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ISG Ltd

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This article is about the UK construction company. For other uses of ISG, see ISG.

ISG Ltd
FormerlyInterior Services Group
Company typeSubsidiary
LSE: ISG
Industryfit-out, construction, engineering services
Founded1989
Headquarters
London
,
England
Area served
Europe, Middle East, Asia
Key people
Zoe Price (CEO)
Revenue£2,190 million (2022)[1]
Number of employees
2,982 (2021)[2]
ParentCathexis
Websiteisgltd.com

ISG Ltd (formerly Interior Services Group) is a privately-owned, London, England based construction company, employing around 3,000 people, mainly in the UK, mainland Europe and the Middle East. By turnover, it was the sixth biggest contractor in the UK.

In September 2024, following months of concerns about its finances and a stalled sale of the group, eight ISG businesses entered voluntary administration, in UK construction's biggest collapse since Carillion in 2018. Administrators confirmed 2,200 people employed by ISG in the UK were being made redundant with immediate effect.

History

[edit]

The business that became ISG was founded as Stanhope Interiors in 1989 by David King[3] who led its management buyout from Stanhope Properties in 1995, when it was renamed Interior plc.[4]

In 1997, the business, Interior Services Group, was floated on the Alternative Investment Market of the London Stock Exchange. It officially changed its name to ISG plc in April 2013.[5]

In March 2016, it was taken private by US-based Cathexis (the investment vehicle of Texan billionaire William Harrison),[6] previously a substantial shareholder, in a £85m takeover.[7][8][9]

In May 2021, ISG reported its results for 2020, affected by the COVID-19 pandemic. Revenue was down 23% to £2.0bn (2019: £2.6bn); underlying EBITDA for the year was £37.6m (2019: £63.3m).[6] Fit-out was ISG's biggest source of revenue (£1,042.3m in 2020), followed by construction (£690.8m) and engineering services (£293.3m).[10]

In the year to December 2021, ISG reported revenues of £2.263bn, still not back to its pre-pandemic peak, while pre-tax profits increased to £18.9m, from £8.9m a year earlier;[11] fit-out remained ISG's largest service line, the company had 3,001 employees and derived £1.8bn of its revenues from the UK.[2] In 2022, ISG revenues slipped to £2.19bn, while pre-tax profit was down 38% to £11.5m.[1] ISG's order book was adversely affected by the August 2022 suspension of the Britishvolt gigafactory in Blyth, Northumberland, and delays to a film studio project in Hertfordshire.[12][13][14] In November 2023, ISG CEO Matt Blowers and other senior staff held urgent meetings with stakeholders to reassure them about the financial status of the group.[15][16]

Appointed in 2022, Blowers left ISG as the business underwent a 'fundamental reset' in February 2024,[17] being replaced as CEO by Zoe Price.[1] There were also changes affecting the company secretary, vice-chair and chief financial officer roles.[18] In July 2024, ISG finances incurred a £14m hit after a key supplier went into liquidation.[19]

Also in July 2024, ISG staff and suppliers were informed that the company would be sold by Cathexis in the very near future, with the sale including a significant investment to recapitalise the business and support a return to normal trading.[20] Staff and suppliers had become concerned about the state of the company's finances in late 2023.[21] The prospective buyer was reported to be a UK-registered holding company called Antipodean Holdings with two equal shareholders: South African Andre Redinger and Australian James Overton.[22]

Administration

[edit]

However, no further progress on the sale was announced. On 19 September 2024, six ISG Ltd subsidiaries - ISG Construction, ISG Engineering Services, ISG Retail, ISG Jackson, ISG UK Retail and ISG Central Services - applied to go into administration.[23][24][25] ISG Fit Out, which accounted for around £500m of ISG revenue and was profitable, was not included in the initial application,[26] but further applications followed on 20 September 2024, including ISG Fit Out and ISG Interior Services Group.[27] ISG's failure was described as UK construction's biggest collapse since Carillion in 2018.[25][28]

