Tolent founder John Wood reflects on the company’s highs and lows, and explains why his sons have taken on the failed firm’s Teesside operations
When contractors go bust, a newly appointed administrator makes the same announcement: it was COVID-19 that did it. And material prices inflation. Supply chain issues. Labour shortages. Access to credit. Possibly Brexit, too.
The administrators for Tolent – a Gateshead-based contractor with a £200m turnover that collapsed last month – followed the same script. But they also blamed the weather – pointing out that Tolent failed “after the annual Christmas shutdowns and a cold December”.
Of course, all these factors do push companies towards insolvency. But they are issues that have affected everyone. The specific problem suffered by Tolent – as is often the case, and as the administrators did eventually allude to – was a “significantly loss-making job”.
The job was Milburngate, an £85.5m mixed-use campus in Durham that Tolent almost completed before going under. Unfortunately, the firm lost £13m while it was working on it, according to founder John Wood.
“It’s tragic. Tragic. A lot of great people worked with me to build that company up. It’s sad, sad, sad to see what has happened. They have just had some horrendous bad jobs”
John Wood, Tolent founder
While Wood has not worked at the company since standing down as its chair in 2019, he still knows the ins and outs of the business from the countless friends and colleagues he made during decades of service at the firm.
“The loss on that!” he exclaimed in an exclusive interview with Construction News. “£13m on an £85m job! Whether it was due to the COVID situation or a mispriced lump sum, I don’t know. They just got that wildly wrong.”
Wood added the company lost around £8m from its London division after the director Norman Campbell (“a really good guy”) died from COVID-19.
“It’s tragic. Tragic. A lot of great people worked with me to build that company up. It’s sad, sad, sad to see what has happened. They have just had some horrendous bad jobs,” said Wood.
Promising start
Wood set up Tolent in 1983. He was a trained civil engineer and had previously worked as a contracts manager for Balfour Beatty in the North East. Tolent’s first project was a concrete access road, while many of its following jobs were in shipyards around the Tyne.
In its first year the company turned over £300,000 and employed six people: two joiners and four general builders. But its revenue grew rapidly – doubling year-on-year – and by 1987 it was working on the Japanese embassy in Piccadilly.
“We had no presence in London so we bought a house, knocked it into a budget hotel, and used to bring the lads on a trip bus,” Wood recalled. “We’d take them down Sunday teatime, work for 12 days and bring them back. We had a good canteen on the site to make sure they were well fed. It was a big success.”
At its apex – in the years before the global financial crisis of 2008 – Tolent had offices in Newcastle, Teesside, Leeds, Manchester and London. It built Newcastle City Library and Hadrian’s Tower, the tallest building in the city. It also fitted out 120 Fleet Street for Goldman Sachs, beat Balfour Beatty to build Durham County Cricket Club’s ground in Chester-le-Street and constructed an enormous new headquarters for Sage Group in Newcastle.
Remembering the pre-qualification interview for the Sage HQ, Wood said: “It was [Sir Robert] McAlpine, Amec – still in their pomp – and Tolent. Manchester United, Chelsea and Hartlepool. And Hartlepool won.”
When the company officially went under on 13 February, 313 staff were made redundant on the spot. Wood said the redundancy of staff is especially sad given the business had “very low churn”, with “a lot of people that had been there for 30 years, which is unusual for tradesmen”.
And naturally, the ripples from Tolent’s collapse have spread far and wide. The business was working on a number of projects around the North East, including a construction academy and a flagship regeneration scheme for Sunderland City Council – both projects backed by levelling-up funds from central government.
Then there are the subcontractors. Durham-based bricklaying business High Rise Brickwork Ltd said on LinkedIn that it would be “taking a hit due to the circumstances and working on four projects for Tolent Living”.
James Winter, director at Durham-based heating and plumbing contractor JD Winter, meanwhile, said on the same platform that his firm “will be facing a huge financial loss” from the administration of Tolent Living, adding: “I hope all other subbies involved will get through this unscathed.”
From the ashes
It’s not all bad news though – several jobs have since been saved by other firms, with Wood having a hand in one such operation.
Before Tolent’s collapse, Wood had been working with Brims Construction on a takeover bid for Tolent’s Teesside operation. Brims, a 16-year-old, £38m-revenue company with 90 staff, is run by three former Tolent staff – two of whom are Wood’s sons.
“I knew that Tolent was having a tough time and were looking to sell bits,” he said. “And I knew that the Teesside operation was always steady – it was always about mid-£20m turnover and [regional director] Ricky [Halton] always made a steady return.”
When news of the collapse came through, Wood and the Brims directors realised they did not have to buy Tolent’s Teesside operation – instead they headed to Teesside to effectively seize the business. They started by asking the former Tolent workers in Teesside if they were up for it. And then, one by one, they told clients they could do the same job for the same money with the same people.
These pitches were successful, so Halton, who Wood had hired out of university decades earlier, was reappointed as director for Brims’ new Teesside business. Brims is also buying Tolent’s Teesside office building, with all its fixture and fittings, from the administrators for £500,000.
A further 33 jobs have also been saved by Re:Gen Group, which specialises in refurbishing social housing across the North East of England. The group has set up a new subsidiary, Re:Gen Solutions, which will employ former Tolent staff to carry out asbestos work.
Not everyone has been so lucky, though. Wood said his former secretary of 30 years – a “gem” of an employee – was still searching for a new job. “It really is the end of an era,” he said. “It’s tragic”.
