Alchemy fails to turn Sunley Turriff to gold

Sunley Turriff is reported to have run up a loss of £8m last year on a reduced turnover of £100m. The struggling construction group's plunge further into the red is the result of a series of projects in the southern and London division that went pear-shaped.

Alchemy Group, the turn-around specialist, bought Sunley Turriff about three years ago. It might have expected to work its charm on Sunley by now, but has failed to do so.

Sunley Turriff's chief executive, Alan Barton, has been off work for the past four months, with Keith Hyam holding the reins in the interim.

Two senior managers left in October: Mike Wolfe, managing director of construction; and commercial director Martin Chivers. Finance director Bill Jones left the company at the same time "for pastures new", according to a source.

When asked on Monday about the changes, David Hughes, the new finance director at Sunley Turriff, said: "We have a policy of not commenting to the press."

The company's latest published records (12 months to 31 December 2001) show that the group moved from a £552,000 profit in 2000 to a £3.8m loss in 2001, on turnover up marginally to £118m. The 2002 results have yet to be filed.

During 2001, Sunley's creditors list increased from £33m to £41m, while the company's debtors moved up to £34m, a rise of £8m.

The two projects said to have racked up the biggest individual losses in 2001 are Sunley's scheme at Queenwood, a new golf course in Surrey, and Annandale, a flats project in Golders Green. The project's losses are put at £1.2m and £2m respectively.

Other muddles that took Sunley further into the red were at the Harefield Hospital, where delays have cost a total of £1m, Hackney Empire and Woolwich College.

The Queenwood golf course is up and running, with 350 members. But the struggles in completing the project are reported to have left the client, an American entrepreneur, fuming. His refusal to pay more than the original £4m deal leaves Sunley nursing a substantial loss.

Sunley has been invited to substantiate all additional costs. Without acceptable evidence, the client is declining to cough up the contractor's extra claims.

The large variation in the quality of subcontractors used by Sunley has caused concern. The bad ones apart, the client felt that those with integrity were left in the lurch by Sunley, such that it was "hugely tempted" to pay them directly itself.