Dodgy? Not sure but with most builder liquidations, there is an element of dodgyness and insolvent trading.
Gary Deane Constructions, DJ Builders & Son go into liquidation
TWO long-established Queensland construction companies have gone into liquidation in the past month, raising the spectre of more building industry insolvencies ahead.
Loganholme-based Gary Deane Constructions has collapsed owing creditors an estimated $13 million while DJ Builders & Son, also based in Loganholme, is being wound up with debts of approximately $2 million.
The liquidations come as insolvency experts SV Partners warns of tough times ahead for the building industry, with up to 405 construction businesses in Queensland at high risk of financial failure over the next year.
Gary Deane Constructions liquidator Jonathan McLeod said the cause of the company’s failure, which reflected growing insolvencies in the sector, was being investigated.
Mr McLeod said it was too early to say what return creditors would receive from the company that was founded in 1987. Gary Deane Constructions specialised in earthworks, roads, weirs and other civil infrastructure.
The slump in Queensland’s construction industry, which has seen investment in major infrastructure projects slump more than $30 billion over the past year, is now hitting companies which had survived previous downturns.
Founded in 1973 by brothers-in-law Lawrie Dorè and Greg Jenkins with only $1700, DJ Builders built more than 3500 homes across south-east Queensland along with unit developments, industrial warehouses, child care premises and commercial buildings. The company had a turnover of about $30 million at its peak.
According to Queensland Building and Construction Commission records, DJ Builders’ licence was suspended in March for failure to satisfy financial requirements.
The suspension was lifted in May but the company’s liquidator Glen Oldham said the time lost meant it had been unable to maintain its cash flow in increasingly tough times. “It also was finding commercial and other projects were coming off the boil,” Mr Oldham said.
He said about 10 homes and several larger residential and commercial projects had been left uncompleted by the company. Representatives of both Gary Deane Construction and DJ Builders were unavailable for comment yesterday.
The current oversupply of unit developments in Brisbane is putting further pressure on developers, especially smaller operators who do not have the deep pockets of larger competitors.
Fortitude-based Trac Constructions was liquidated earlier this year after leaving seven multi-storey projects uncompleted projects around the city and debts of in excess of $9 million.Upper Mt Gravatt-based SX Projects (Qld), run by Sydney-based builder Vince Battaglia, was wound up owing creditors an estimated $4.6 million.
SV Partners managing director Terry van der Velde said the construction industry is facing pressures like no other thanks to recent softness in the sector as well as rising labour costs.
“We have seen some improvement across the construction industry in recent months, but that won’t be enough to save many of the businesses already on the brink of financial failure,” said Mr van der Velde.