Lancsville Construction's plans to get insurance cover restored

Lancsville Construction is fighting to restore its reputation. It has declared itself willing to make fundamental changes in order to get all the leading construction insurance providers back on board.

Such a radical move would reassure subcontractors who are currently unable to obtain cover when working for Lancsville.

David Standish, a business restructuring adviser who works for accountancy group KPMG, is due complete his review of Lancsville within the next 10 days.

Mark Henry took over the reins at Lancsville five years ago from his father Billy founded the company. With a new leader in charge, annual turnover has shot up from £20m to £130m.

Eight weeks ago concerns surfaced when sub-contractors discovered that insurers were no longer prepared to cover the value of their work for Lancsville. Henry told CJ at that time that insurance firm Euler Hermes’ verdict had been that Lancsville was overtrading.

“We asked Standish to come in,” said Henry. “His report will show that we have a favourable profit and loss account and that the company is healthy.

“His instruction is to help us get credit insurers aback on board. We want Hermes to find Lancsville to be a company it will provide insurance on.

“When KPMG’s independent report is out, we will act on it in such a way that insurance cover is restored.”

So confident is Henry that things are turning for the better that he already has dates in the diary with construction’s four major credit insurers. The meetings will be held in three weeks’ time.

Management accounts for Lancsville, drawn up by chartered accountants Hillier Hopkins show turnover in the 12 months to 31 January 2008 was £136m and well ahead of the figure of £69m in 2007.

The latest management accounts also show pre-tax profit at £7.8m.