Ardmore Construction Group entered administration on Thursday after concerns over potential liabilities connected to historic residential developments severely affected its ability to secure new contracts, ultimately leading to a cash flow crisis.
The move followed growing financial pressure within the business, with major London construction sites closing as the group sought court approval to enter administration after failing to meet payments to employees and subcontractors.
Companies affected by the administration include Ardmore Major Projects, Ardmore Hotels & Commercial, Ardmore Regeneration, Ardmore Fitout and Landmark Facades. More than 500 employees are expected to be impacted by the collapse.
The failure of the contractor, which generated annual turnover of approximately £350m, has left several prominent projects across London without a clear delivery path. Clients are now seeking replacement contractors to complete schemes that were underway at the time of the administration.
Ardmore was delivering around 10 major developments across the capital when it ceased trading. These included luxury hotel projects in Mayfair and Kensington, residential tower developments and a major life sciences laboratory campus at King’s Cross.
The administration follows years of efforts by the group to manage liabilities associated with residential schemes that have required significant fire safety remediation work in the wake of regulatory changes introduced after the Grenfell Tower tragedy.
In an earlier restructuring move, Ardmore Construction, the original contracting business responsible for many of the affected developments, entered administration nearly a year ago. The step was intended to protect the wider group from future claims linked to historic projects.
However, a significant legal challenge brought by house builder Crest Nicholson altered the position. The High Court ruled that Building Liability Orders established under the Building Safety Act 2022 could extend responsibility for building defects beyond the original contractor to parent companies and related entities within the same corporate group.
Although Ardmore intends to appeal the ruling, the judgment potentially broadened the scope for developers and building owners to pursue claims against companies throughout the wider Ardmore organisation, increasing the group’s potential exposure.
Several major house builders, including Barratt, Taylor Wimpey and Bellway, are understood to be pursuing substantial claims against the business.
Industry sources indicated that uncertainty surrounding the scale of future liabilities had increasingly affected Ardmore’s ability to win new work. Despite maintaining a sizeable order book and active project portfolio, concerns among clients and funders are believed to have contributed to a more cautious approach to engaging with the company.
Administrators will now evaluate options for the affected businesses while project owners work to secure alternative contractors to complete unfinished developments.
The wider Ardmore Group, which includes the company’s property interests, has not entered administration. Instead, it has applied for a moratorium process that will allow operations to continue while its financial position is assessed.
The moratorium is expected to provide time for the group to continue preparations for its appeal against the High Court’s Building Liability Order judgment in the Crest Nicholson case.
Earlier this week, Ardmore was granted permission to appeal to the Court of Appeal. The court also agreed to expedite the process in recognition of the significance of the legal issues involved.
The company argues that the appeal raises questions of broader importance to the construction sector, particularly regarding the circumstances under which Building Liability Orders can be imposed and the extent to which liability can be transferred to associated companies within a corporate group for historic projects.
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.”