According to Construction News, some site workers were told the firm - ranked by turnover as the sixth biggest contractor in the UK[29] - had gone under, amid rumours that it had been struggling to pay subcontractors. One supplier had filed a winding-up petition against ISG Engineering Services;[23] other suppliers facing huge debts criticised ISG for "stringing them along" for months.[30]

In a late night email to staff CEO Zoe Price apologised to staff for the news leaking out ahead of a planned announcement on Monday 23 September 2024. She explained ISG's problems stemmed from legacy issues relating to large loss-making contracts secured between 2018 and 2020, which, as a result of the COVID-19 pandemic, had a significant effect on liquidity. In the circumstances, "it was not possible to conclude a sale, as the purchaser could not satisfy the funding needed to recapitalise the business"; Cathexis had also looked unsuccessfully at refinancing the company, and selling individual businesses had not been practicable in the timescale, leaving "no option but to file for administration".[31] However, Andre Redinger of Antipodean Holdings contested Price's position on the sale. A "fair deal" had been on the table, he said; Antipodean had a robust turnaround plan which it believed could save jobs and return ISG to growth and profitability, but ISG suddenly stopped communicating on 12 September.[32][33]

Because of ISG's extensive involvement in ongoing public sector projects worth at least £1.84bn, UK government officials were reported to be monitoring the situation and appointing advisors to implement "detailed contingency plans".[28][34][35] ISG was working on 69 live public sector projects worth at least £1.84bn, including schools, police stations and prisons; it had 22 ongoing Ministry of Justice projects including the £300m extension of HM Prison Spring Hill in Buckinghamshire, plus work for the Department for Work and Pensions.[36]

Ernst & Young's appointment as administrators was confirmed on 20 September 2024. It confirmed most of the 2,400 people employed by ISG in the UK were being made immediately redundant, with 200 retained to assist the administrators.[36][37] Regarding the failed sale to Antipodean Holdings, a joint EY/ISG statement said: "the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent."[37]

Operations

[edit]

ISG employed around 3,000 people, mainly in Europe and the Middle East; it has Europe offices in the UK, Germany, Iberia (Spain and Portugal), Luxembourg and Switzerland, and two offices in the UAE.[38]

Notable projects

[edit]

At the time of the company's collapse, other ongoing ISG schemes included a £44m conversion of a former IKEA store in Coventry into an arts and culture centre,[59] plus numerous prisons (including upgrades for HM Prison Guys Marsh in Dorset and HM Prison Liverpool in addition to work at HM Prison Springhill and HM Prison Grendon)[60] and various school projects, including Hempland primary school in York[61] and two schools in Bishop's Stortford, Essex.[62] ISG clients were told to move quickly to find replacement contractors, or risk their projects being delayed for months.[63]

Notes

[edit]
  1. ^ The owner of ISG, William Harrison, was also a shareholder in Britishvolt (through Cathexis Holdings)[55] before it went into administration in January 2023.

