One of Shropshire’s biggest firms collapsed today. Is this the end for Wrekin Construction?

The head office of Wrekin Constructive Solutions in Shifnal.

When Tom Frain founded Wrekin Construction in 1960, he took his inspiration for the name of his fledgling company from Shropshire’s most famous hill and landmark – The Wrekin.

He wanted the name to represent the solid foundations and core business ethics, which he believed his company should follow.

Recognised by the industry for pioneering change, company has combined changing methods and technology with traditional values, business integrity and skills development over nearly five decades.

But today those foundations lay in ruins. As late as last Friday, joint managing director Peter Greenwood insisted the company was not about to close the gates but cashflow was an issue.

Today the company folded, and the receivers moved in.

Originally a family-owned firm, the Wrekin Group and Wrekin Construction was acquired by David J Unwin (chairman), David G Unwin (director) and John Woodcock (joint managing director), in 2007, ending the 47 years of ownership by the Frain family.

Tom Frain, founder and Chairman of Wrekin Construction, Shifnal.

Set up by Tom Frain in Horsehay, Telford, and then run by his son, Simon Frain, who succeeded him as chairman, the Frains sold most of their shares to London and Middle Eastern Group.

The group is controlled by the Unwin and Woodcock families who are well known in the construction industry.

Although the Frain family retained a small shareholding at the time of the takeover, it is understood that they no longer have a stake in the firm.

The company has been through peaks and troughs since the turn of the millennium, as the construction industry began to slow down.

In 2001, the company made a loss of £880,000 but turned the business around in a dramatic reversal of fortunes.

By June 2003, it unveiled profits of more than £2 million, with turnover up 27 per cent to smash the £100 million barrier.

The then managing director John Evans announced a forward order book of £52.2 million and the possibility of new acquisitions.

But three years ago, as the construction industry began to falter, Wrekin was in trouble again and was forced to embark on an ambitious restructuring strategy.

Loss into profit

The gamble paid off, and by September 2006, the Wrekin Group announced it had turned a £1.7 million loss the previous year into a £1.7 million profit.

The company said the second dramatic turnaround in three years was achieved by appointing a new managing director, John Worthington, and restructuring the business into three divisions: Wrekin Construction, which included civil engineering, regeneration and design and build; Wrekin Utilities, which involved work with water companies, gas supplies and telecommunications; and Wrekin Rail.

Mr Worthington said prospects for the firm were “very encouraging” with a workload totalling £120 million secured to March 31 2007 against a budget of £138 million.

The company announced Wrekin Construction won an £8 million contract with Defence Estates (United States Forces) for work at RAF Menwith Hill, Yorkshire and a £1.5 million refurbishment deal with Ferndale Foods in Erith, Kent.

Further evidence that the company was back on its feet was a significant investment in its own headquarters at Lamledge Lane, Shifnal.

In October 2006, the company showed it was planning for the future by opened a new, purpose-designed and built training centre at the company’s headquarters in Shifnal.

The centre, at Wrekin Construction in Lamledge Lane, was opened by Sir Michael Latham, chairman of the Construction Industry Training Board.

Company founder Tom Frain was at the official opening and said he was proud of the new facility which would help tackle the problem of a shortage of skilled workers in the industry.

His son, Dr Simon Frain, then chairman, said the centre would ensure the Wrekin workforce was training to the highest standards.

But less than a month later, the company said it was being forced to cut jobs to preserve its “long-term future”. More than 25 posts were axed, mostly office staff at Shifnal.

By early 2007, the Frains were looking for a buyer. From a turnover of £100m in the financial year to March 31 2007, Wrekin suffered a pre-tax loss of £9m.

In stepped David Unwin, of the £50 million a year turnover Tamar Group, and although no precise details of the deal were released, it is understood he was was effectively given the group for free.

He immediately shovelled in £11m to cover the costs of mistakes made by the previous management team and by November 2007, interim results showed a profit of £1.2 million with forecasts of a £2.5 million profit in the full year.

Tamar stepped in because it was in need of a construction presence. It has seven divisions and three of these have an interest in the construction market.

Unwin said: “I’d known Wrekin for 20 years. At the start, I made an offer but Wrekin didn’t want to talk as it was in negotiations to sell to a small venture capital company and anyway Wrekin thought we weren’t big enough.

“So I asked what their net profit was and the answer was that they made a loss. When I told them we had access to £30m that made them prick up their ears.”

Since then, the company has continued to win multi-million contracts across the country, including the construction of new Donnington Railfreight Terminal which was completed in December last year and is, ironically, set to open in the next few weeks amid a fanfare of optimism.