BELFAST BRIEFING:Leading family-owned construction group Carvill places number of firms in administration

A HOUSE-building firm that concedes it is having financial difficulties is hardly headline-grabbing news these days. But a construction group that expresses genuine remorse that its business is in difficulty because it is worried about the impact on loyal staff should be headline news.

Carvill Group is the latest in a long line of local building firms to hold its hands up and admit it is currently in over its head. But what makes Carvill stand out from the crowd is the manner in which it has acknowledged its financial failures.

The group, one of the North’s leading family-owned building firms, has confirmed that it sees no option but to place a number of its companies in administration.

Carvill has been in business for 60 years but its links with the local construction sector stretch back even further. The first Carvill to make a name for himself in the building trade – Patrick Carvill – set up a building firm in Warrenpoint in the late 19th century.

Until last week, the Carvill Group was a major house builder in the North, Scotland, northeast of England and Germany. At one stage it had more than two million square foot worth of sites under development.

The group had warned at the beginning of this year that it had entered into discussions with its creditors because of “economic pressures”.

But last week, the directors and shareholders of Carvill said it was “with great regret” that it had to place Carvill Group Limited, Carvill (Scotland) Limited and Carvill (Newcastle) Limited into administration.

The group said that, for the last four months it had made “every attempt” to establish a company voluntary arrangement – a legally binding agreement between a firm and its creditors – but, because of the “adverse economic climate”, it had been unable to do so.

Christopher Carvill, the group managing director, acknowledged that it was “a sad day” for everyone who had tried to find a solution to the company’s problems.

“I would like to thank all of the creditors who supported our efforts . . . and apologise that we have not succeeded,” he said when he confirmed details of the administration process. “We are very hopeful that current projects in hand will continue to be developed during the course of the administration process; this should ensure that current employment levels will be maintained,” he added.

In hindsight, the Carvill Group may have made some ill-judged investment decisions, such as spending an estimated £40 million for the Sirocco Quay site in the heart of Belfast just as the local property market was beginning to slide.

But Christopher Carvill’s genuine regret about the fact that his family business is now in the hands of administrators does not stem from the fact that he may no longer feature in the rich list for Northern Ireland but rather how it will impact on his staff who he has known for many years.

There is scant sympathy in the North for builders who cashed in on Northern Ireland’s short-lived, frantic property boom and now owe their banks millions of pounds while they still enjoy their luxury cars and expensive homes.

Latest unemployment figures also show the real victims of the property slump have not been the multimillion pound property developers with limited companies but rather the people they employed.

Last month nearly half of the 59,200 people who claim jobless benefits in the North were described as having previously working in an “elementary occupation” – there is no exact breakdown of exactly how many of these are former construction workers but it is a sure bet that there is a high percentage of them in this category.

Richard Ramsey, Ulster Bank’s chief economist in the North says he expects the claimant count to rise to more than 70,000 over the next 18 months. “The construction sector and those industries sensitive to consumer spending will be the primary sources of job losses in the months ahead,” Ramsey has warned.

Christopher Carvill knows all too well that if his staff lose their jobs, they will have a very hard time finding another, particularly in the North.

His apology and concern for his staff mean there is grudging respect for Carvill at a time when there is little for certain building groups and individuals who ran up millions of pounds of debts without any concern for the impact this would have on anyone except themselves.