ISG’s collapse in September last year has left a £3.8m-sized dent in a major building services firm’s finances.
Yorkshire-based Ivegate Limited had to take over from ISG on a £15m fit-out project, which it was originally working on as a subcontractor, it revealed in annual accounts published this week
But difficulties recouping funds from ISG left “an exposure of £3.8m”, according to the firm’s annual accounts for the year to 31 December 2024.
In his strategic report accompanying the accounts, Ivegate managing director Andrew Hudson said the year was “more challenging than anticipated with the demise of ISG”.
Underlying profitability was affected because “we were not able to recover all costs associated with their [ISG’s] demise”, Hudson said.
However, he said that the firm had “continued to manage cash well and despite the challenges faced with ISG have largely maintained our liquid position over the period.”
Ivegate was working on a fit-out project for ISG – BT’s Four New Bailey office in Manchester (pictured) – when the tier one contractor collapsed last September.
The firm said its directors “took swift action and were able to engage directly with the client for the main project we were working on for ISG, and stepped in as principal contractor to complete the project” by April 2025.
According to a Linkedin post by Ivegate in July, the project was worth around £15m. In the face of “some uncertain and precarious circumstances”, the firm added, it was able to employ most of the original delivery team and supply chain to complete the project on time and within budget.
The accounts showed Ivegate’s pre-tax profit dropped from £1.2m the previous year (which covered just a six-month accounting period) to £212,000.
Turnover more than doubled from £22.9m to £46.2m, effectively remaining steady on a per-month basis.
Cash fell from £5.4m to £4.7m.
ISG was the sixth-biggest contractor in the UK when it went under, with revenue totalling £2.2bn.
The collapse hit subcontractors, government clients and projects up and down the country, as clients scrambled to replace the main contractor on jobs and minimise supply chain exposure.
Two firms – Vitrine Systems and Seventynine Lighting – directly blamed ISG for their demise, with Vitrine taking a £3m hit when ISG was kicked off a major job.
Last month, M&E specialists Hensall Mechanical Services revealed that ISG’s collapse forced it into a “substantial gross write-off”.
ISG’s collapse also pushed joinery and fit-out firm Taylor Made Joinery Interiors into a strategic rethink, it said in May.
Ivegate declined to offer further comment.