Headlines: September 4th, 2018

The collapse of Carillion and cuts in public service capital spending are having a devastating effect on sub-contractors. Major construction companies secure most of the public service contracts who then sub  contract to smaller companies. The pain resulting from the collapse of companies and public sector cut backs is spread across the sub contractors, who often are least able to stand the financial stress. This effect is illustrated by  the case of Newcastle Joinery Limited which was taken to the brink and is now fighting back.

At just 27, Jamie Greenwood, the managing director, borrowed nearly £1 million to acquire a business, which, ultimately, developed into NJL. For two decades, the company has manufactured bespoke joinery and commercial interiors, delivered across various sectors underneath the NJL umbrella: NJL Custodial, NJL Secure and Yorkline.

Over the years, NJL has employed specialists in their respective field, all of whom have possessed attributes and skills to deliver an award-winning product. From craftsmanship to customer service, the offering is exceptional – illustrated by playing a pivotal part in helping Whitworth Chemists, based in Scunthorpe, win back-to-back Chemist and Druggist Pharmacy Design awards in 2017 and 2018.

However, as has been well-documented, the construction sector has been crippled over recent years. In January 2018, Britain’s second biggest construction firm, Carillion, collapsed under billions of pounds of debt. Jobs were sacrificed, pensions were put in jeopardy and approximately 30,000 smaller subcontractors were left out of pocket and faced with financial peril.

The last three years have been particularly tough, but the last six months, according to Jamie, have been the “worst ever”.

He explained: “We have been bullied and lost obscene amounts of money as a result of the construction crisis.

“Working with main contractors, like Carillion, has left us with terrible bad debts. The prison service employed us directly for 15 years, but then the maintenance of prisons was outsourced to Carillion and others and, as we now know, that proved to be a catastrophic error.

“On another project, we were employed by a main contractor to assist the build of a secure hospital; however, once started, the project was delayed, bills weren’t being paid and, bluntly, we were battered and commercially-bullied as a result – this happened a lot.”

From a commercial and personal point of view, this took its toll on the company – redundancies were made, contracts dried up, and emergency talks took place within the company about how to stabilise the business.

Jamie explained how this was achieved, changing the company’s condition from ‘critical’ to ‘stable’: “We had to rationalise our business. Letting people go was soul-destroying – I think people’s livelihoods and state of well-being have got lost within the fighting and debt collecting – but we had no choice.

“While we don’t have a choice in working with large construction firms, as they pick-up most of the new build and refurbishment projects generally, we are now mitigating the risk; for example, we manage credit very tightly, obtain credit insurance or bonds and don’t sign up to contracts with clauses allowing the construction firm to kill us.

“Whitworth Chemists is one of our most trusted and loyal clients; we receive a brief, we’re paid on time and we deliver a professional service on time – that’s how it should work. We are going back to our roots, manufacturing bespoke furniture, and not chasing big money orders – that way we have a more manageable, sustainable and less-stressful business as a result.”

Over the last few months, NJL has been pounded, been taken to the brink, but with the tenacity, dedication and experience that Jamie and his experienced senior management team have at their disposal, he is confident that the company can return to its former glory and inject some happiness back into a sector that clearly needs a positive news story.