Buckinghamshire-based envelope specialist Middlesex Facades has absorbed a £2m bad-debt hit from the collapse of ISG while continuing to grow its top line. The subcontractor said its “proactive approach” helped it sustain operational momentum after the tier one contractor went under in September last year.
In accounts filed at Companies House for the year to 31 March 2025, managing director Ryan McCullagh said the firm was forced to write off £2m linked to ISG. However, it was able to secure direct contracts with clients on former ISG sites, helping to maintain its project pipeline.
Turnover rose from £21.5m to £26.7m over the period, driven by an expanding portfolio of larger contracts and a solid forward workload. Pre-tax profit fell from £2.6m to £620,000, while cash at hand reduced from £2m to £948,000, reflecting the impact of the write-off.
Middlesex Facades delivers facades, cladding and roofing packages for tier one contractors including Galliford Try and Kier across London and the South East. Its workload is focused on commercial, residential and data centre schemes, with the business targeting further growth in the commercial and residential markets.
McCullagh said ISG’s demise had underlined the importance of robust credit risk management across construction. In response, the company has tightened due diligence procedures and revised credit terms for new clients to limit exposure to future bad debts.
Alongside its core markets, the firm is continuing to explore opportunities in modular construction and eco-friendly building sectors. McCullagh said these areas form part of a broader strategy to diversify and strengthen the business in the wake of recent supply chain shocks.
ISG, which had a turnover of £2.2bn and ranked as the UK’s sixth-largest contractor, left a significant hole in the market when it collapsed. Administrators at EY estimated the contractor owed unsecured creditors, including many supply chain firms, around £885m.
The failure has rippled through specialist trades, with several subcontractors reporting heavy losses linked to ISG projects. Vitrine Systems and Seventynine Lighting both directly attributed their collapse to ISG’s failure, while other firms such as Ivegate and Hensall Mechanical Services disclosed substantial write-offs and financial damage.
Joinery and fit-out specialist Taylor Made Joinery Interiors has also been forced into a strategic rethink following the contractor’s collapse. Middlesex Facades’ experience highlights both the vulnerability of specialist contractors to major insolvencies and the potential to recover by rapidly reshaping client relationships and tightening financial controls.
