A Fife rail infrastructure firm with sales of more than £17 million last year has collapsed into administration following a cashflow crisis.
Just six staff were left at Pipe & Piling Supplies Limited of Glenrothes after adverse trading conditions forced the business to lay off 10 staff in recent months.
The remaining employees have now been made redundant after joint administrators Tom MacLennan and Iain Fraser of FRP Advisory were brought in and the business was immediately closed down.
The administrators said a delay to a key contract with Network Rail was central to the failure of the firm, which also had a second operations site at Bridlington in East Yorkshire.
“Pipe and Piling Supplies Limited was a well-established provider to the rail infrastructure market and had been contracted to work on the major Network Rail infrastructure maintenance contract,” Mr MacLennan said.
“Unfortunately, after a delay in this contract the company was forced to seek to diversify its activities.
“This has ultimately proved unsuccessful, resulting in significant cashflow difficulties which unfortunately could not be resolved.
“As joint administrators we have appointed specialist construction agents to assist in reviewing the company’s remaining contracts and are focused on maximising asset realisations and debtor collections, as well as working closely with all agencies, including the Redundancy Payments Office, to ensure that employees receive every support at this difficult time.”
The piling and steel fabrications specialist was sold in a management buy-out for an undisclosed sum in 2015 to Alistair Cochrane, who had run the business for seven years as managing director. Around 70 staff were on the books at that time.
Latest accounts signed off by Mr Cochrane in June last year, show the group generated revenues of £17.85 million in the 12 months to February 28, 2017, down from £23.5m in the prior year.
Pre-tax profits in 2017 came in at £1.22m, a slight fall from the £1.42m reported in 2016.