Scores of jobs have been lost at a Tyneside engineering group which has ceased trading and collapsed into administration.

Last year WHP – which consists of WHP Engineering Ltd and WHP Facilities Ltd – was poised to create 25 new jobs after announcing a £2m funding facility. The Gateshead-based business designed and built cleanrooms, clean manufacturing solutions and complex process systems for the healthcare, life sciences and personal care cosmetics sectors, and it had seen significant growth since it was backed by a private equity investor back in 2016.

During the pandemic, WHP had been hit by delays on a number of overseas projects, but following the easing of restrictions demand had grown significantly. However, the firm had fallen into financial difficulties in recent months as it struggled with cost inflation, squeezed margins, labour shortages and insolvencies among contractors and suppliers.

The difficulties led to Chris Petts and James Hichens of Grant Thornton UK LLP being appointed as joint administrators on December 4, and almost all of its 61-strong workforce has been made redundant. The administrators said the design-and-build element of WHP’s business has been particularly exposed to the challenges dramatically impacting the company’s cash flow.

Before Grant Thornton was brought in, directors reviewed their strategic options and considered a potential sale of the shares or the business and assets of the companies, as well as sourcing external funding. However, given the limited timeframe available, it soon became clear that it would not be possible to conclude a transaction while the business was solvent.

As a result, the directors resolved to place the company into administration and conversations with interested parties are continuing.

Administrator Mr Petts said: “Despite its scale and the success achieved over recent years, the severe impact of Covid and recent pressures, including factors such as a contract which was loss-making and the failure of a key sub-contractor, meant that WHP was not in a financial position to continue trading and so we have had to make the difficult decision to cease operations.

“Regrettably, the majority of its 61 workforce have been made redundant. The joint administrators are now assessing options on next steps and have started our engagement with customers and creditors. We are providing support for affected staff in making applications to the Redundancy Payments Service and are preparing for an asset sale.”