Up to 200 jobs could be lost after Belfast-based civils and construction firm Lagan Construction Group announced that four of its subsidiary companies are going into administration.
Lagan Construction Group Holdings, Lagan Construction Group Ltd, Lagan Building Contractors and Lagan Water will immediately enter administration, affecting 200 jobs. The Group has 800 staff in total.
Lagan hopes some of the 200 affected jobs will be transferred within the group or taken on by some of its joint venture partners. The group’s other 26 subsidiaries include FK Lowry Piling, which won £3.6M of piling work on the Thames Tideway scheme last year, and Dew Piling, and these continue to trade as normal. Other subsidaries trading as normal include Lagan Construction Limited and Lagan Construction Aviation Limited.
Lagan Construction Group chairman Michael Lagan said the group’s civils and building divisions had suffered from project delays and instability caused by one of its joint venture partners in Great Britain.
Lagan said contractual disputes on some major projects had helped push four of the group’s 30 firms into administration. The administrator is KPMG.
He said: “It is with great sadness and reluctance that we have had to take this course of action. We have had long standing relationships with many sub-contractors and suppliers. We hope that the process of administration will be smooth and that disruption to both projects and jobs will be minimal”.
Construction Employers Federation managing director John Armstrong said “Given the huge contribution that Lagan Construction Group have made to Northern Ireland’s economy and society since their establishment, today’s announcement is extremely regrettable. They have been a pillar of our construction industry for decades and it is our express hope that a solution can be found.
“As the Federation has long said, the industry has faced a challenging period in respect of its sustainability. From issues related to low margins on works, to insufficient pipelines of activity, to the current political and budgetary challenges within Northern Ireland, there are significant tests which go much beyond today’s news. These must be matters of concern to anyone who wishes to see a healthy and vibrant Northern Irish construction industry given its critical role in delivering jobs, economic development and growth.”
Pictured is the £500M, M8 M73 M74 motorway improvements project in central Scotland, of which Lagan Construction Group is a main contractor in a joint venture with Ferrovial and Amey.
The firm is separate to Lagan Group, whose subsidiaries include Whitemountain. Construction materials group Breedon yesterday confirmed that it was talks to buy “a substantial part of the Lagan business” - referring to Lagan Group, rather than the Lagan Construction Group above. A statement from Breedon said: “There can be no certainty that the possible acquisition will proceed, nor as to the terms of the possible acquisition. A further announcement will be made as appropriate.”
Lagan Construction Group factfile
- The group was established in 1962 by Peter Lagan and had its roots in quarrying, before it expanded into civil engineering.
- For the 2016 financial year, records reveal Lagan Construction Group Holdings Ltd made a £7.6M profit before tax on a £225.6M turnover.
- In 2010 the group of Lagan companies separated, and Lagan Construction Group is now led by Michael Lagan as chairman, and his son Kevin as chief executive.
- Two brothers, Kevin and Michael Lagan, ran the firm prior to the 2010 separation. The separation followed a legal dispute between the brothers.