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Failed contractor Simon Construction had a pension deficit of more than 拢30m when it went under, with a report by the administrator revealing that unsecured creditors are owed more than 拢54m.

The Lincoln-based business collapsed at the end of October, along with its parent Simons Group and two sister firms involved in developments and design.

In its last report and accounts for the year to March 2018, Simons Group had a turnover of 拢105m, returning to the black with a pre-tax profit of 拢704,000 following a 拢3.9m pre-tax loss the previous year.

The bulk of the group鈥檚 turnover was from its construction business, with income from this division in the year to March 2018 standing at 拢99.4m and a pre-tax profit of 拢876,000.

FRP Advisory, the administrator, said Simons Construction owes around 500 unsecured creditors just over 拢54m, with its pension scheme liability standing at 拢30.3m.

In a separate report for Simons Group, FRP said the firm had been making payments of around 拢90,000 a month to reduce its pension deficit and added: 鈥淭he group and subsequently the company were relying on Simons Construction to generate sufficient profits and cashflow to afford the scheme payments.鈥�

But FRP said a cost-cutting plan introduced by Simons Construction was 鈥渘ot sufficient to offset the losses being incurred from project delays. The company could not aggressively reduce its cost base in the short-term as it needed capability to meet higher turnover levels.鈥�

Simons made an offer to the pension scheme鈥檚 trustees at the beginning of October 鈥渢o remove the pension as a liability of the company and the group鈥�. But the offer was rejected six days later after a review by the pension regulator and the Pension Protection Fund.

鈥淔ollowing the rejection, FRP assisted the directors to continue to plan for an insolvency scenario that would maximise the return to creditors (both the company and group),鈥� FRP鈥檚 report added.

FRP was formally appointed on 29 October. It had been brought in seven months earlier to address 鈥渄eclining cash balances and improve underlying performance鈥�.

Its administrators鈥� report for Simons Construction places a figure of 拢8.9m against contract cost accruals, while employees are owed nearly 拢1.5m in missing redundancy claims and other payments.

HMRC is owed just over 拢527,000 while hundreds of trade creditors are facing hits totalling more than 拢12m.

Among them, Nottingham electrical firm Imtech is owed 拢951,000 and East Yorkshire cladding contractor Ashford Cladding Systems is due 拢578,000.

Others facing losses include recruitment firm Hays, owed nearly 拢28,000, lift firm Kone, due close to 拢176,000, and Wakefield-based structural engineer Nationwide Structures, owed more than 拢447,000.

FRP said there 鈥渨ill be funds available to make a distribution to unsecured creditors鈥� but declined to say how much. It added: 鈥淚t is currently estimated that the preferential claims will total c拢73k, being the employees鈥� preferential element for holiday pay.鈥�

In its report for Simons Group, creditors are owed nearly 拢16.5m with the largest figure being a 拢6.8m pension scheme liability.

Simons Group was established in 1944 and employed 124 staff at the time of its collapse.