Scottish commercial interior fit-out and refurbishment contractor Worksmart Contracts has appointed liquidators, with the intention of winding up the business "as soon as practically possible".
The Kilmarnock-based firm said that it had been challenged by "several external factors", such as Brexit and the COVID-19 pandemic.
It said these factors "squeezed" profit margins to an extent that the business was no longer financially stable – adding that "slow payments and "client delays" had added to its troubles.
Wylie & Bisset has been appointed as liquidator of the firm, which had worked on famous projects such as London's Gherkin building.
Worksmart Contracts owed creditors a total of just under £1m in its latest published accounts for the year ended 30 June 2021, of which £839,775 needed to be paid within one year. It had net assets of £397,618.
Wylie & Bisset managing partner Donald McKinnon explained how the firm had seen its turnover fall from "circa £9m to around £5m-£6m" during the pandemic – leaving its directors with no other choice but to wind up the business.
McKinnon said: "Worksmart's directors have reached the view that the business cannot continue to trade due to a number of factors. Competition is fierce and profit margins have been squeezed to the extent that the business is no longer financially sustainable.
"Furthermore, it appears that in response to COVID, Brexit and the recession, Worksmart's customers are tightening their purse strings, with the result that the level of work required to sustain the business no longer exists."
The contractor had delivered more than £100m worth of projects over the last 20 years, according to its directors. This included securing jobs from the Scottish Government. It had a workforce of 24 people.
Worksmart Contracts managing director Steve Neilson said the directors were "devastated" at having to make the decision to appoint liquidators.
"Over the past few years, Worksmart has been challenged by several external factors, including recession, Brexit and, more recently, the pandemic.
"The consequences of these factors have resulted in persistent cost increases for the business, including in materials, labour, utilities and fuel, resulting in the highest inflation rate in over 40 years. This increase in business operating costs has been coupled with recent National Insurance and tax increases.
"The business has also had to cope with significant bad debts owed to us and, in general, slow payments from some clients over recent months."
Neilson added that revenue had been affected by "numerous and consistent client delays, uncertainty and indecision in starting new project work" – leading to the workload "stagnating in recent months".
"With the ongoing uncertainty in the general economy, we foresee this trend continuing and our workstreams being further reduced and delayed.
"As a result of these factors, and despite our continued efforts, we have taken the regretful step to appoint a liquidator to help manage the situation."
Construction firms continue to feel the effects of the COVID-19 pandemic, with 23 construction-related businesses collapsing in July.
Earlier this month, Construction News reported on fears over the future of another Scottish construction firm, McGill Facilities Management, after it told the Daily Business that it was following the advice of a restructuring specialist after Lloyds Bank removed its working-capital bank facility.
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