It’s a year to the day since the collapse of Aberdeen-headquartered Stewart Milne Group.
The housebuilder going bust sent shockwaves around the north-east.
Founded by Stewart Milne in 1975 his business went on to dominate the construction industry with numerous developments being built across the region.
If there was new properties being built then it was more often than not a Stewart Milne sign on display.
Brought up near Alford he was the fourth of five boys. His father was a farm worker and his mother an auxiliary nurse.
He started out as a young electrician but always had a love for football.
Little did he know he’d one day rise to become Aberdeen FC’s chairman and spend 21 years at the helm.
When his business empire crumbled the 74-year-old told the Press and Journal he was “devastated” and “struggling to accept it, given the profound impact it will have on employees, sub-contractors, suppliers and customers”.
Jobs axed
Hundreds of jobs were lost, housing developments left incomplete and a mountain of debt left in its wake. A total of 217 jobs were lost.
Staff were told the company had crashed into administration in a videocall meeting, held by SMG chief executive Stuart MacGregor and Gavin Park from appointed insolvency experts Teneo Financial Advisory.
The Press and Journal obtained a video recording of the live meeting and Mr MacGregor could be heard praising workers for their “incredible loyalty and dedication”.
Mr Park then went on to tell them their jobs would end immediately due to compulsory redundancy.
Hundreds of other sub contractor jobs were also lost.
Announcing SMG’s collapse into administration, Teneo Financial Advisory said the group had – like many in the housebuilding sector – faced significant challenges over the past few years.
It highlighted economic uncertainty due to rising interest rates, increasing cost pressure and an associated reduction in consumer confidence.
Teneo said SMG’s directors had explored “multiple options”, including a sale of SMG, to secure the future of the business.
But it added: “Unfortunately, this did not result in a transaction and other options to restructure the group were, ultimately, not viable.”
Stewart Milne reaction
Speaking at the time of the collapse Mr Milne claimed SMG’s bank rejected two offers for the business and then pulled the plug on funding.
One of those offers was believed to have come from Mr Milne.
He said: “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.
“One of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safeguarding hundreds of jobs and protecting livelihoods.”
Stewart Milne Group debts
Teneo was appointed joint administrators for SMG and six of its subsidiaries.
It found that at the date of the administration, January 8 2024, Bank of Scotland, was due £107.9m.
It is estimated HMRC, a secondary creditor, is due around £1.7m.
Meanwhile, unsecured claims received to date total £33.4m.
However, ordinary creditors such as contractors, suppliers, customers and staff, will receive not a penny back from the ashes of the business.
The update was given by Teneo in August last year as part of its work to establish the scale of the debts and liquidate assets.
Claims from employees
As of August last year administrators had received 196 claims from employees.
Workers can claim for wage arrears, holiday pay and pension contributions through the administration process.
Any shortfalls can be claimed from the National Insurance Fund, which is also responsible for statutory redundancy payments.
The document stated: “It is estimated that claims will total £258k… however, this has not yet been finalised as there are still active claims.”
Assessing the prospect for payments to unsecured creditors, Teneo said: “It is unlikely that a dividend via the prescribed part will be available to unsecured creditors in any of the administrations.”
SMG had its headquarters in Westhill, Aberdeenshire. It also had offices in Edinburgh, Glasgow and Manchester.
SMG developments left in limbo
At the time of SMG’s collapse, the group’s housebuilding activity included projects in Charleston in Aberdeen, Dunnottar Park in Stonehaven, Monarch’s Rise in Arbroath, Ballumbie Rise in Dundee and Hunter’s Meadow in Auchterarder.
Future plans included 160 potential new homes in Newburgh, Aberdeenshire.
People who had bought properties were left in limbo as all work on site halted.
And those who had newly moved in were also left wondering what was next as their site was left unfinished.
But the past 12 months has seen some positive movement with Teneo managing to secure deals for the sites.
Milestone Developments, owned by husband and wife team Stuart and Nicola Jackson, acquired the Charleston and Arbroath’s Monarch’s Rise developments.
It will see 22 homes completed in Charleston and 62 at Monarch’s Rise.
Muir Homes will finish six properties at Hunter’s Meadow and property developer Dundas bought plots in Haddington.
No further details were provided by Teneo on who bought the other six part-completed sites.
But the sales had raised more than £15.7m in the six month period to July 7.
Stewart Milne administration charges
The most recent report covering the first six months of administration shows Teneo charged more than £6 million in just six months.
The total bill of £6,173,209 means administrators have been charging more than £1m a month. So far, Teneo has not taken any payments.
With the administration expected to continue for several years, this sum will only increase.
The administration for Stewart Milne Group and its subsidiaries has been extended for a further 12 months.
A request made by administrators Teneo to extend the process until January 8 2026, has been approved by the Court of Session in Edinburgh.
Teneo had previously warned it expected to extend the period to “enable sale of the unrealised assets and, in the case of SMG, the conclusion of employment tribunal claims”.
How long the administration process could continue for is unknown but there’s no doubting the impact from the loss of SMG in the north-east.
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