Written by: Keith Tully
Reviewed: Thursday 21st July, 2016
Administrators have been called in to manage the affairs of the Dunne Group, a Scotland-based construction company with hundreds of employees in the UK.
The group has been involved in numerous major construction projects in London and in Scotland, with its specialisms including the processes involved in creating the foundations for skyscrapers and giant tower blocks.
However, after struggling through a cash flow crisis in recent months, the group has been unable to maintain financial stability and been left with no choice but to enter administration.
A total of 524 people have lost their jobs with the group immediately and hundreds of contractors are facing uncertainty over payments.
“This is a sad loss for the construction and building industry,” said Tom MacLennan, one the Dunne Group’s newly appointed administrators.
“The business faced substantial trading losses on some contracts, leading to severe cash flow pressures,” he said.
The Dunne Group was founded in 2001 and has sought to pursue rapid expansion since that time.
Among the projects it had been signed up to work on prior to its entry into administration were the construction of a new skyscraper on Bishopsgate in the City of London and a tower block near Blackfriars Bridge on the banks of the River Thames.
More than 300 jobs are expected to go in relation to the group’s London contracts, with a further 200 to go among teams working for the business across various sites in Scotland.
“Rapid expansion led to pressure on working capital and a requirement for significant additional funding that was not available,” explained MacLennan in his statements about the group’s entry into administration.
“Given these issues, the joint administrators have had to cease trading, resulting in 524 employees being made redundant,” he said.
Plans are now in place to see the Dunne Group’s assets including cranes, access platforms, lifting equipment and trucks valued and sold as administrators aim to minimise debts left outstanding to creditors.
Administrators noted that the group managed to generate around £74 million in turnover last year, with this year’s figure having been expected to reach roughly £96 million.