Office fitout specialist Paramount D&B Limited has entered administration after losses on construction projects caused a severe cash flow crisis from which it could not recover.
The Cardiff-headquartered business ceased trading this week, with 43 employees made redundant, while eight more were kept back to assist with the administration process.
CEO Richard Jones, who has been with the company for 16 years, said it was a “truly devastating day” for Paramount, which was founded in 1989.
The contractor went through a management buyout (MBO) in 2018, led by Jones.
In 2021 Paramount entered an employee ownership trust (EOT) arrangement, before a further MBO last year reducing Jones’ shareholding to 4 per cent.
By June 2022 it had rebuilt to net assets of more than £1 million.
Post-pandemic, the company expanded into the construction sector after concerns about how the office market would be affected in the longer term.
But despite winning several high-profile construction projects, the company faced challenges to deliver these contracts profitably and ran into acute cash flow problems.
Jones said: “This is a truly devastating day for the business that I was first employed by 16 years ago. All options to find a solution to keep the business trading have been explored and the directors are devastated to be left with no choice but to cease trading.
“We did everything possible to avoid closure, but the losses incurred on construction projects were simply too large to turn things around.
“Our thoughts are with our colleagues who have lost their jobs, many of whom have given long service to make Paramount a success.
“We would also like to thank our loyal clients and suppliers who supported us over the years and are sorry to let them down.”
Susan Clay, joint administrator at Begbies Traynor, added: “This situation underlines the challenges being faced in the construction sector with inflationary pressures contributing to trading losses and ultimately leading to the failure of an established and successful business.
“It is hugely disappointing to see Paramount cease trading in these circumstances and highly regrettable that efforts to secure its future were unsuccessful.
“We are aware of the negative impact that this will have on the supply chain and hope that suppliers and sub-contractors will be able to work with Paramount’s customers to find the best possible solutions to complete existing projects.
“From our interactions with staff, it is clear that they remained loyal to and were proud to work for the business. Employees are of course devastated by today’s news, and I sincerely hope that their track record of delivering successful projects will stand them in good stead to gain new employment quickly.”
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