Contractor collapses with loss of 104 jobs

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Jehu Group has ceased trading after 87 years in business, with 104 staff made redundant.

Directors of the contractor, headquartered in Bridgend, Wales, have closed down its Jehu Group, Jehu Project Services and Waterstone Homes businesses, and are preparing to place them into administration.

Jehu specialised in construction and development projects for registered social landlords and councils in Wales and the south-west of England.

Its latest accounts show it turned over £111.27m in the 18 months to 30 September 2020, making a £4.01m pre-tax loss. In the 12 months to 31 March 2019, it made a pre-tax profit of £1.15m on revenue of £51.7m.

Some 104 employees were made redundant on Friday (21 October), with just five being kept on to help with the imminent administration process.

According to a statement from insolvency specialist Begbies Traynor, Jehu Group had 17 live contracts across its businesses worth a combined value of more than £100m.

Current projects include two timber blocks of four and seven storeys in Cardiff city centre for housing association Linc Cymru, a low-carbon housing scheme for Powys County Council in Clyro and 53 social homes for Vale of Glamorgan Council in Sully.

The business was established in 1935 by Jack Jehu and has been run by his family ever since.

Insolvency practitioners said that delivering fixed-price contracts with single digit margins agreed before the pandemic had decimated the group’s cash reserves.

Begbies Traynor managing partner in South Wales, Huw Powell, said: “This situation underlines the crushing impact of the current inflationary environment on an established and successful business.”

He said the company held almost £7m in net assets before COVID-19 struck. “However, delays in completing projects caused by the pandemic and subsequent cost increases caused a severe cashflow crisis that it could not recover from, despite support from key stakeholders.”

He added: “We are aware of the negative impact that this will have on the supply chain and hope that subcontractors will be able to work with the group’s customers to find the best possible solutions to complete existing projects.

“From our interactions with staff whilst we have provided advice to the group, it is clear that they remained loyal to and were proud to work for the business. Employees are of course devastated by today’s news, and I sincerely hope that their track record of delivering successful projects will stand them in good stead to gain new employment quickly.”

In a joint statement company directors Marc Jehu and Simon Jehu said: “This is a truly devastating day for the business started by our grandfather over 85 years ago. Every possible option to keep the business alive has been completely exhausted and it with desolate hearts that we find ourselves with no choice but to cease trading.

“We did everything possible to avoid closure, but we were fighting a battle that simply couldn’t be won due to the successive economic shocks of the past couple of years.”

They thanked staff for their service, and clients and supply chain partners for their support.

One brickwork subcontractor told Construction News he was owed £67,000 by the company for two jobs.

“I think it’s shocking to be honest, I heard nothing from them but they hadn’t paid me. I went to their office to be told the business was shutting down and administrators were already there,” he said.

The subcontractor said this is the second similar hit his business has taken in recent years, as he previously carried out work for WRW Construction, which collapsed in July 2021.

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