According to the Insolvency Service, more than 4,300 construction companies went out of business in between November 2022 and October 2023. This number is the highest since the financial crisis of 2008/09. As a result of these insolvencies, many projects were left unfinished and clients were left with potentially unsafe and incomplete sites. Martin Vella, Managing Director of Pexhurst, discusses the importance of sensible and structured financial management.
While there were around 99,000 construction contractor firms in the UK in 2023, recent figures released by the Begbies Traynor Red Flag Alert report have indicated that 5,919 construction companies were in critical financial distress in October of that year, up 46% since July 2023.
The Covid pandemic, combined with weaker consumer confidence, inflation and interest rates, has enhanced the pressure on all UK businesses, with the construction industry being no exception.
Often, business owners turned to loans at rock-bottom rates as a way of preventing their company from going bust. As a result, many needed government support during the pandemic; now, due to higher interest rates and high inflation, they are heading down a difficult and potentially disastrous path.
While the past few years have been challenging for many, Pexhurst has remained financially stable and secure. As a company that focuses on providing outstanding customer service, Pexhurst offers full transparency and works closely with clients from the very start of projects to ensure sensible financial management.
The success of the company’s finance management isn’t just down to Pexhurst’s experienced finance team; it’s a team effort, ranging from the management team to the in-house buying team, contracts and commercial managers.
Thanks to proven financial management and organic, structured growth, Pexhurst is able to consistently fund any fit out or refurbishment projects it’s involved in. Additionally, if any bonds are required, the company works closely with a leading insurance company and has no difficulty obtaining them despite the difficult financial market.
Robert Vincent, Commercial Account Manager at Dixons Commercial Insurance Brokers, said: “We’ve acted as the insurance brokers for Pexhurst since 2008. During that period, we have seen Pexhurst grow significantly as a construction business specialising in the refurbishment of commercial assets.
“As Pexhurst have multiple contracts with performance bonds in place at any one time, it is a testament to their financial strength that we have been able to provide a significant guaranteed facility with Aviva Insurance UK PLC.”
With so many construction firms struggling financially due to high interest rates and inflation, it’s important to rely on a company that focuses on financial management policies and prides itself on financial stability. Pexhurst does exactly that.