The firm responsible for M&E work during Grenfell Tower’s refurbishment has filed for administration.
The move means that Birmingham-based M&E contractor J.S.Wright & Co, which became an employee-owned trust in 2021, is set to stop trading after 135 years.
The firm was appointed by Grenfell’s main contractor Rydon to carry out the M&E works during the refurbishment of the tower carried out in the years before the fire.
However, it subcontracted the installation of the smoke extraction system to another firm, PSB UK Ltd, and the Grenfell Tower Inquiry did not reach a firm conclusion on the role of that system in the 2017 tragedy.
The inquiry did not level any criticism at J.S. Wright & Co or any of its employees.
J.S.Wright & Co had an average of 160 staff and made a £510,000 pre-tax profit from revenue of £41.8m in its most recently reported financial year, which ended in 29 April 2023.
According to its website, the company was founded in Birmingham in 1890 by plumber John Shivlock Wright and was “at the forefront of tackling the city’s Victorian slums, bringing the benefits of clean air, pure water and affordable hearing to homes schools and factories”.
More recently, the group has delivered building services in major residential and commercial schemes. These included the 37-storey Nine Elms Point and the 31-storey Indescon tower in London, and phase one of the £700m Paradise Birmingham scheme.
In its most recent accounts, directors said the company “shared many of the same challenges reported by its peers, namely, project start date delays, project programme slippage and significant cost inflation”.
These problems were likely to continue in the next financial year, they added.
Directors foresaw a “significant upside” from the secured order book until April 2025.
But the firm informed Companies House last month that it was extending its latest accounting period by five months to 30 September 2024.
Construction News contacted J.S.Wright & Co for further information.
The 2022/23 accounts showed that the firm’s cash in hand decreased from £5.7m to £850,000 in its 2022/23 financial year, with its auditor MacIntyre Hudson saying there was a “material uncertainty” about the firm’s future as it had a “likely shortfall in working capital”.
The auditor said: “In order to mitigate this, the group obtained a loan of £1.35m from its former shareholders in April 2024, alongside agreeing a covenant compliance waiver and capital repayment holiday with its bank lenders until May 2025.”
“Management is of the opinion that these arrangements will enable the group to meet its working capital requirements through to a period where volumes and profitability are expected to return the group to positive cash inflows.
“The forecasts prepared by management to support this view include a number of assumptions, judgements and estimates and there is an inherent risk that certain of these may not prove to be accurate.”
J.S.Wright & Co’s sister company Wright Maintenance has also filed a notice of intention to appoint an administrator.
The company was too small to provide details of its profit, turnover or staff levels in its 2022/23 financial year.
The phase two report of the Grenfell Tower Inquiry investigated the performance of the building’s ventilation system on the night of the fire, but said “given the nature and scale of the disaster that evidence, which is mainly derived from the condition of the dampers and fans after the fire, is inevitably of limited value”.
“Unfortunately, it does not enable us to draw any reliable conclusions about how the system performed during the fire or how it would have performed under the circumstances for which it had been designed.”
