GOVERNMENT investment in construction is needed right away to avoid more local businesses – like Style Group – going under, according to the building trade.
Yesterday, the group, which included AC Mauger, Style Windows, Style Interiors and Style Homes, ceased trading with immediate effect.
The La Pouquelaye-based business employed more that 200 staff. A letter to them, seen by the JEP, said that the group was being wound up and while their roles remained, no wages could be paid.
It said: “I know this will come as a shock. Please understand this is not a reflection on your hard work or performance you have given so much, but the challenges facing the business have made it impossible to continue.”
The latest closure of a well-established business will send shockwaves across the economy, with many secondary business affected by unpaid bills or cancelled work.”
CHAMBER OF COMMERCE
In response to the news, both the Chamber of Commerce and Jersey Construction Council expressed sadness, sympathy for staff, and made a call for government action.
The Chamber said it was “deeply saddened” by the loss of the business, and the consequential jobs. It added that it was also concerned for the impact on smaller firms who were trading with them.
It said: “It’s devastating for the hard-working families affected by this and Chamber has the greatest sympathy for all those who are facing uncertainty following this news.
“The latest closures of well-established business will send shockwaves across the economy, with many secondary business affected by unpaid bills or cancelled work.”
It added: “Chamber is concerned the Island will lose its capacity to deliver housing, schools and other essential projects if more firms go under. Costs will rise further as we rely more on off-island contractors and local jobs disappear. A strong, competitive local construction sector is critical to Jersey’s economy and community.
Mike Osborne, chair of the Chamber’s Building, Housing and Environment Committee, said: “We need tangible action now that will reduce the risk of further businesses getting into difficulty, and risk losing the opportunities for keeping and developing skills in this vitally important sector of the economy.
“Government is the biggest client and influencer of activity in the construction sector, but it needs to understand the importance of the multiplier effect that comes through construction value into the broader economy.
“We want to work with Government, whenever and however possible, to bring activity to construction sites quickly. We need a procurement process that is rapid, reduces bureaucracy and supports local business. That will allow them to invest, employ, train and ultimately maintain a sector that will thrive again.”
Murray Norton, chief executive officer, added: “Chamber has been consistently calling for the release of capital projects as the government is by far the biggest customer for building and construction services.
“Earlier this month we welcomed the government’s Investing in Jersey programme, but it needs to be fast-tracked to improve facilities and the public realm, providing an urgently required pipeline for this sector.
“Without headline projects that local construction companies can bid for, we are concerned that further closures in this sector will be inevitable and skilled tradespeople will be lost to Jersey’s economy.
“There is a clear need for a broad range of investment, including infrastructure, housing, repairs, maintenance and improvement. We must make it happen.”
The Jersey Construction Council said it expressed its “deepest sorrow to those immediately impacted, including the directors, staff, clients, sub-contractors and suppliers of the Style Group companies. In particular, the council offers its support to fellow members of the council, who may be impacted by this matter”.
The council also said it wanted to recognise the contribution of ground engineering contractor Amplus, which also ceased trading this week.
It added: “The JeCC would like to highlight some of the challenges that have affected the industry and may have had an impact on [Style Group and Amplus’s] decision, principally caused by the slowdown in the visible pipeline of public and private sector projects.”
It listed some of the causes as:
- The “reduced confidence” in the industry and its forthcoming projects. It said: “As an example, headlines created by the Jersey Competition Regulatory Authority about the lack of competition within the sector – based on, in our opinion, a limited data set – has had a detrimental effect on the public, investors, suppliers and construction companies’ confidence. The delayed publication of the Island Construction and Engineering programme has paid its part.”
- The “lack of the investment” in the States-owned property portfolio, “including essential works in road and drainage infrastructure”.
- The government “changing [minimum] space standards, which are different from the UK standards”.
- The requirement for a percentage for art contribution on specific projects, which “have a direct impact on a project’s viability”.
- The “blanket percentage of affordable housing units” on larger sites, which “should be adapted depending on the site and its environment”.
- Stamp duty on second homes, which has a “detrimental effect on the housing development market and has seen many projects stalled. This, in turn, has affected estate agents, moving companies and many small work construction companies that would undertake minor home improvements”.
- The ongoing process of trying to streamline the planning system.
- The “high cost” of borrowing.
- “While the reintroduction of the trainee / apprentice wage has been welcomed, there needs to be confidence in forthcoming works for employers to employ trainees.“
The council added: “The local construction industry employs approximately 6,000 workers and the impact on the closure of these companies has a direct effect on the wider circular economy of Jersey. As an example, a number of hotels that have been demolished, but building has not started, which has an effect the tourism and hospitality sector.”
