousr

By Susan

From the conception of the company and their first very contract theirs was an unsustainable, problematic and unrealistic business model.

By Shane Martin