Jehu was one of Wales鈥� leading construction and development businesses, specialising in the social housing sector. It has fallen victim to agreeing fixed price contracts without the benefit of a crystal ball to foresee a global pandemic and rampant build cost inflation
Begbies Traynor has been engaged to assist the directors in placing the companies into administration.
104 employees across the companies have been made redundant with effect from today, with five members of staff being retained to assist the directors with their duties.
Jehu Project Services had 15 live contracts with registered social landlords (RSLs) and local authorities in Wales and the southwest, with a total remaining value in excess of 拢100m.
Waterstone Homes was delivering a further two contracts for RSLs.
The Bridgend business was established in 1935 by Jack Jehu and has remained family-run since across three generations, with a fourth generation also becoming part of the workforce. Delivering fixed-price contracts with single digit margins that were agreed before the pandemic, the group鈥檚 cash reserves have been decimated by cost increases in excess of 25%.
Most recently filed accounts show that in the 18 months from 1st April 2019 to 30th September 2020, Jehu Group made a pre-tax loss of 拢4.0m on turnover of 拢111m.
Huw Powell, managing partner at Begbies Traynor in south Wales, said: 鈥淭his situation underlines the crushing impact of the current inflationary environment on an established and successful business. Pre-pandemic, the group was highly profitable and by 2019 had almost 拢7m in net assets. It continued to win high profile projects and was an award-winning business. However, delays in completing projects caused by the pandemic and subsequent cost increases caused a severe cash-flow crisis that it could not recover from, despite support from key stakeholders.
鈥淚t is hugely disappointing to see the group cease trading in these circumstances and highly regrettable that efforts to secure its future were unsuccessful, where the current political and economic turmoil counted against them. We are aware of the negative impact that this will have on the supply chain and hope that subcontractors will be able to work with the group鈥檚 customers to find the best possible solutions to complete existing projects.
鈥淔rom our interactions with staff whilst we have provided advice to the group, it is clear that they remained loyal to and were proud to work for the business. Employees are of course devastated by today鈥檚 news, and I sincerely hope that their track record of delivering successful projects will stand them in good stead to gain new employment quickly.鈥�
Jehu co-directors Marc and Simon Jehu said: 鈥淭his is a truly devastating day for the business started by our grandfather over 85 years ago. Every possible option to keep the business alive has been completely exhausted and it with desolate hearts that we find ourselves with no choice but to cease trading. We did everything possible to avoid closure, but we were fighting a battle that simply couldn鈥檛 be won due to the successive economic shocks of the past couple of years.
鈥淥ur thoughts are first and foremost with our devoted colleagues who have lost their jobs, many of whom have given more than 25 years of service. We would like to thank the loyal and steadfast clients and supply chain who supported us, often carrying the added burden of those who sought to capitalise on our difficulties.
鈥淲e understand this is a worrying time for our colleagues, supply chain partners and customers. We are working with Begbies Traynor to get the best outcome from an impossibly difficult situation.鈥�
Begbies Traynor invites creditors with urgent queries to email jehugroup@btguk.com.
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