HB Projects: Collapsed Bradford business owes over £11m, administrators reveal

The firm was originally set up in 1998 and worked with blue-chip retail companies as principal contractor on schemes such as new build shops and refurbishing existing premises.

A new report by administrators Begbies Traynor has revealed the firm has outstanding debts of more than £11m to a variety of creditors.

It said problems for the firm had begun when the company had suffered losses of a combined £2m on three key proje cts in 2022.

It said: “The losses were caused by a number of factors including items missed when tendering the schemes, poor procurement of packages by commercial staff, poor delivery of the projects and poor client management.

"These losses had an immediate impact on the company’s cashflow forecast.”

In April 2023, the company reached out to shareholders for short-term funding support and also agreed a payment plan with HMRC. It cut staff numbers from 138 to 108 by not replacing departing employees and administrators said that in September 2023 “could see a path to a positive ye ar-end result”.

But in October, £4m worth of project sales that had been expected to go through before Christmas were either cancelled or delayed.

After attempts to save the business failed, the company appointed administrators and ceased trading.

The administrators’ report said that just over £4m is owed to suppliers and it is currently expected there will be “insufficient funds” to repay anything to them as unsecured creditors once the administration process is complete.

The same position applies to £1.2m owed to staff in regards to wage arrears, redundancy and pay in lieu of notice, as well as £102,000 owed to directors. A further £207,000 is corporation tax owed to HMRC is not expected to repaid.

The company also owed an extra £3.39m to HMRC connected to liabilities such as VAT and National Insurance Contributions.

Administrators said some but not all of this money should be repaid.

The final amount recovered will be dependent on administration costs and realisations from the company’s book debts.

In 2018, the firm underwent a management buyout and a restructuring which included having subsidiary companies called HBMS Cladding and Onyx Project Services in its group. Those two firms have continued to trade.

Shares in Onyx were sold in December for £500,000 to Omnia Group Holdings and Christopher Clarke, who is security trustee for loan note holders who were owed £3m at the start of the administration process.

That figure has now been reduced to £2.5m as part of the Onyx share deal.

Administrators said they are in talks with two interested parties about the potential purchase of HBMS shares and that any further distribution to these creditors is dependent on a successful sale.

The report said that it is anticipated there will be a shortfall in the amount that can be recovered.