An Angus-based plumbing firm has become the second in the region to collapse within a week, following a warning from Travis Perkins of 'sluggish' trading over the coming months.

An Angus-based plumbing firm has become the second in the region to collapse within a week.

The close of Skene Blair in Forfar comes after liquidators were called in to a similar heating and plumbing company – CMS – which employed nearly 40 people on domestic and trade contracts in the east of Scotland.

The 80-year-old company blames its demise on not being paid for work carried out. The company reportedly said: "Money was due in – we are just gutted at the way this has happened."

Forfar councillor Glennis Middleton said: "For a second company in the same line of business to cease trading is an indication of the very difficult times we are in. Unfortunately, they may get worse."

Middleton added: "Cashflow is difficult for every business in this economic climate, but if local firms like Skeine Blair and CMS are not paid on time, then the knock-on effect simply becomes a vicious circle."

The closures come as builders' merchant Travis Perkins reported an increase in profits for the year to January. Despite its success, the company also warned trading would be "sluggish" during 2011.

Its most significant loss of the year so far was through its Wickes stores, which fell by 16% on a like-for-like basis during the first seven weeks of 2011.

The company blamed the drop on the VAT increase and discounted deals by rivals.