Jobs go as historic firm calls in administrators

Sep 27 2008 by Chris Knox, The Journal

A LARGE number of jobs have been axed at an 88-year-old electrical company after it was forced to go into administration. Newcastle-based Watson Norie has called in administrators PricewaterhouseCoopers (PWC) after making a significant proportion of its 374-strong workforce redundant.

An announcement by PWC said that the firm had been unable to continue with outstanding contracts without significant additional funding, despite an annual turnover of almost £30m.

The company had been in talks with an interested party to sell part of the business, which later pulled out due to concerns over the costs of a deal.

The firm, which was set up in 1920 and has offices in Newcastle, Scunthorpe and Grangemouth in Scotland, is regarded as one of the North East’s major contractors. Its client list is a roll call of blue chip industrial giants. It has worked with the likes of Shell and BP in the oil and gas sector as well as EXXON Chemicals and GlaxoSmithKline. Despite a turnover that hovered around the £28m mark for the past four years, the firm has seen its operating profits plummet during the same period, dropping from £632,000 in 2003 to £40,000 last year.

The firm, which primarily specialises in the petrochemical industry, heavy industry and large commercial projects, also saw its pre-tax profits take a hammering, with figures nose-diving from £783,000 in 2003 to £79,000 in 2007.

Although directors Graham Clark, Lee McLean Marshall and Graham Bullough were not available for comment, Mark Loftus, joint administrator and director at PricewaterhouseCoopers, said: “It is clearly disappointing that such a long established company and a well-known name in the industry has been placed into insolvency proceedings, particularly for the employees.

“We are very keen to hear from anyone who may be interested in purchasing the business in whole or in part.”

Tony Sarginson, regional manager at manufacturing industry body EEF, said: “It’s always sad when something like this happens to one of the big North East companies. I’m particularly surprised that it’s happened to a firm that’s so heavily involved in the petrochemical industry, which is a sector which is currently experiencing a boom in the region.”

It’s always sad when something like this happens to one of the big North East companies