Vaughan Engineering owed trade creditors more than £9m when the firm’s operations in Great Britain went into administration following the collapse of Carillion.
A report filed by the company’s administrator KPMG showed that its failure has left trade creditors out of pocket to the tune of £9.2m.
It also owed more than £668,000 to HMRC and £2.9m to lender Danske Bank.
KPMG’s report described how the company grew considerably in recent years, reaching a peak of £50m turnover in the year to 31 March 2016.
This compared to an average annual turnover of £20m prior to 2010.
Despite the peak turnover of £50m in the year to 31 March 2016, the company incurred an operating loss of £800,000.
That worsened in the year to 31 March 2017 when annual turnover dropped by a quarter to £38.2m and an operating loss of £2.57m.
Directors blamed the losses on two contracts where disputes arose and that trading in the nine months to 31 December 2017 had improved.
Consequently, it was prejecting turnover of £38m for the year to 31 March 2018 with a “breakeven result”.
However, its cash position deteriorated significantly when Carillion, one of Vaughan Engineer’s key customers, collapsed in January this year.
Meanwhile, the disputes rumbled on and the company did not receive the associated settlements as had been forecast.
That left the firm requiring an extra £1.5m in cash by the end of March 2018. The directors tried to raise support from local development agencies but failed to find the money.
On 16 March, it was told by one of its disputing customers that no payment would be forthcoming for the foreseeable future, and on 22 March the company called in administrators.
Vaughan Engineering had a base in Broxburn, West Lothian, and also operated from sites in Newcastle and Warrington. It was a subsidiary of the wider Vaughan Engineering group based in Belfast.
The wider group continues to trade as normal under the control of its directors.
