In a month which saw WRW Construction and Cleveland Bridge slide into administration, yet another construction sector casualty has to be added to the list of collapses for the summer of 2021 in the form of Minster Building Company, based in Nottinghamshire.
A blow to assisted living
The UK has an ageing population and a growing number of individuals requiring assisted living resources as time progresses, and businesses like Minster Building Company specialised in helping build assisted living facilities for those requiring them most.
The firm seemingly had healthy finances in the run-up to the pandemic, according to the latest accounts filed at Companies House. Minster Building Company reported having total assets less liabilities worth £1.15 million, but reports have since emerged that it owed HMRC close to £170,000 as well as £1.2 million to trade suppliers, suggesting a far less rosy time of it since COVID-19 hit the UK.
Another £140,000 are reportedly owed in the form of employee claims, adding to the financial pressures which seemingly caused Minster Building Company to make the difficult decision to call in the administrators this month.
Multiple pressure points
Minster Building Company faced multiple pressure points, starting with a freezing of activity directly due to the pandemic and the lockdown that ensued. Delays to projects may have caused revenues to run dry at a critical period, making liabilities mount and prove harder to repay. In addition, production costs surged as raw materials rose in price.
In effect, Minster Building Company was priced out of business, facing rising debts, soaring costs for the resources to allow it to do business and little respite. However, this firm did hold sizable assets in the period before the pandemic, suggesting it was a strong business which was a victim of circumstance.
Assisted living projects are unlikely to be going anywhere soon, and if anything, more likely to increase in number as the UK’s population ages over the coming years. Structurally, Minster Building Company’s sector looks stable, but the short/medium-term climate was all it took to ensure its undoing as a business.
Provided that the market conditions return to a more hospitable setting, perhaps investing in a distressed business opportunity could prove to be the best decision you make in 2021.