A North East cladding company has entered administration, leading to job losses and halted operations.
- Pressed Steel Products Group Ltd (PSP Group) attempted to refinance but had to call in administrators from Interpath Advisory.
- The company had invested in new technologies right as demand for cladding fell sharply.
- PSP Group has multiple registered firms also in administration, impacting aluminium facade and frame manufacturers.
- Efforts are underway to find a buyer for the firm amidst significant challenges faced by the construction sector.
Pressed Steel Products Group Ltd, a County Durham-based cladding specialist, has ceased trading and appointed administrators after a failed attempt to refinance the business. This move has resulted in an undisclosed number of job losses. The administrators, Interpath Advisory, reported that the company had made significant investments in advanced manufacturing technology, which coincided with a steep decline in demand for cladding.
The PSP Group’s administration extends beyond just the main company, as three related entities have also entered administration. These include PSP Architectural Ltd and PSP Aluminium Ltd, which were primarily involved in the production of aluminium facades, cladding, and various architectural components. The third firm, Pressed Steel Products Ltd, owned valuable freehold properties used for manufacturing purposes.
Interpath is actively seeking a buyer for the PSP Group, although some redundancies have already been executed. Administrators James Lumb and James Clark were appointed on 20 September, and they are tasked with managing this challenging transition.
James Lumb, the managing director at Interpath, cited widespread challenges in the UK construction sector as contributing to PSP Group’s struggles. Despite a favourable market sentiment driven by government policy and interest rate cuts, a lag in sales has significantly impacted the building products segment. “The business had invested heavily in state-of-the-art equipment and IT solutions but was unable to withstand soft demand in the short term,” Lumb explained.
Recent records show that for the year 2022, PSP Aluminium maintained net assets of £504,000, employed an average of 21 staff members monthly, and had £60,700 in bank loans due within twelve months. PSP Architectural reported net assets of £854,000, with an average of 65 employees, bearing £180,000 in bank debt due within one year.
Interpath has expressed commitment to assisting employees affected by the administration, offering support to make representations to the Redundancy Payments Service.
The administration of PSP Group highlights significant challenges within the UK construction sector, driven by economic and market factors.
