A family-run M&E specialist has appointed administrators after reporting losses for two years running.
HBS Southern, founded in 1950, appointed administrators from RSM UK last week (16 October), according to the official record.
HBS Southern was run by founder Harry Bull’s son Kevin, who worked alongside his own sons, James, Alex and Charles.
The firm had expanded over more than seven decades from a local Hampshire plumbing and heating contractor to an established M&E specialist working for many major housebuilders, including Barratt, Berkeley and Taylor Wimpey.
However, HBS Southern had struggled with flagging demand in the housebuilding sector, Charles Bull wrote in the firm’ final set of accounts, for the year to 31 March 2023.
During that year, HBS Southern’s pre-tax losses grew to £1.1m from £900,000 the year prior. Turnover also decreased slightly, from £16.4m to £15.5m.
Bull wrote that a strong pipeline coming out of the pandemic had not translated into profits after material prices inflated by an “exceptional” amount.
He reported his firm had been undercut in bidding by other subcontractors with smaller overheads, which developers were “eager to take advantage of to make their reduced outlets as profitable as possible”.
Developers’ slow decision making, including re-tendering the same packages multiple times, had hampered the firm’s ability to win new work, Bull added.
He also blamed post-Covid hybrid working patterns, which he said “stifled communications”, resulting in longer times for developments to progress to the delivery stages.
Management forecast that turnover would plateau or decrease slightly, which they attributed to housebuilders’ uncertain sales forecasts.
Bull said HBS would aim to stem the damage of reduced revenues from the housebuilding sector by diversifying into other sectors, including commercial builds.
At the time of reporting, it projected a net cash outflow of about £800,000 for the financial year ending 31 March 2024.
Subsidiaries HBS New Energies and UPOWA were bought by materials giant Brickability in 2021. HBS New Energies later rebranded to UPOWA.
RSM UK has been contacted for comment. Calls to HBS Southern went unanswered.
