CONSTRUCTION FIRM FACING MAJOR FINANCIAL ISSUES
One of the North East’s largest construction firms is in severe financial difficulties that have put a question mark over its future.
Gateshead firm Tolent is a £200m business which employs around 450 people. The company has been involved in some of the region’s largest recent building projects, including Hadrian’s Tower in Newcastle, the Milburngate development in Durham and Riverside Sunderland.
But the company’s construction sites closed down yesterday and some sub-contractors have removed equipment from those locations. Calls to the company’s head office in Team Valley were not being answered on Friday afternoon and the HQ was almost deserted.
It is believed the company has called in business advisors in a bid to help secure its survival. The difficulties facing Tolent come at a difficult time for the construction industry, with Killingworth firm Metnor signalling last week that it was filing a notice of intent to appoint administrators.
A high-profile survey of the sector last week said it was declining due to rising costs and lacklustre market conditions. Some of Tolent’s problems were revealed in its most recent accounts, in which turnover reached £197.7m but the firm recorded a £4m loss after what it described as a “perfect storm” of adverse trading conditions.
The loss was partly blamed on the collapse of Newcastle company High Street Group, with whom Tolent had worked on the Hadrian’s Tower scheme. Tolent has been named as one of High Street Group’s creditors in that company’s administration document, with a bad debt of £2.1m.
In July 2021, Tolent secured a £12m finance facility to help it after a challenging year, saying it had sealed the asset-based lending facility from Independent Growth Finance (IGF) to provide the working capital and the flexibility it needed to support its business.
At the start of last year the company raised a further £3.7m from existing shareholders and secured a two-year extension on its debt facilities, saying that “the group required to be refinanced in order to continue as a going concern”.
Tolent has been involved in a number of key regional developments including the construction of a new Aldi supermarket at Kingston Park, Newcastle, a £3m intensive care unit for South Tyneside and Sunderland NHS Foundation Trust.
It also carried out the transformation of the NHS Nightingale Hospital in Sunderland and last year completed the sale of its land at Seaham Garden Village to a trio of developers including Karbon Homes, Taylor Wimpey and Miller Homes.