ISG Ltd (formerly Interior Services Group) is a privately owned, London-based construction company that employed around 3,000 people, mainly in the UK, mainland Europe and the Middle East. In terms of turnover, at one point it was the sixth biggest contractor in the UK; it went into administration in September 2024.
Founded in 1989 as Stanhope Interiors, it was renamed Interior plc following a management buyout during 1995. Two years later, the business, which was then trading as Interior Services Group, was floated on the Alternative Investment Market of the London Stock Exchange. It expanded rapidly during the late 1990s and early 2000s, branching into construction management and facilities management. During the mid 2000s, the firm opted to reduce its presence in some markets, such as France and Germany, while embarking on an spree of acquisitions, including Propencity, Commtech Asia, and Pearce Group.
Following the start of the Great Recession in the late 2000s, both orders and profits at the company dipped sharply. In response, ISG sought out new business on the still-growing international market. During March 2016, ISG was taken private by the US-based firm Cathexis (the investment vehicle of Texan billionaire William Harrison). During the early 2020s, the company's fiscal condition was impacted by the COVID-19 pandemic. In September 2024, following months of concerns about its finances and a stalled sale of the group, eight ISG businesses entered voluntary administration (and 11 others went into liquidation); it was called the biggest collapse in Britain's construction sector since Carillion in 2018. At the time of its collapse, ISG was working on over 600 construction, fit out and retail sites, including 69 UK public sector projects worth at least £1.84bn. It owed over £1.2bn. Around 2,200 ISG UK employees were immediately made redundant.
History ISG originated as Stanhope Interiors, which was founded in 1989 by David King. During 1995, King led a management buyout of the firm from the indebted Stanhope in 1995, when it was renamed Interior plc.
During early 1998, Interior PLC opted to move into construction management via the launch of a new subsidiary. Around this time, the firm experienced a period of rapid growth.
In 1997, the business, which was then trading as Interior Services Group, was floated on the Alternative Investment Market of the London Stock Exchange. By this time, much of the firm's work involved kitting out offices across the City of London. During 2003, it opted to reduce its presence in the poorly performing economies of France and Germany. One year later, David King became Interior Services Group's chief executive while Roy Dantzic was appointed its chairman; other changes around this time included the sale of the firm's facilities management division to Erinaceous for £10 million.
During 2005, Interior Services Group paid £12.5 million in exchange for the social housing specialist Propencity. One year later, it also bought the facilities management firm ISG Asia for £4.6 million. In 2007, the firm acquired the regional contractor Pearce Group in a deal that was potentially valued at around £20 million; this purchase expanded Interior Services Group's regional coverage, which had traditionally centred around the southern, eastern and northern regions into the west of England and South Wales, as well as expanding its presence in the affordable housing and student accommodation sectors. That same year, it also purchased the fit-out specialist Cathedral Contracts in exchange for £11.8 million, and technical consultancy firm Commtech Asia for £1.2 million.
During the late 2000s, the company's profits and order book both dipped sharply; this was mostly attributed to the wider economic downturn known as the Great Recession. In September 2011, Interior Services Group reported a record high in terms of revenue while profits for its struggling south west construction division had roughly halved. During the early 2010s, the firm's then-chief executive David Lawther responded to the decline by reorienting the company towards the still-growing international market. In April 2013, the firm officially changed its name to ISG plc. That same year, its construction arm underwent restructuring, which involved the streamlining of its eastern construction division while retail activity was placed under a single management team.
In March 2016, ISG was taken private by the US-based firm Cathexis (the investment vehicle of Texan billionaire William Harrison), previously a substantial shareholder, in a £85m takeover. At that time, the remuneration of ISG's highest paid director, David Cossell, tripled to £3m.
In May 2021, ISG reported its results for 2020, affected by the COVID-19 pandemic. Revenue was down 23% to £2.0bn (2019: £2.6bn); underlying EBITDA for the year was £37.6m (2019: £63.3m). Fit-out was ISG's biggest source of revenue (£1,042.3m in 2020), followed by construction (£690.8m) and engineering services (£293.3m).
In the year to December 2021, ISG reported revenues of £2.263bn, still not back to its pre-pandemic peak, while pre-tax profits increased to £18.9m, from £8.9m a year earlier; fit-out remained ISG's largest service line, the company had 3,001 employees and derived £1.8bn of its revenues from the UK. In early 2022, ISG acquired a majority shareholding in ESS Modular, selling it later that year to Cathexis. In 2022, ISG revenues slipped to £2.19bn, while pre-tax profit was down 38% to £11.5m. ISG's order book was adversely affected by the August 2022 suspension of the Britishvolt gigafactory in Blyth, Northumberland, and delays to a film studio project in Hertfordshire. In November 2023, ISG CEO Matt Blowers and other senior staff held urgent meetings with stakeholders to reassure them about the financial status of the group.
