Uncertain future for projects after firm collapses
A NUMBER of major construction projects across South-West Wales face an uncertain future after a well-known firm collapsed into administration.
Bridgend-based Jehu Group, which operates across South Wales and the south-west of England, announced the news last week and said it was a “truly devastating day” for the company, which was founded in 1935.
The family-run and owned firm has ceased trading, blaming the situation on spiralling construction costs, with inflationary pressures decimating its cash reserves.
In a statement, the company’s directors Marc and Simon Jehu said it had been hindered by fixed-price contracts it had struck before the pandemic, with profit margins being wiped out by construction cost inflation spiralling by more than 25%.
They added that they had “completely exhausted every possible option” to keep the business going, but “found themselves with no choice but to cease trading”.
“We did everything possible to avoid closure,” they said. “But we were fighting a battle that simply couldn’t be won due to the successive economic shocks of the past couple of years.
“Our thoughts are first and foremost with our devoted colleagues who have lost their jobs, many of whom have given more than 25 years of service. We would like to thank the loyal and steadfast clients and supply chain who supported us, often carrying the added burden of those who sought to capitalise on our difficulties.
“We understand this is a worrying time for our colleagues, supply chain partners, and customers. We are working with [administrators] Begbies Traynor to get the best outcome from an impossibly difficult situation.”
Before falling into administration, Jehu Project Services had 15 live contracts delivering construction and development projects for housing associations and local authorities in Wales and south-west England, with a remaining total value in excess of £100m.
Many of the Welsh projects, which have cost millions of pounds, have now been paused, with clients faced with a difficult decision as to how best to get the projects over the line.
One of the affected developments in Wales is Pen Y Porth in Burry Port.
This development is being built over three phases, with the first residents moving in last year. A total of 105 homes are being developed on the site, in conjunction with Pobl, with a mixture of two-, three- and four-bedroom homes being built.
The houses were built on land adjoining the former Gwdig Hotel in the town, which had been derelict for a number of years. When plans for the development were first announced, a number of objections were lodged by residents, with some claiming it would “ruin the area” and put a strain on local services.
The first homes were released for sale in the spring of 2021, with the second phase of the operation completed in March 2022. The development is currently in its third and final stage, with more than 70 residents living on the site.
Pobl Group said that while they would continue to assess the impact that Jehu entering administration would have on the developments, they also reassured customers living on-site that they will “do all we can to minimise any disruption”.
“This includes, where necessary, our in-house trades team picking up responsibility for any issues that may occur while new homes are still within the standard ‘defects’ period,” they added.
“We will also be prioritising customers who were scheduled to move into their new homes over the coming days and weeks, and will be liaising directly with them to resolve their situation.”