The end of an era
Founded in 1947, AC Mauger & Son Limited built many well-known landmarks in Jersey, as well as hundreds of homes and offices. It constructed the now-demolished Cyril Le Marquand House, which opened in 1982, the same year the firm was acquired by the Style Group.
The firm also built the Airport’s Air Traffic Control tower, a contract which won the firm ‘Project of the Year’ at the Jersey Construction Awards in 2010.
In the 1960s, it built the Royal St Martin and soon-to-be-demolished Oaklands Hotel; in the 1970s, its projects included The Jersey Pottery, Ann Street flats, Philip Le Feuvre House, Clos Rivage in Gorey and Links Court flats;
In the 80s, it worked on Jersey Museum, the Hospital, Gouray Lodge, Summerville House and the Mayfair Hotel; the 90s, St Ewold’s Nursing Home, Victor Hugo apartments, Orchid Court and Clos de Mont Sejour;
In the 21st century, La Collette Bus Depot, Rockhampton, La Folie Estate, Grainville School, Magnolia Hotel, La Coie, The Boat House and The Oyster Box were built.
More recently, the firm built Lakeside Care Home, Trinity School and Jacksons garage.
Style Windows and Interiors was founded in 1974 and its recent work included Fat Face, Next, The Square, de Gruchy and the Broad Street Post Office. The business celebrated its 50th anniversary last year, when it also won a national award for its One St Brelade residential project in St Brelade’s Bay.
Edward Poynton became the group’s chief executive in 2014 while keeping his role as managing director of Style Windows. He is the son of the group’s founder, John Poynton, who was non-executive chairman of the group.
The business moved from its premises in St Peter, behind M&S, to St Helier Business Park at Le Pouquelaye last year.
The collapse of Style Group follows several high-profile and sudden exits from the construction sector in the last few years, including Camerons, JP Mauger, Mitchell, Kalmac and Nicholson Builders.
Reaction
Paul Holt, who posted on Facebook that he worked for Style Windows, wrote: “It was a highly profitable company with a huge turnover with a good reputation. The workforce were great to work with; they took pride in their work. It was a pleasure coming to work and the Poyntons were great bosses to work for; they are good people.
“It was a reputable company with a good reputation. When you are up against increased rent and higher costs in materials, changing property markets, the outlook changes.
“It’s Jersey for you: it’s become a dear place. I’ve seen some criticism over wages [on Facebook] but when you apply for winding up, it’s out of their hands. They’ve done some brilliant projects for Jersey.”
Meanwhile, Amy Louise posted: “Why take on new apprentices when they knew they were going under 😠 just wrong on so many levels 😢 my 16-year-old son is doing his apprenticeship there got told today, came home and wage slip arrived in the post today but not even getting paid, what a kick in the teeth 😠 nice one, who’s going to pay my 16 year old for eight days of hard work??!! What a c****y life lesson to learn so young 😢 my heart goes out to all the other staff and subcontractors xx”
The end of Amplus
Ground engineering contractor Amplus also ceased trading this week, although it did not go into administration and the announcement was unrelated to Style Group’s.
The business was co-founded by Adrian Tett and Matthew Warner in 1999 and specialised in preconstruction piling work.
Explaining why the businesses had ended after 26 years, Mr Tett said: “This part of the industry has been very slow for the last 12 years, when the focus has been building office blocks and matchbox-sized flats in town.
“In the country, you need to dig piles but this isn’t necessary in town because it is built on a marsh.
“Then, all of a sudden, we’ve had lots of building on greenfield sites and plenty of infrastructure to go with it. The homes themselves do not need piles, but it is the infrastructure around them, such as the sewerage, that does.
“We had to make a decision as to whether we invested in new technology or not, and we decided to call it a day while we’re ahead.”
He added: “Yes, there is an issue with the Planning department [in the supply of projects] but the main problem is that people are generally nervous about spending money at the moment.
“Piling had gone on in Jersey for many years but we were the first company set up to specialise in it. We have been the leaders in the industry for more than two decades but there is another company now, which I helped to set up, which will, I’m sure be able to take on the mantle of the work.
“We will leave a big void but the Island will not be completely bereft on that specialty: they know how to dig big holes and fill them with concrete.”
Mr Tett said that he and Mr Warner had decided to scale down the business at the beginning of the year and their nine staff had left in March, but had then been reemployed on zero-hour contracts to complete outstanding projects.
“It is a pure coincidence that we decided to close the business in the same week as Style Group ceased trading,” he said. “We’ve finished all our work and everyone has been paid. I’m now looking forward to having a bit of down time.”
