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The administrator for a Hertfordshire contractor which had been business for more 30 years has said one of the reasons it collapsed was because of 鈥渘on-recoverable鈥� rises in inflation and labour.

Stevenage contractor ARJ Construction saw pre-tax profit rise 11% to 拢2.8m on revenue up 61% to 拢117m in the year to April 2023.

But at the end of this April, the firm called in FRP Advisory as administrators with more than 100 people losing their jobs.

In an update by FRP, the firm said ARJ had 鈥渆xperienced a tough trading environment鈥� and added: 鈥淭he company was carrying a number of loss-making projects through this period which have arisen as a result of non-recoverable inflationary increases across materials and labour.鈥�

FRP said the firm would not have been able to complete its jobs 鈥渨ithout significant investment鈥�.

It added: 鈥淭he cash forecasts [for ARJ] presented a real prospect the company would very quickly run out of money rendering it unable to trade. Efforts were made by the directors to secure the future of the business but ultimately these were unsuccessful.鈥�

ARJ was set up in 1991 with its typical jobs focussing on residential schemes of between 100 and 200 units with an average contract value of between 拢20m and 拢25m. The projects would typically last two years, FRP added.

According to the update, trade creditors and other suppliers are owed around 拢9.3m following ARJ鈥檚 collapse. Unsecured creditors have been told they can expect to see some money back but the exact amount is not yet known.