Housebuilder Stewart Milne Group staff made redundant by administrators in ‘pre-recorded message’

Stewart Milne Group staff members were made redundant via a pre-recorded message after the business went into administration, workers have told STV News.

Teneo, appointed administrators for the Group, informed staff on Monday with 217 jobs lost. Employees were told they would not be paid for some hours completed before Christmas.

The administrators deny any employee calls were done by pre-recorded message.

Teneo also said it was working with the Redundancy Payments Service to support employees in recovering “any statutory entitlements to which they may be entitled”.

Stewart Milne, who founded the business in 1975, said he was “devastated” at the need to appoint administrators.

Lloyds Banking Group said the collapse followed several years of special agreements, including multiple extensions on its debts.

STV News understands the Stewart Milne Group has been in significant debt for more than a decade.

One firm that worked with the Group closely for a number of years told STV News they may not be paid for outstanding invoices from the company.

They said: “Almost all of our work was with Stewart Milne so them closing will impact us quite a lot.

“Invoices we were waiting on probably won’t be paid, delay in earnings trying to find more work.

“I am lucky that I’m not a huge company like some others who have probably lost a lot more than me but with a young family and right after the new year it is a shock and will take a while for us to recover.”

Unite say it is “totally unacceptable” workers were given “no notice” prior to the redundancies and that the union is exploring the possibility of legal action.

Sharon Graham, general secretary, said: “The announcement that the Stewart Milne group has been placed in administration is grim news. However, what is totally unacceptable is the workforce were given no prior warning nor has there been any consultation with Unite.  

“Unite is now actively exploring all legal avenues in support of our members and it is fully determined to get them justice.”  

The Group, understood to have underperformed in the sector for years, has its headquarters in Aberdeen with offices in, Edinburgh, Glasgow and other UK bases.

A spokesperson for Lloyds Banking Group: “When a company experiences financial difficulties, we will always try to find a solution that places the business onto a sounder financial footing without the need for any insolvency process.

“Unfortunately, despite several years of support and forbearance, including multiple maturity extensions to the borrowing, this has not been possible in this instance.

“We will now work with the administrators, as they consider the best options for the business.”

Janine Conlin, who moved in to a development in Hamilton two months ago, told STV News: “We’re just really shocked given they were still doing viewings on the weekend, they’ve been very active in terms of the building next door. So, it was quite a shock to find out that was happening.”

Kevin O’Connor, who has lived on the same development for a year and has a snag list of around 20 defects needing fixed, told STV News: “There’s a bit of anxiety because we obviously don’t know what happens. These things aren’t that common.

“Having spent a lot of money, like our neighbours, on these houses, it’s a little difficult to swallow.

“We don’t know what to do about it. It’s costly to fix things, especially when you don’t have the skills of the trade to do it.

“So naturally, we’ll have to probably spend a good bit of money finishing off our house, even though you would expect it to be like that to begin with.”

It is understood that no further building works will take place and that customers who have reserved a property with the Group and have not yet moved in will be contacted.

Teneo Financial Advisory Limited has been appointed as joint administrators and customers who currently live in a Stewart Milne property and are concerned about outstanding building works have been urged to contact [email protected].

A sales process was run by the firm from May last year but directors made the decision to put each of the Stewart Milne companies that operate active development sites in Scotland into administration.

The Group has faced “significant challenges” in recent years, with financial uncertainty related to rising interest rates, cost increases and a reduction in consumer confidence.

In a statement on Monday, Mr Milne said: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, sub-contractors, suppliers and customers.

“Stewart Milne Group was up for sale and, following significant interest, two bids were submitted. The bank has not accepted either bid and withdrawn its funding which left the directors with no option but to appoint administrators.

“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it. I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safe-guarding hundreds of jobs and protecting livelihoods.”