British construction company plunges into administration after 55 years of trading - most staff at risk

A total of 89 staff members are facing redundancy as a result of the collapse.

Administrators said challenging conditions across the construction and waste recycling sectors were the primary drivers behind the company’s failure.

In addition to its main Yorkshire base, Warwick Ward Machinery operated sites in Bromsgrove, Worcestershire, and Harlow, Essex.

Before entering administration, the company was regarded as one of Britain’s leading suppliers of earthmoving machinery and equipment used in the waste recycling industry.

Most employees are expected to lose their roles as the administration process progresses.

The business was established by the Ward family and remained under family control for more than half a century.

Over the decades, it expanded to become one of the country’s largest stockists of heavy plant machinery serving construction and waste recycling customers.

A significant change in the company’s structure took place in June 2023.

Owner-directors Ashley Ward and Matt Ward transferred the business into an employee ownership trust.

Under this model, employees collectively hold a stake in the company, a structure that has grown in popularity across British industry in recent years.

However, the transition marked a turning point in Warwick Ward Machinery’s financial performance.

In the final year under Ward family ownership, the company recorded pre-tax profits of almost £680,000.

During the same period, the business reported turnover of £51.2million.

Following the move to employee ownership, the company’s financial position deteriorated sharply.

It swung to a pre-tax loss of £1.3million.

Sales revenue also declined by 11 per cent, falling to £45.3million.

Administrators said the scale of the reversal highlighted the pressures facing the business in the months following the ownership change.

Joint administrator James Lumb said companies moving into employee ownership often take on additional borrowing as part of the transaction.

He said this debt can become problematic when market conditions worsen.

Mr Lumb said: "The additional debt that many such companies take on as part of the sale to an EOT can prove to be a burden further down the line, particularly if trading conditions become difficult."

He said the shift to employee ownership was "certainly a contributory factor" in Warwick Ward Machinery’s difficulties.

However, Mr Lumb stressed that the collapse was driven primarily by broader economic conditions.

He said: "The wider economic headwinds buffeting the construction and waste recycling sectors created unsustainable pressure on the company’s cashflow, which in turn led to our appointment as administrators."

Administrators confirmed the company explored a range of options in an effort to secure its future before entering administration.

These included attempts to refinance existing borrowing.

The firm also sought potential buyers and fresh investment.

Despite these efforts, no viable solution was found that could prevent the collapse, bringing to an end over half a century of trading for the business.

Administrators are continuing to assess the company’s remaining assets and options as the process moves forward.