References

[edit]
  1. ^ a b c Rogers, Dave (9 February 2024). "ISG chief executive goes". Building. Retrieved 9 February 2024.
  2. ^ a b "ISG Annual Report 2021" (PDF). ISG. Retrieved 21 February 2023.
  3. ^ "Directors' Deals: King sized sale as ISG founder dumps a third of his stake". The Times. 30 October 2005. Retrieved 17 May 2021.
  4. ^ "What goes on inside the head of Interior?". Construction News. 15 July 1999. Retrieved 21 February 2023. The fit-out arm of developer Stanhope has gone from strength to strength under his leadership, expanding after a management buyout in 1995.
  5. ^ "It is now officially ISG". The Construction Index. 5 April 2013. Retrieved 17 May 2021.
  6. ^ a b "ISG weathers challenging year". The Construction Index. 17 May 2021. Retrieved 17 May 2021.
  7. ^ "AIM - Cancellation - ISG Plc". Proactive Investors. Retrieved 17 May 2021.
  8. ^ "Takeover of AIM listed ISG Plc by Cathexis". BDO. Retrieved 17 May 2021.
  9. ^ "ISG sets delisting date". The Construction Index. 26 February 2016. Retrieved 17 May 2021.
  10. ^ "ISG profits tumble 80%". The Construction Index. 12 July 2021. Retrieved 12 July 2021.
  11. ^ Haynes, Luke (10 June 2022). "ISG revenue grows by £300m after pandemic shock". Construction News. Retrieved 21 February 2023.
  12. ^ Morby, Aaron (5 July 2023). "Hollywood film studio pauses £600m Hertfordshire job". Construction Enquirer. Retrieved 19 September 2024.
  13. ^ Weinfass, Iain (8 September 2023). "Uncertainty surrounds ISG's £700m film studio". Construction News. Retrieved 19 September 2024.
  14. ^ Curtin, Andrew (8 August 2024). "The rise and decline of ISG". Construction Wave. Retrieved 19 September 2024.
  15. ^ Rogers, Dave (13 November 2023). "ISG tackles 'inaccurate and false claims' which prompted bosses into round of meetings with concerned firms". Building. Retrieved 19 September 2024.
  16. ^ Ing, Will (14 November 2023). "ISG denies 'wholly inaccurate' rumours about finances". Construction News. Retrieved 19 September 2024.
  17. ^ Banks, Charlotte (9 February 2024). "ISG chief steps down as 'fundamental reset' beckons". Construction News. Retrieved 19 September 2024.
  18. ^ Rogers, Dave (1 March 2024). "ISG brings in replacement for Paul Cossell as company secretary leaves". Building. Retrieved 1 March 2024.
  19. ^ Weinfass, Iain (3 July 2024). "Envelope specialist liquidation set to hit ISG for £14m". Construction News. Retrieved 19 September 2024.
  20. ^ Morby, Aaron (5 July 2024). "ISG sale set to be rubber-stamped". Construction Enquirer. Retrieved 8 July 2024.
  21. ^ Rogers, Dave (5 July 2024). "ISG set to be sold 'in coming days'". Building. Retrieved 5 July 2024.
  22. ^ Prior, Grant (23 July 2024). "ISG sale imminent as buyers set-up UK holding company". Construction Enquirer. Retrieved 23 July 2024.
  23. ^ a b Banks, Charlotte (19 September 2024). "ISG UK subsidiaries apply for administration". Construction News. Retrieved 19 September 2024.
  24. ^ Morby, Aaron (19 September 2024). "ISG files notice of administration". Construction Enquirer. Retrieved 19 September 2024.
  25. ^ a b "ISG heads for administration". The Construction Index. 20 September 2024. Retrieved 20 September 2024.
  26. ^ "FIS responds to concerns related to ISG Group". Federation of Interior Specialists. 19 September 2024. Retrieved 20 September 2024.
  27. ^ Prior, Grant (20 September 2024). "ISG Fit Out arm follows others with administration notice". Construction Enquirer. Retrieved 20 September 2024.
  28. ^ a b Kleinman, Mark (20 September 2024). "Whitehall on alert as construction group ISG heads for collapse". Sky News. Retrieved 20 September 2024.
  29. ^ Barnard, Lucy (20 September 2024). "ISG UK subsidiaries file for administration". Construction Briefing. Retrieved 20 September 2024.
  30. ^ Prior, Grant (20 September 2024). ""Strung along" subcontractors fury over fall of ISG". Construction Enquirer. Retrieved 20 September 2024.
  31. ^ Prior, Grant (20 September 2024). "ISG boss apologises to staff in late night email". Construction Enquirer. Retrieved 20 September 2024.
  32. ^ Morby, Aaron (20 September 2024). "ISG buyer claims contractor walked away from deal". Construction Enquirer. Retrieved 20 September 2024.
