A RISE in administration cases among builders such as Brymor Construction could bring the risk of “contagion” to the wider economy, an expert has warned.

All 107 jobs were saved when administrators sold the business and assets of Brymor, which built Southampton’s Horizon Cruise Terminal and had the contract for the Saints’ new gym at Marchwood.

But the sale to a new venture set up by Winchester-based Portchester Equity left £16million owed by the Hampshire-based Brymor companies to unsecured creditors, who are unlikely to see any of their money.

READ MORE: Buyer steps in to rescue building company behind Saints' new gym

Days later, the civil engineer Woodmace Ltd and sister company and Woodmace Plant Ltd also went into administration and were sold in a pre-pack deal to the business’s founder and former owner.

The deal saved more than 100 jobs at the business, which also worked on the Horizon terminal and on Southampton’s King George V dock.

Garry Lee, chair of R3’s Southern and Thames Valley region, said: “There have been a number of high-profile administrations in the construction industry over recent months.

“Insolvency practitioners are anticipating an uplift in insolvency related activity as inflation hits record levels and is expected to rise further.

“Cost pressures and shortages in materials are being keenly felt along with increasing fuel prices while the legacy of Covid continues to impact some businesses.

“Clearly, the administration of a main contractor will have repercussions in the supply chain and carry the risk of contagion to the wider economy.”

He advised suppliers and subcontractors to “prioritise contract management” to guard against payment delays and service level disputes, as well as ensuring any additional work is agreed and confirmed in writing.

“If financial problems do begin to manifest themselves, the best advice is to take charge of the situation at the earliest available opportunity,” said Mr Lee, an associate director at professional services firm Evelyn Partners in Southampton.

“The sooner advice is taken from a qualified and regulated insolvency professional, the greater options there are for a more positive outcome, whether that involves restructuring or some form of administration, voluntary arrangement or liquidation.”

READ MORE: Builder's debts of £16m to go unpaid - and staff are owed a month's wages

Administrators for Brymor Group and Brymor Construction said the business had suffered "difficult trading conditions due to the impact of Brexit, Covid-19 and cost inflation in the construction sector”.

It had been losing money in 2020 and its banker, to whom it owed £2.85m, refused further lending.

A message from the Editor

Thank you for reading this article - we appreciate your support in reading the Daily Echo.

Subscribing to the Echo means you have unrestricted access to the latest news, features and Saints coverage - all with an advertising-light website.

You will also have full access to Saintsplus, your new home for Southampton FC tactical analysis, features and much, much more.

Don't take my word for it - subscribe here to see for yourself.

Follow the latest breaking news in the Southampton area by joining our Facebook group - Southampton News - Breaking News and Incidents

Follow the latest court and crime news on our dedicated Facebook group - Hampshire Court and Crime News