Appointed in 2022, Blowers left ISG as the business underwent a 'fundamental reset' in February 2024, being replaced as CEO by Zoe Price. There were also changes affecting the company secretary, vice-chair and chief financial officer roles; in the last five years, ISG's highest-paid executive had been paid over £18m.
In October 2023, a subcontractor's winding-up petition stoked staff and supplier concern about ISG's financial stability, and the company began to look for a buyer or a cash injection from Cathexis. In July 2024, ISG finances incurred a £14m hit after a key supplier went into liquidation, but, despite interest from 11 private equity and trade buyers, the sale process halted after ISG received an offer for the group; ISG staff and suppliers were told the company would be sold by Cathexis in the near future, and a significant investment would recapitalise the business and support a return to normal trading. The prospective buyer was reported to be a UK-registered holding company called Antipodean Holdings with two equal shareholders: South African Andre Redinger and Australian James Overton.
Administration No further progress on the sale was announced. Administrator Ernst & Young (EY) later said that on 2 September 2024, Antipodean had dropped its offer to £1 while remaining committed to funding working capital needs. However, Antipodean provided no evidence it had the necessary funds. ISG's board then reopened talks with a prospective buyer of ISG Fit Out, but this buyer later dropped out, amid concerns about the group's VAT debts and novation of contracts.
Late on Thursday 19 September 2024, six ISG Ltd subsidiaries – ISG Construction, ISG Engineering Services, ISG Retail, ISG Jackson, ISG UK Retail and ISG Central Services – were reported to have applied to go into administration. ISG Fit Out, which accounted for around £500m of ISG revenue and was profitable, was not included in the initial application, but further applications followed on 20 September 2024, including ISG Fit Out and ISG Interior Services Group (on 24 September, Cathexis-owned ESS Modular and subsidiary Spatial Initiative also went into administration, with the loss of 100 jobs, and owing £7m, though its insolvency was unrelated to ISG's collapse). ISG's failure was described as UK construction's biggest collapse since Carillion in 2018. It later emerged that, in addition to the eight businesses that went into administration, a further 11 ISG businesses, including the holding company ISG Ltd, were liquidated. Together, these businesses owed £111.2m to other ISG companies and £53.4m to HMRC.
According to Construction News, some site workers were told that the firm – ranked by turnover as the sixth biggest contractor in the UK – had gone under, amid rumours that it had been struggling to pay subcontractors. One supplier had filed a winding-up petition against ISG Engineering Services; other suppliers facing huge debts criticised ISG for "stringing them along" for months.
In a late night email to staff on 19 September, CEO Zoe Price apologised for the news leaking out ahead of a planned announcement on Monday 23 September 2024. She explained ISG's problems stemmed from legacy issues relating to large loss-making contracts secured between 2018 and 2020, which, as a result of the COVID-19 pandemic, had a significant effect on liquidity. In the circumstances, "it was not possible to conclude a sale, as the purchaser could not satisfy the funding needed to recapitalise the business"; Cathexis had also looked unsuccessfully at refinancing the company, and selling individual businesses had not been practicable in the timescale, leaving "no option but to file for administration". Andre Redinger of Antipodean Holdings disputed Price's position on the sale. A "fair deal" had been on the table, he said; Antipodean had a robust turnaround plan which it believed could save jobs and return ISG to growth and profitability, but ISG suddenly stopped communicating on 12 September. Antipodean said it had also identified a senior industry figure to be ISG's new chairman.
EY's appointment as administrators was confirmed on 20 September 2024. Most of the 2,380 people employed by ISG in the UK were made redundant immediately, with 200 initially retained to assist the administrators, by December 2024, this had reduced to 22. Regarding the failed sale to Antipodean Holdings, a joint EY/ISG statement said: "the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent." Redinger defended Antipodean's approach saying ISG's liabilities were "three or four times" his first offer, hence the lower bid; the initial bid was based on an assumed deficit of £200m, but the figure jumped to over £500m, with rival firms suggesting the total deficit could be over £800m. Later, in December 2024, EY reported ISG had total debts of £1.1bn (including inter-company debt, cash owed to trade creditors, and a £100m tax debt); its overdue accounts for 2023 would have reported £148m in contract write-downs and a £133m pre-tax loss, but the company had only £35m in cash and assets.