  33. ^ Marrs, Colin (20 September 2024). "War of words over collapsed ISG sale". Construction News. Retrieved 20 September 2024.
  34. ^ Banks, Charlotte (20 September 2024). "Exclusive: ISG collapse risks £1.84bn of government contracts". Construction News. Retrieved 20 September 2024.
  35. ^ Gayne, Daniel (20 September 2024). "Government implementing 'detailed contingency plans' as ISG heads into administration". Building. Retrieved 20 September 2024.
  36. ^ a b Simpson, Jack (20 September 2024). "More than 2,000 jobs axed as UK prison builder ISG collapses". The Guardian. Retrieved 20 September 2024.
  37. ^ a b "UK construction group appoints administrators". BE News. 20 September 2024. Retrieved 20 September 2024.
  38. ^ "Our office locations". ISG Ltd. Retrieved 20 September 2024.
  39. ^ "Royal Festival Hall". European Union Prize for Contemporary Architecture. Retrieved 25 July 2023.
  40. ^ "News | Interactive Investor". Iii.co.uk. 9 September 2008. Retrieved 2 February 2013.
  41. ^ "ISG completes Zayed Sports City Stadium". Middle East Construction News. Retrieved 25 July 2023.
  42. ^ ISG installs timber cycling track at Olympic Velodrome The Construction Index
  43. ^ "£3m Grimsby wind farm base contract handed out". Grimsby Telegraph. 27 March 2013. Archived from the original on 2 February 2014. Retrieved 31 January 2014.
  44. ^ Fenwick Elliott, ISG Construction Ltd v Seevic College, published 3 December 2014, accessed 5 August 2022
  45. ^ "ISG to build Royal Mint visitor centre". Construction News. 14 October 2015. Retrieved 25 July 2023.
  46. ^ "ISG takes Wigan Town Hall back to the future". The Construction Index. 11 July 2013. Retrieved 6 August 2020.
  47. ^ "ISG named as main contractor for BBC Wales new headquarters at Central Square scheme in the centre of Cardiff". Wales Online. 18 November 2015. Retrieved 25 September 2017.
  48. ^ Weinfass, Ian (24 September 2020). "Client to reimburse ISG as cost on Waterloo job rises". Construction News. Retrieved 17 May 2021.
  49. ^ "Redevelopment at Lord's enhances world-class experience at the home of cricket". Lord's. Retrieved 18 May 2021.
  50. ^ Gregory, Rhys (3 December 2019). "ISG secures £89 million Cardiff transport interchange project". Wales247. Retrieved 20 November 2020.
  51. ^ "Inside Cardiff's new bus station as it opens after seven-year delay". ITV News. 27 June 2024. Retrieved 29 June 2024.
  52. ^ "ISG wins £281m UCL neurology centre". The Construction Index. 3 April 2019. Retrieved 21 February 2023.
  53. ^ Haill, Oliver (6 September 2021). "Construction begins on UK's first battery gigafactory". Proactive Investor. Retrieved 31 August 2022.
  54. ^ Lowe, Tom (16 August 2022). "ISG pauses work on £2.6bn car battery 'gigafactory' amid funding delays". Building. Retrieved 30 August 2022.
  55. ^ Jolly, Jasper (29 September 2022). "Shock therapy: turmoil engulfs Britishvolt's £3.8bn battery factory". The Guardian. Retrieved 29 September 2022.
  56. ^ Rogers, Dave (4 September 2023). "ISG lands prized fit-out job with £150m Google King's Cross win". Building. Retrieved 20 September 2024.
  57. ^ Morby, Aaron (12 December 2023). "ISG wins £70m London Regents Quarter offices to labs job". Construction Enquirer. Retrieved 20 September 2024.
  58. ^ "ISG starts £33m Moseley Road Baths restoration". The Construction Index. 23 August 2024. Retrieved 20 September 2024.
  59. ^ Waite, Richard (20 September 2024). "Top contractor heads for collapse leaving doubts over major projects". Architects' Journal. Retrieved 20 September 2024.
  60. ^ Prior, Grant (20 September 2024). "Prison building plans facing delays over ISG collapse". Construction Enquirer. Retrieved 20 September 2024.
  61. ^ "Construction begins on new Hempland Primary School in York". ISG Ltd. 23 May 2024. Retrieved 20 September 2024.
  62. ^ Corr, Sinead (20 September 2024). "Failure of construction giant ISG hits work at Bishop's Stortford High School and Avanti Grange". Bishop's Stortford Independent. Retrieved 20 September 2024.
  63. ^ Rogers, Dave (20 September 2024). "Clients told to move quickly to find replacements for ISG, or risk sites being stalled for months". Building. Retrieved 20 September 2024.
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