Builder renowned for its quality suffers collapse

Mar 6 2008 by Graeme King, The Journal

HOUSEBUILDER Wilcomm has collapsed with the loss of 26 jobs as the delicate state of the construction industry claims another scalp.

Administrators from accountants Deloitte are trying to sell the company’s three North East development sites.

The Sunderland firm is believed to have suffered from a lack of orders for its homes and so could not pay its bills or service its debts.

Chief executive Kevin Wilde and his managing director Graham Swift have now left the business, and there are just four staff remaining to assist the administrators in closing the company down.

The sad demise of Wilcomm, which had a good reputation for quality homes, follows the announcement of redundancies at several other housebuilders recently.

Bellway and Taylor Wimpey are both looking for job cuts in the North East and Persimmon has also had to make cuts elsewhere in the country.

Ian Brown, one of the joint administrators working on Wilcomm for Deloitte, said: “The company does have a reputation for building good quality homes, but they have been in a bit of turmoil. If you don’t sell the property, complete and get the cash in, you struggle.

“Housebuilders spend all their money up front and need an income stream from sold units, and it’s difficult to complete and sell before you’ve finished a site. There is creditor pressure and a level of debt to service.”

Mr Brown said Wilcomm had 37 homes under construction when he was called in this week.

“The company has three sites – Ryton with 15 houses, Seghill with 10 houses, both of which are largely complete, and one block of 12 apartments in Washington. For that scheme, the shell is built, but it has not been fitted out. Lots of the building work was done by sub-contractors.

“We have secured all the sites and will be getting estimates of what it will cost to complete them, then sell them off. There is a total of 37 properties which will be of interest to certain people in the construction industry.

“We will be advertising them for sale very shortly. It’s the kind of thing which needs to be picked up very quickly.”

The downfall of Wilcomm follows the closure or takeover of several regional construction firms in recent years.

Last April, industry giant Rok took over 100-year-old Newcastle construction firm Harry Kindred. In summer 2006, Northumberland’s Stephen Easten collapsed owing millions of pounds to hundreds of creditors, before the company’s assets were bought out by County Durham’s Esh Group.

Meanwhile, MMP Group in Newton Aycliffe also collapsed with the loss of 250 jobs, though some parts of the business were later rescued.