ISG UK subsidiaries apply for administration
Six subsidiaries of ISG, the UK's sixth largest construction firm, including ISG Construction, have requested to go into administration.
After months of ongoing speculation that peaked online in the last few days, the subsidiaries of the £2.2 billion contractor submitted court applications this afternoon.
So far, ISG Limited, the parent company, has not filed a court application.
The six firms that have sought administration are: ISG Construction Ltd, ISG Engineering Services Ltd, ISG Retail Ltd, ISG Jackson Ltd, ISG UK Retail Ltd, and ISG Central Services Ltd.
The financial statements for ISG Construction for the year ending 2022 were submitted last year, revealing a revenue of £544.7 million and a net profit of £3.2 million.
ISG Retail Ltd reported a revenue of £550.7 million for 2022, along with a profit of £28.2 million.
ISG Engineering Services reported a profit of £10.9 million from revenues totaling £177.8 million. In contrast, ISG Central Services experienced a loss of £10.3 million on a revenue of £58.7 million.
ISG Jackson Ltd was not required to submit complete financial statements, whereas the sixth company to request administration, ISG UK Retail Ltd, has not submitted any financial records since 2010.
The parent company, ISG, postponed the release of its financial statements for 2023 while waiting for the sale to be finalized.
Construction News has learned that employees at multiple construction sites have been notified that the company has ceased operations and have been directed to vacate the premises.
The company has been on the market since July. The owner, Cathexis Holdings from Texas, stated at that time that a sale was "almost completed."
The reason for the postponement of the sale is not yet known.
For months, there have been persistent rumors about the company having difficulties meeting its financial obligations to its subcontractors.
Another indication of problems arose on Monday when Alandale Logistics, one of the company's suppliers, submitted a petition to liquidate ISG Engineering Services Limited.
A winding-up petition is a way for creditors to force a company to pay back a debt that exceeds £750. If the petition is approved, the creditor has the right to hire an insolvency practitioner who will handle the process of shutting down the company.
A representative from ISG indicated that the contractor had settled the disagreement. However, as of this morning, the High Court informed CN that the case remains active, with a hearing scheduled for in person on September 30.
Last year, ISG had to refute completely false rumors regarding its financial stability after experiencing setbacks on two of its most notable projects.
In January, several months later, Matt Blowers, the CEO of ISG, departed from the company, pointing to the necessity for a “complete overhaul.” He was succeeded by Zoe Price, who had been serving as the chief operating officer of ISG.
Karen Booth, the chief financial officer of ISG, has announced that she will be resigning in March.
Because of its late financial reports, ISG maintained its sixth position in the latest CN100 rankings.
The financial statements revealed a decline in pre-tax profits, dropping over 33% to £11.5 million, down from £18.5 million. Additionally, cash reserves decreased by more than 10%, falling to £104.7 million from £119.9 million.
The company announced that it had no debt at that moment, and its future orders for the construction sector increased significantly to £1.32 billion.
ISG has a presence across Europe and in the UAE, but it noted that over 80 percent of its projects in 2022 were focused in the UK.
ISG and Alandale Logistics have been reached out to for their input.
Attempts to reach ISG's press office this evening were met with silence, as there was no response or follow-up.
