The tough start to the year continues as Barnsley-based Euramax, a supplier of windows and doors into the new-build and caravan sectors has fallen into administration.
A victim itself
It has been postulated online, via LinkedIn, that Euramax was in itself a victim of the collapse of Ilke Homes.
Ilke Homes collapsed in June 2023 and owed more than 300 creditors more than £300m. Euramax were a supplier to the business and itself was owed more than £600,000, which has since caused cash flow problems at the company.
Notice of the Euramax administration posted on The Gazette
The company employs more than 200 people so will have a significant impact on the the local area, but as of yet administrators RSM UK have commented to say that no jobs have been lost yet.
The business was founded in 1950 and was originally known as Ellbee. They were bought by American firm OmniMax USA which then changed the name of the business to Euramax in 1993. Then in 2021 they were acquired by UK-based Modular Group Investments – read more here: https://www.doubleglazingblogger.com/2021/02/euramax-acquired-by-modular-group-investments/
According to the most recent accounts, profit in the last financial year had dropped to £129,000 from £579,000 in 2021. Revenue in the last financial year was £26.5m, the same as the previous year in 2021. The company debts however were over £10m with assets worth just a little over £4m, which put the company in a difficult financial position.
Domino effect
It won’t have escaped you that a number of small to medium sized house builders and construction companies have been going under in recent months. The slowdown in the housing market, caused by rising interest rates, curbed consumer spending and a cost-of-living crisis has slowed the housing market down significantly over the last 12-18 months. As a result, major house builders have been cutting back on building new homes until the market improves. This is something smaller builders cannot negotiate in the same robust manner, which means sadly there has been a steady flow of businesses falling into administration.
Ilke Homes was a big one, and went under owing hundreds of businesses £300m in total. This caused a domino effect for the rest of the supply chain. Although perhaps not immediately obvious, the effect has been to cripple other companies that supplied into Ilke Homes. For example, Homes England, a Government housing agency, lost more than £64m on the Ilke Homes collapse.
We may see more casualties in the fenestration sector due to companies in housing and construction going under. The effect isn’t immediate, as we have seen with Euramax it took nearly nine months from the failure of Ilke Homes to create unsustainable problems for Euramax. Of course no one wants to see anyone go under, but with the increasing rate of failures in the construction sector, it would seem logical that the fenestration sector will continue to see the ripple effects in the months to come.
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