UK Construction Giant Enters Administration Amid £5.9M Losses

A prominent UK construction firm has officially entered administration after incurring a pre-tax loss of £5.9 million for the year concluding on March 31, 2024. This significant downturn has led FK Group, along with its two subsidiaries, to file notices indicating an intent to appoint administrators.

Factors Leading to Administration

FK Group, based in Cheshire, has faced several challenges contributing to its financial difficulties. Key factors include:

• Delays associated with the building safety regime.
• An ongoing and unspecified legal issue linked to the collapse of tier one contractor ISG.

The company’s turnover plummeted by 23%, amounting to £100.6 million during the reporting period.

Financial Performance of Subsidiaries

FK Construction, the main contracting branch of the group, reported a pre-tax loss of £7.5 million. Its revenue experienced a drastic decline, falling by 50% compared to the previous year. Additionally, FK Construction accounted for £5.5 million in exceptional expenses due to the legal dispute with ISG.

In contrast, FK Facades, which focuses on curtain walling and rainscreen systems, managed to achieve a pre-tax profit of £1.2 million from revenues totaling £57.2 million during the same period. Despite this profit, overall accountability remained overshadowed by FK Group’s broader financial woes.

Recent Legal Setbacks

Compounding FK Group’s challenges, a recent High Court ruling went against FK Facades. The court determined that Paragon could recover £80,500 in relation to remedial work on the roof of a commercial property located in Ashton Moss, Greater Manchester. This ruling included the recovery of adjudicator’s fees as well.

Looking Back at FK Group’s Legacy

Established in 1979, FK Group had built a solid reputation as a leading contractor within the UK construction sector. The company was recognized for its expertise in roofing, cladding, façade systems, and complete building envelope solutions. Most notably, FK Group ranked fourth in the latest CN Specialists Index for building envelope contractors.

Despite its history as a significant player in the industry, the combination of economic pressures and internal disputes ultimately led to the need for administration. The group’s current delay in submitting financial accounts for 2024/25 at Companies House raises further concerns regarding its operational stability.