A profitable UK offsite construction firm has collapsed into administration, leaving suppliers and subcontractors facing £17.4m in unpaid bills.
A UK construction company has fallen into administration (Image: Getty)
A UK offsite construction firm that reported multimillion-pound profits just months ago has collapsed into administration, leaving subcontractors and suppliers exposed to £17.4m in unpaid bills and hundreds of workers without jobs.
The scale of the debts has been detailed in a new update from administrator Interpath, which took control of Merit Holdings in November. According to Interpath’s proposals, it is “highly unlikely” that unsecured creditors will receive any payment for outstanding invoices.
284 employees were made redundant (Image: Getty)
Merit, which was based in Northumberland, employed 284 staff at the time it entered administration, with all employees subsequently made redundant.
Despite its sudden collapse, the company had appeared financially healthy in its most recent accounts. Filed results for the year ending 30 June 2025 show a turnover of £79.7m, generating a pre-tax profit of £4.3m.
The business was founded by former chief executive Tony Wells and had become a well-known name in the offsite and modular construction sector.
However, the administrator’s report reveals that following the administration, a “substantial disposal of assets” was agreed to a connected party for £396,000. The buyer was a newly formed company, Merit Industrialised Construction Ltd.
Companies House records show that Kirsty Wells, Matthew McGrady and David Wilkinson, who were directors of Merit Holdings, were also directors of Merit Industrialised Construction Ltd at the time of the purchase.
In addition, records show that Kirsty Wells incorporated two other new companies in November, Blaze Technology and Newco MHL Ltd, around the same time the administration process was under way.
Interpath’s report does not suggest wrongdoing, but it shows the limited prospects for creditors, with unsecured suppliers and subcontractors now facing significant losses.
