Contracting firm Geoffrey Osborne has filed for administration, but says it is in talks to sell the business to new owners.
A notice announcing the company’s intention to appoint adminstrators was filed with the High Court shortly before 4pm yesterday (18 April) by legal representative Macfarlanes.
In a statement (see full text at bottom of story), it said that the decision came due to the firm suffering “headwinds common to the whole [of] construction” leading to losses on legacy projects and difficulty winning new work.
Chairman Andrew Osborne said: “Everyone in the construction industry knows the challenges of the past few years and Osborne has worked hard to continue to deliver projects.
“Our management team has done everything possible to look after our people and protect suppliers, while seeking to trade through the economic headwinds.
“While today’s decision to move towards administration is a last resort, it is now the right thing to do while we continue to seek external investment.”
The former civils company had not filed accounts for almost two years – in July 2022 it announced turnover of £325.8m for the year ending 30 September 2021.
It returned to profit, making £2m during the period, after losing £13.8m in the previous 18-month accounting period ending 30 September 2020, largely due to the sale of its infrastructure division.
During the 2020/21 accounting period, the firm said it had an average of 870 employees.
Data from construction research firm Glenigan shows the firm has 71 live contracts with clients – mostly local authorities and central government departments and agencies.
It is also on a number of public sector and housing association frameworks, including a £10m housing retrofits framework for the Greater London Authority.
In its latest accounts, the firm said that 37 per cent of the firm’s contracting activities came from rail work, with 23 per cent in highways.
Other revenue came from education and commercial, along with construction and maintenance work in the affordable housing sector.
However, following the sale of the infrastructure business, the firm said its construction business would focus on social infrastructure projects, “emphasising its net zero carbon approach and concentrating on the education and residential sectors including purpose-built student accommodation, local authority housing, mixed-use schemes and modular projects”.
On maintenance, it said that housing retrofit work to meet government net zero targets provided “a promising source of future revenue”.
FULL STATEMENT BY GEOFFREY OSBORNE
Geoffrey Osborne Limited has announced its intention to appoint administrators.
The decision was reached after an 18-month programme to restructure the firm to focus on the core construction business and following an extensive effort to secure new investment into the business.
The company with its advisors are currently working with interested parties with the ambition that aspects of the business will be sold and will continue to trade.
Negotiations are ongoing. To support this process all staff will be paid up to the date the administrators are appointed.
Osborne has faced significant headwinds common to the entire construction [industry] over the past two years, fuelled by high inflation, the lingering impacts of Covid-19 and Brexit, and a slowdown in public sector procurement. Despite these challenges, Osborne has maintained strong relationships with suppliers, contractors and staff, while delivering for customers.
To address this under-performance and protect the underlying construction business Osborne has sold its property management division, infrastructure business and offsite manufacturing arm, securing the employment of over 850 jobs. The proceeds of all three sales have been reinvested into the construction business, which has continued to deliver projects in London and the South East.
Regrettably, despite a substantive improvement in performance, the residual losses on legacy projects have undermined performance which has impacted on the ability to win new work.
Despite the management team ensuring the current business is profitable with a good pipeline of work, the business has struggled to secure the necessary investment to continue as a going concern.
Chairman Andrew Osborne said: “Everyone in the construction industry knows the challenges of the past few years and Osborne has worked hard to continue to deliver projects.
“Our management team has done everything possible to look after our people and protect suppliers, while seeking to trade through the economic headwinds. While today’s decision to move towards administration is a last resort, it is now the right thing to do while we continue to seek external investment.”
Mr Osborne, who took over as chairman of the family business in 2012, added: “Osborne has built and maintained £10bn of the nation’s infrastructure during 58 years of trading, working on homes, schools, hospitals, universities, retail and more.
“None of it would have been possible without our people, customers and supply chain.
“I thank each and every one of them.”
