Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: jasonl on September 07, 2010, 01:30:36 pm
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Been cleaning common areas for them , they are 3 months late with money , got an E-mail last week saying I will be paid today , Nothing! Just heard they may be going under. £4622 owed to me :-[
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Brother in Law's friend gets a lot of sub contract work from
them laying flooring.
Think he's out to the tune of about £60,000 to them, some of that's
materials.
John
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Yes me too two guys from biking have also been layed off with no money..Dont think they will get any money either now.
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This is tragic for those small businesses like ourselves and employees of those companies, but there could be worse to come having trawled the net about Connaught.
The failure of the firm will set alarm bells ringing among other companies reliant on government contracts. Schools IT company RM Group has recently said that contracts worth £200m are at risk due to the scaling back of the government's school building programme, while the construction firm Balfour Beatty and Cable & Wireless have also warned about the impact of spending cuts. According to figures published last month, the number of firms going bust in the health, social services, education and defence sectors has increased by almost 50% this year.
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on the news tonight that connaught are going into administration so they probably will never see their money
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on the news tonight that connaught are going into administration so they probably will never see their money
Cheers for that ::)
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Social housing firm Connaught, which employs 10,000 people, has gone into administration after failing to raise extra funding from lenders.
The FTSE 250-listed company announced it was in the process of appointing KPMG as administrators after it earlier suspended trading of its shares.
Connaught said talks with lenders and investors on additional financial support had "failed to reach a satisfactory conclusion".
In a statement the firm continued: "Following extensive discussions with the group's secured lenders, it is now clear that sufficient support would not be extended to the group as a whole to enable it to continue trading as a going concern.
"As a consequence, the board is saddened to announce that it is in the process of appointing partners from KPMG as administrators of Connaught plc and its subsidiary, Connaught Partnerships Limited, which comprises its Social Housing Division."
The company's other main subsidiaries, Connaught Compliance, National Britannia Holdings, Fountains and Connaught Environmental, are not being placed into administration.
Coming from the North East of England, I feel a great empathy with people who find themselves the casualties of industrial strife.
The Exeter-based repair and maintenance specialist has been in turmoil since it warned in June that Government spending cuts could blow a £200m hole in revenues.
The firm has around 180 multimillion-pound social housing contracts in the UK.
Royal Bank of Scotland recently provided Connaught with a further £15m in an attempt to keep the group going, it has been reported.
Sir Roy Gardner, who recently became chairman of the company, had also attempted to put together a rescue plan with the help of several new directors.
Until their suspension, the company's shares had fallen by more than 90%.
The fall came after the warning in June that it had identified 31 projects where spending will be delayed as a result of austerity measures.
Founder Mark Tincknell left the company earlier this year on health grounds
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Get your application into the administrators asp for unpaid money.
They might offer you 10p in the £ at which point it's your choice to take what's on offer or see it out and hope.
Previously when we did commercial work and payment didn't arrive by the next clean (30 day account) the next clean didn't happen. I've dropped some quite lucrative commercial work because payments either got later and later or sparodic.
I don't like writing off £40, the thought of £4,000 would result in me visiting either main office or sites and depositing enough staining products all over the carpets to make me feel better.
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We work for Connaught via one of their contractors.
We were quite busy with them until April with Social Housing projects and had 20 + property's provisionally booked back then but none of them have been called on.
This explains a lot, I have to admit that alarm bells have been ringing since the new Govt got in and announced massive cuts on social housing projects etc.
I just hope that a satisfactory solution can be found for all concerned, especially the firm we sub to.
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If feel quite safe my deal is with their environmental side, hope RBS put the money in that side of the business
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Your right Len, if your business is with the 'Enviromental' side of Connaught aka their cleaning division, it's still trading... at the moment. Every separate company is a legal entity in it's own right but I bet they share the same bankers as the main divisions which have gone 'pop'. If you read the Pink Papers, banks have their own problems at the moment with changes to the cash they have to hold to cover their loans. (which is why all businesses are being screwed to reduce borrowings and / or pay a lot more for them) so they will be dumping Connaught off as soon as their money is guaranteed. Look for a pre-pack / CVA or some other white-feathered way they (the banks) can come out of it with minimal losses.
Personally I watch all these 'big' companies pitching for work at margins which just don't stack up because it squeezes the company I work for but if your're their client would you refuse the'savings' they offer on your cleaning bill? ..... especially if it's multiplied by 10 stores .... 50 stores .... 100.. to Tesco land and beyond etc.? .... even if it only lasts for a year or two.
What can we do as business people? Personally I believe in specialisation, exploring niches and making sure that no customer represents more than 20% of your gross profit. (if anyone wants a true definition of GP e-mail me as it's something I have tried to teach for 40 years!) If you want to 'gamble' on a hunch or new idea, that's fine, as long as you can afford to lose your time and money investment as if it was a chip on a gambling table without affecting your core business.
Sorry if I come over as a Mr Grumpy preaching but when you feel strongly about something and you don't want others to be burnt in their enthusiasm to grow their businesses. You have to stand up and say something.
Best of luck to everyone. In unity their is strength.
phil.dixon@newlifecleaning.com
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On the bright side, when the owners by the company back cheap and carry on as normal, they will probably offer you more work when it picks up. >:(
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Doubt that will happen as there market has already dried up and that will only get worse over the next few years. They also run Safecontractor and I have just sent off my annual subscription. Be interesting to see if that continues, think it will.
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I see they were bought today and the administrators were picky who they sold it to, so there may be hope for all who are owed.
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Think they have cherry picked the best bits. Doubt they've bought the debt will probably trade under new entity.
http://www.bbc.co.uk/news/uk-england-devon-11257374
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I have not been paid yet , I have been told to expect a letter within 14 days setting out how to claim my money , I have written it off in my head .
