ISG Causes £3m Loss for Former Subcontractor in Spring 2024
In a tough turn of events for a former subcontractor, Vitrine Systems faced a significant loss of £3 million when ISG was removed from a project in the spring of 2024. This blow came just a few months before ISG itself went into administration.
Vitrine Systems, a glazing specialist based in Hampshire, found itself in financial trouble and eventually went into administration in November. The company, with an £8.8 million turnover, was forced to cease operations, attributing its downfall to the collapse of ISG.
The administration process revealed that Vitrine Systems encountered difficulties during the Covid-19 pandemic due to project delays and slow decision-making. Despite managing to navigate through these challenges, the company faced a major setback when it lost £3 million from the project with ISG in the spring of 2024.
After this loss, Vitrine Systems managed to secure a project of similar value in Hull later in the year. Unfortunately, ISG started delaying payments on three other projects involving Vitrine Systems. As a result, when ISG went into administration, it still owed £300,000 to Vitrine.
This outstanding debt, coupled with the loss of future projects and revenue, led to the eventual closure of Vitrine Systems. The company’s assets were sold to Vitrine Glazing, a new entity established by Vitrine Systems director Maritz Naude.
Despite the sale, none of the 23 employees of Vitrine Systems were transferred to the new company. Former employees were owed £200,000, while trade and expense creditors were owed £1.8 million. Unfortunately, it is unlikely that these creditors will receive full repayment, although former employees may receive assistance from the Redundancy Payments Service.
The report from administrators Quantuma Advisory also highlighted that HMRC was owed £256,000 and Lloyds Bank was owed £140,000. These debts are expected to be repaid as part of the administration process. The difficulties faced by Vitrine Systems serve as a cautionary tale in the construction industry, where unexpected events can have far-reaching consequences.