Plymouth-based URBN Construction is now in liquidation after becoming insolvent and owing debts of around £2.5 million, with the majority of creditors expected to receive nothing back.

The company ceased trading in May 2021, and it was revealed from documents filed at Companies House, that some 182 claims had been made and most of these were from other firms in the construction industry.


Preferential creditors will receive little repayment

URBN Construction only had £44,400 in assets, which will be insufficient to meet its debts. Creditors include HMRC, which is owed £345,687 but will receive only a small proportion of this, despite being a preferential creditor. The 20 former employees are also not expected to receive any of the £65,262 which is due to them.

The majority of debts are owed to unsecured creditors, most of them based in Plymouth and the South West. These include new homes’ developers, mechanical and electrical services firms, a kitchens’ supplier, and a builders’ merchant. It was also revealed that URBN had benefited from government loan support during the Covid-19 lockdown but the amount of this was not stated.

URBN had been involved in a number of major projects including the City Arcade development in central Exeter and had been due to work on a 153-bed student housing block in Bristol, but this had been put on hold.

Construction firms remain at risk despite boom

Simon Renshaw, director with Company Debt, comments: “The number of construction firms either entering administration or liquidation continues to grow and this can appear to be at variance with the fact that the UK is experiencing a construction boom. There is growth, in particular with housing, but this has always been a volatile sector with projects being delayed and late payments – smaller firms can be particularly vulnerable. 

“Too often, cash flow problems mount up quickly and there are also now additional pressures in terms of labour shortages and supply chain issues affecting materials.

“This means that if a construction company has worked, they may not be able to do it effectively. Now things are becoming even more difficult, with government loans needing to be repaid and creditors once again able to petition to wind a business up. 

“Unfortunately, there is also often a knock-on effect when a construction firm fails in terms of contractors and suppliers. Tight credit control is a must if risks are to be minimised and until there is more stability in terms of wider market conditions, we can expect to see more failures.”