Ardmore Construction Group enters administration

Construction group Ardmore has confirmed that several of its operating companies have entered administration following the impact of a recent court ruling linked to a historic development project.

The companies affected include Ardmore Construction Group, Ardmore Major Projects, Regeneration, Fit-out, Hotels & Commercial and Landmark.

Ardmore said the move follows a Building Liability Order (BLO) judgment under the Building Safety Act 2022, which can extend responsibility for safety defects from the original developer to related companies, in connection to the Admiralty Quarter development in Portsmouth.

The development comprises 19 residential apartment buildings, including a 21-storey tower, built between 2007 and 2009, where extensive fire safety and other defects have been identified.

Ardmore Construction Limited (ACL), the group’s contracting arm which collapsed last year, spent more than £100 million on remedial works, including £75 million funded by insurers, and was subsequently hit with a £15 million adjudication award arising from the defects dispute.

According to the company, the BLO ruling has affected client confidence, payment terms and certified values across a number of live projects, significantly impacting the construction group’s ability to trade.

The wider Ardmore Group has not entered administration but has applied for a moratorium (a legal process that provides protection from creditors while a company restructures), allowing it to continue operating while its position is reviewed.

The company is preparing an appeal after being granted permission to challenge the judgment in the Court of Appeal.

Ardmore argues the case raises wider issues for the construction sector regarding the use of BLOs and the extent to which liabilities can be imposed on group companies for historic projects.

“Our focus is now on preserving value in the wider group, protecting the continuing businesses where possible, and pursuing the appeal against a judgment which we believe raises important questions for the wider industry.”

A spokesperson for Ardmore said: “This is a deeply disappointing outcome for the construction group, its employees and its stakeholders.

“Our focus is now on preserving value in the wider group, protecting the continuing businesses where possible, and pursuing the appeal against a judgment which we believe raises important questions for the wider industry.”

Ardmore will continue to work with the administrators, employees, clients and other stakeholders during this process.

The £345.8 million Ardmore Group recently reported a £42.3 million pre-tax loss for FY2024 (FY2023: £10.7 million loss), driven by legacy project issues, remedial works, and the adjudication award arising from the Admiralty Quarter defects dispute linked to ACL.

Despite this, the group had shown signs of recovery with improving trading performance.

The group had increased its headcount by a quarter to 638, with its order book remaining “robust”, highlighted by the recent securing of a “significant contract” at the Kensington Forum Hotel.

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