Stoke-based Caldwell Construction has been plunged into administration, putting more than 400 jobs on the line.
The company had a turnover of £58.4 million last year, though its operating profit was reported at less than £1 million.
The company’s woes have been blamed on cost increases, delays to schemes and market uncertainty.
Paul Smith, PKF Littlejohn Advisory UK partner, said: “These pressures were exacerbated at Caldwell in recent weeks, placing significant strain on cashflow and operations.
“The PKF Littlejohn Advisory team in Manchester and Leeds had worked closely with Caldwell’s management over the past few months to explore all available options and potential solutions for the business.
“Unfortunately, despite extensive efforts, it was not possible to secure a way forward that would allow the company to continue trading outside of an insolvency process.”
Caldwell has told hundreds of subcontractors to stay home, following a failure to issue payments last Friday.
A Vistry spokesman told The Sun: “We have been in consultation with Caldwell Construction and it is unfortunate that this action has been taken.
“To ensure there are no delays to construction programmes, we are in discussion with alternative subcontractors from our preferred supplier listings to continue the works.”
Caldwell was founded in 2007 and has sponsored the south stand at Stoke City FC’s Bet365 Stadium since 2019.
The firm delivers groundworks for projects across Stoke-on-Trent, Staffordshire, the Midlands, North West and Yorkshire.
Nick Stockley, partner at Mayo Wynne Baxter, said: “As Caldwell Construction Limited has gone into administration, there will be a better chance of either rescuing the company as a going concern or providing a better return to creditors than if the company went into liquidation.
“In a situation like this the administrators will see if there is some chance that the company can be rescued. As the company is making an annual revenue of £58.4m there appears to be a viable business there.
“However, the company may be suffering from a significant cashflow difficulties which leave it “unable to pay their costs as they fall due”.
“The process of administration gives the company protection from immediate legal action whilst the administrators consider how the business can be restructured.”
He added: “That restructure will involve either a significant downsizing restructure and/or a sale of the company’s assets.
“Regardless of what rescue measures are considered, jobs will inevitably be lost and creditors will not be paid, that will have a negative impact up and down the supply chain. The company’s directors will have appointed administrators to protect themselves from personal liability.
“They have also given themselves the chance of setting up a new company which can take on existing contracts and, where possible, limit the damage to the supply chain.”