Two more Birmingham companies that supply into the construction sector have collapsed – with almost 80 jobs lost – as the industry continues to struggle against the tough economic climate.
All 49 employees at Minworth heating company Pinnacle Heating Services have been axed when the firm collapsed after a major contractual dispute combined with slowing demand put paid to the business.
And 30 more jobs were lost at Aston roofing and cladding firm Sharkey & Co, which has been in business for more than 40 years, after it called in administrators on the same day, due to seeing margins squeezed by competition from increasingly desperate competitors.
Both companies have ceased trading.
The Birmingham Post has reported on a spate of collapses related to the construction industry in recent months as low levels of demand continue to take their toll.
Pinnacle was established in 1997 and was a service provider in the mechanical, electrical and service industries.
Kim Rayment and Joanne Wright, were appointed joint administrators of the firm, and are seeking a buyer for the assets of the company.
Mr Rayment, BDO business restructuring partner, said: “Unfortunately the economic climate and difficult trading conditions affected the business, together with a large bad debt suffered in relation to a contractual dispute. The joint administrators are taking all necessary steps to maximise recoveries for the benefit of creditors.”
In the past year a host of companies supplying to the construction sector have gone into administration, including Coventry-based building firm GAJ Group, Worcestershire-based Adroit Construction and large firms Connaught and Rok.
Tipton-based Image Styles group, Halesowen firm CPL Interiors and Armoury Demolition and Recycling have also failed in the past year. Sharkey & Co called in administrators from Shipleys on November 18.
Shipleys said that the company, which dealt with contractors and architects, found shrinking margins left it unable to undercut competitors.
Latest accounts for the year to March 31 posted on Companies House show the firm increased turnover by 15 per cent to £13.6 million. However, it saw margins drop from 23.4 per cent to 12.8 per cent across the year, pushing the firm into a small after-tax loss.
A Shipleys spokesperson said: “During 2011, due to the effects of the economic downturn, an increase in overheads meant the company could not take advantage of undercutting competitors which ultimately resulted in lost business and a declining cash flow.
“As a result the business started to come under severe pressure from its suppliers as debt balances increased and caused contract delays.
“The directors decided to seek independent insolvency advice from Shipleys in November 2011 when there were no signs of any improvement in its trading performance.’’