The good thing about carpet cleaning is that this work owes me about £1000 in diesel and other costs , plus my time. If I had supplied good with a lower Gross profit then I would be really worried
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hi there,
i think this is a whole lot deeper that the CUTS, it does appear that there have been some management/commercial issues aswell.
we can all go down the market and sell £10 notes for £8 all day every day, but eventually you will run out of £10 notes to sell.
yes the maraket has tightened, no doubt, but that was always going to happen irrespective of the colour of the government, either this year next year or the year after.
there is work out there, and the properties will still need work doing on them.
i understand the Mears and ROK are circling for some of the contracts, therefore it might be worth a punt to approach them, Morgan Sindall have purchased a chunck of the business i undrstand.
good luck
regards
martin
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I tried selling £10 notes for £8 on my estate, but they were still too expensive.
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Keep your eyes on a company called Travis Perkins. Tread with care
Matt
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The pressure on troubled Connaught intensified as a key London council terminated its £7million-a-year contract to maintain 15,000 local authority homes.
Barnet Council is winding up its contract 13 months early, in February next year, in the first cancellation to emerge since Connaught's shock profits warning in June.
It is concerned the loss of confidence means Connaught will be unable to perform its duties properly.
Builders' merchant Travis Perkins revealed it is owed money by Connaught
In an internal memo Barnet Homes said: 'Connaught's ongoing problems with its supply chain are jeopardising our ability to provide an excellent repairs service. This is an absolute priority for us and we cannot allow these issues to continue.'
The contract loss came as builders' merchant Travis Perkins revealed it is owed money by Connaught (down 1.9p at 12.4p).
Travis Perkins finance chief Paul Hampden-Smith told Construction News: 'We have a significant exposure. We are having discussions with Connaught, but these are confidential.'
Concerns about Connaught's future viability have mounted in the past two months as it has issued three profits warnings, its chief executive and finance director have resigned, and its share price has lost 95 per cent of its value.
Basically they were under quoting for contracts even to a negative balance, coupled with suppliers wanting paying upfront.
Unsustainable.
Martin 8)
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Hi
There is an excellent piece in the Sunday Times today on Connaught.
Martin 8)
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I am sure someone over on the general cleaning forum mentioned them being in trouble earlier in the year, couldnt get paid or were very slow in being paid.
I was asked to do some carpet repairs after their plumbers had damaged carpets while installing new boilers in town near me but after reading that I declined the work. Glad I did now.
Murky
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Martin
The article in the S/T just goes to show how auditors can be persuaded by forceful management & the fear of loosing an account, to accept over-creative accounting. To the extent that even the city was fooled for some time.
At the end of the day Price Waterhouse Coopers will get an admonishment - having collected their not insubstantial fees & the company's suppliers & contractors will walk away out of pocket - let alone the share holders who rely on auditors reports
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hi there
the pressure on the accounting mechanisms is sometmes created by the clients tendering guidelines,
the client may determine that a potential supplier needs a set of accounts that show a company of a particluar size ad stature to be able to carry out a contract of a set value. therefore the accounting policies are adopted to create that situation,
we look at small tenders, and have recently worked for Wates, and as part of the process, there questionnaires want full dislcosure about the business, so they can determine whether yout fnancial base is capabale of the work you are bidding for.
the councils and social housing companies have ben driving prices down and down to the detriment of the client, and the supplier, irrespective of the trade involved. they have then written into their budgets, connaught contrat values. they have now gone, and new suppliers will enter the market, BUT some have already said they will only contract at the correct price point. this will then apply an upward pressure to their budgets, which at the same time are facing cuts in the spending review.
all round a mess !!!
regards
martin
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three accountants applying for the same job. All were told that they all had identical qualifications and experience. They were each to be asked the same question one at a time and one would be chosen.
The question: what is 2+2?
First accountant's answer "Four"
The second " the answer definitley lies between 3 and 5"
The third "What answer would you like?"
Guess who got the job? ;D
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Old ones are the best Rog ;D
Sitting in a compartment on a train were the tooth fairy, an expensive accountant and a cheap accountant. On a table between them was placed a briefcase full of money.
Suddenly the train entered a tunnel and everything went dark. When the train exited the tunnel and the light returned, the briefcase was gone.
Who took the briefcase?...
Well, it's obvious really. It had to be the expensive accountant as there's no such thing as the tooth fairy or a cheap accountant!
Shaun
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Unfortunately this downward spiral of rate cuts is affecting many sectors. The insurance industry is another example. The big companies are now hiring procurement companies to do their bidding and it is becoming rediculous. One big franchise is now cleaning carpet and upholstery on hourly rate, £18 per hour. One example I was told last week was cleaning 3 carpets after a minor fire - £38 :o :o
Absolutely rediculous. It doesn't represent one iota of the risk involved. You could be working on a 6k suite and get £38. I can't understand why they are doing it.
Also a lot of the building companies are telling me they are wasting time attending site, doing a full spec then being told the loss adjuster has cash settled.
I am hearing more and more things each day in the media and to be honest I am fearful of what is going to happen next year. Speaking to a mate last week who's sister is a policewomen. She told him they are all having extra intensive riot training because of perceived civil unrest.
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Hi
Now this has happened it makes you wonder what else will turn up?
Is connaught just the tip of the iceberg?
Martin 8)
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I dont know , but no-one is getting more than a grand in credit from me!
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Things will get worse I'm afraid.
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I'm buying candles in bulk to sell over the winter of discontent. When you got lemons .......
The cuts will lead to loads of 'safe' jobs going in the public sector. Police, firemen, nurses. They account for a third of most of peoples work I suspect.
Unless you specialise in city broker penthouses, expect a rough ride.