Urban Splash House, a former disruptor in the construction industry, is entering a creditors’ voluntary liquidation (CVL) phase, marking a crucial stage in the insolvency process.
- The company’s transition to CVL could result in suppliers receiving some of the owed payments, although the timeline remains uncertain.
- Urban Splash House, originally a joint venture with significant investments from Sekisui and Homes England, entered administration in 2022.
- Operating issues at its Alfreton factory were pivotal in the company’s collapse, with a reported pre-tax loss of £3.7 million in 2020.
- The larger context of the modular construction industry’s struggles is underscored by other recent market developments.
Urban Splash House, once heralded as a transformative force in construction, is now undergoing a creditors’ voluntary liquidation, following its collapse into administration over two years ago. This new phase could mean the company’s creditors, particularly unsecured ones, might soon see a distribution of funds. However, the exact timeline for these payouts remains unclear, reflecting the broader uncertainties inherent in liquidation processes.
Originally spun from Manchester-based developer Urban Splash, the company had substantial backing from Japanese corporation Sekisui and the governmental body Homes England. Despite these investments and its promising start, the firm recorded a significant pre-tax loss of £3.7 million against revenues of £4.7 million for the year ending in September 2020. Administrators from Teneo Financial Advisory took over in May 2022, aiming to secure a better outcome for creditors than an immediate liquidation could have provided.
With the process now extending into a creditors’ voluntary liquidation, financial advisory firm Begbies Traynor’s Julie Palmer notes that such developments are not uncommon within the constraining environment of the construction sector. The liquidation process potentially allows a focused attention towards repayments for unsecured creditors, although the precise duration for achieving this distribution remains undetermined.
A recent report from Teneo, filed at Companies House, confirmed the absence of secured creditors within the two companies under administration: Urban Splash House Ltd and its holding counterpart. Interestingly, there are sufficient funds projected to address claims against the holding company fully. Yet, the total claims already surpass £25 million, highlighting the complexity of the insolvency scenario Urban Splash House finds itself in.
This company’s downfall is, in part, attributed to operational hurdles encountered at its Alfreton factory, a setback profound enough to derail the business. These challenges occurred against a backdrop of broader industry struggles within the modular building sector, characterised by several collapses and setbacks among peers.
Notably, the modular construction landscape is marred by instability, with many companies experiencing similar predicaments. Recently, modular homebuilder TopHat suspended activities at its significant South Midlands site due to market conditions, and Beattie Passive halted operations following intentions filed to appoint an administrator. The House of Lords Built Environment Committee has expressed scepticism regarding the government’s strategic approach to modular construction, echoing concerns that reverberate across the sector.
The shift towards liquidation marks a significant moment for Urban Splash House, as it navigates the complex terrain of creditor settlements amidst industry uncertainties.
