HUNTLY-based Deveron Homes and Deveron Construction have entered administration after “market conditions and contract delays” caused the businesses to cease trading.
Five of the firms’ 14 employees have been made redundant with immediate effect. The remaining employees have been retained to assist the administrators to realise the companies’ assets, including four sites currently being developed in Burntisland, Keith, Kemnay and Peterhead, alongside various contracts.
Blair Nimmo and Geoff Jacobs of KPMG LLP have been appointed joint administrators. The privately-owned firms operate two service lines from their Huntly base, comprising the development of private residential homes – mainly in Aberdeenshire – and the provision of design and build contracts for housing associations across the north of Scotland.
Deveron Homes was established in 2002. The construction arm was incorporated six years later. Administrators said that in recent years, both businesses “encountered challenges and delays” on a number of development projects. The resulting costs, combined with “difficult conditions” in the sector and the wider challenges in the Aberdeenshire housing market, left the firms with “reduced margins, significant levels of debt and a lack of funding to acquire new sites”.
Following an assessment of the immediate funding requirement, the directors decided they had no choice but to place both companies into administration.
The joint administrators are exploring whether an early sale of assets can be secured.
Blair Nimmo, global head of restructuring for KPMG and joint administrator said, “Deveron Homes and Deveron Construction are well-known businesses in the north east and provide a significant source of employment in Huntly through the construction supply chain. Disappointingly, market conditions and contract delays have required both businesses to cease trading. We will do everything we can to seek a buyer who may be able to protect the businesses and maximise recoveries for creditors.
“The firms have an integrated infrastructure together with a property portfolio and various ongoing contracts. We would encourage any party who has an interest in acquiring both the businesses and assets to contact us as soon as possible. We will be working with employees and relevant government agencies to ensure the full range of support is available to all those affected.”