140 jobs lost as Elenco Engineering goes into liquidation

jetski

A large Dublin engineering firm has gone into liquidation with multi-million euro debts and the loss of 140 jobs, as the downturn in the construction sector continues to bite.

A provisional liquidator has been appointed to Elenco Engineering, which has been trading since 1971 and has worked on major projects. The firm experienced a dramatic decline in business in recent months, leading to cash flow difficulties.

The company racked up losses of €1.3million on a number of recent projects, and has a deficiency of between €2.5 million and €3 million.

The directors of Elenco last week petitioned the High Court to put the company into liquidation.

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=33907-qqqx=1.asp

jimmycrackcorm

how did these companies exist and manage years before the boom and now can't?

Ste.phen

Rise in cost of staff + materials, and poor cash management?

EKRIUQ

jimmycrackcorm wrote: »

how did these companies exist and manage years before the boom and now can't?

The expenses in the last few years have gone through the roof, wages, insurance, ESB etc, can't survive with the downturn in income

jmayo

What is scary abot this is if you look at their webiste, they appear to have been primarily working on commerical, public and industrial projects.
It appears they were not dependent on residential construction area which as we all know has really dried up.
So much for the hopes from some quarters that public infrastructure projects would keep things ticking over.

One possible reason why companies can go under is that they invest in new premises, plant etc in the good times and have huge loans where repayments are based on rosey times ahead. Cash flow dries up for few months and debts add up quickly.
I can actually see a few car dealerships/garages going that way in the years ahead.
It happened hugely during the real Celtic Tiger i.e. the Dot Com bubble pre 2002, where companies blew crazy amounts ofmoney based on overly optimistic profit forecasts.

DublinDilbert

jimmycrackcorm wrote: »

how did these companies exist and manage years before the boom and now can't?

At the bottom of the article they cite difficulties in collecting payments... this would indicate they haven't been paid by developers/builders for work done, looks like its definitely a knock on effect of the times we are in at the moment.

51fun

DublinDilbert wrote: »

At the bottom of the article they cite difficulties in collecting payments... this would indicate they haven't been paid by developers/builders for work done, looks like its definitely a knock on effect of the times we are in at the moment.

a similar sized company ashcoin went into liquidation in may
their managing director put it down to not getting payments in as the primary reason for the wind up
the building game has always been notorious for developers not paying firms and firms not paying their sub contractors
funny thing is all these managing directors will be drving around in their 09 mercs next january while their loyal workers will be strugling to pay the mortgage after the christmas

Culchie

when all is said and done, the only reason a business can go bust is when it runs out of money (be that for whatever reason). Cashflow is everything.