04-04-2024 - 10am.
Builders have a myriad of excuses for liquidating now thanks to Covid and while it has played a role in some builders demise, their own lack of understanding of the business side of industry does not help them.
Most builders no longer swing a hammer, pour concrete or stand a frame. They have subbies for those tasks.
Today its more about management. Managing customers, staff, purchasing in the right sequence and at the right price and management of subcontractors. Lets not forget that sales must have a sustainable profit margin built in. Organising skill is essential for a successful business but especially in the construction industry.
Good builders have these systems in place and succeed but some of your run of the mill builders lack people skills, let alone financial management acumen.
The disreputable builders think we are stupid, the excuses for non payment or contrived backcharges have all been heard 100 times before so guys, you need to come up with something better and be a bit more original when it comes to the glib BS.
Project Trust Accounts
Its time the Qld Government implemented the promised Project Trust Accounts and stopped pandering to the MBA. Its the one thing that will keep subcontractors money safe. It has been postponed numerous times and is a disgrace that it has been delayed for so many years by a gut less incompetent Labor Government who have gone well past their use by date.
Recently we went back through our private members forum to find the builders who have liquidated in Queensland over the past 7 years but it goes far beyond that (list of Liquidated builders below).
It was no surprise to find there was a steady flow of liquidations over those 7 years with no real spike during Covid. In Qld we had an average of one every 2.5 weeks and there is more we have missed so approx every 2 weeks we can expect a builder to liquidate in Queensland.
That's why being a subbie in the industry is like playing a game of Russian Roulette.
The most vulnerable to extinction are those whose turnover grows fast then plunges the following year. Its not often that a builders turnover plunges 2 years running because after the first year, they have liquidated into history making lawyers and liquidators exponentially richer and Subbies poorer.
An example of that is a builder who liquidated in March 2022:
Financial Year - Number of Jobs - Value
2020/2021 16 $10,175,113.00
2019/2020 230 $59,508,731.30
2017/2018 80 $24,687,938.50
2016/2017 155 $36,966,922.00
2015/2016 258 $64,846,338.80
2014/2015 196 $45,154,571.94
2013/2014 230 $44,950,849.19
When the money if flowing in they can afford to increase the company infrastructure to handle the larger volumes but they don't react fast enough when the volume falls off a cliff. They then just hemorrhage to the inevitable death.
But one thing most of them do very well is look after themselves on a personal level.
I know of many liquidated builders living in luxury while subbies are left picking up the pieces of huge financial losses.
One thing that became very apparent is the number of excluded directors who start phoenix companies with their son, daughter, wife or mate as director while they operate as the shadow director of the new business.
I have written proof of this but the QBCC are as useless at tits on a bull when it comes to anything outside the QBCC Act and QPS won't touch it. How many liquidated builder directors have you seen face court or have been locked up? Yeah, same here, none!
Here is turnover for another builder who liquidated in May 2022. Its all good on the way up but when it turns down almost 30%, that's when the cracks appear.
Financial Year - Number of Jobs - Value
2021/2022 132 $38,506,427.00
2020/2021 214 $57,545,783.00
2019/2020 120 $28,038,300.50
2018/2019 67 $15,361,390.44
2017/2018 69 $16,855,890.00
2016/2017 52 $12,278,903.00
No doubt there are genuine issues with Covid price increases but failures are also attributable to lack of forward planning and in many cases sound business skills.
In many high profile liquidations the builder claims its someone elses fault but our forum shows cracks appearing up to two years prior with subbies concerned about slow payment and in some cases, no payment.
About this time we see a number of increases in QBCC Monies Owed Complaints and weak excuses for ambit claim back-charges.
Another example below. When you see turnover drop, its time to extricate yourself from that builder.
Financial Year Number of Jobs Value
2016/2017 3 $585,000.00
2015/2016 7 $2,134,217.00
2014/2015 22 $4,620,538.00
2006/2007 24 $4,289,721.00
2005/2006 42 $6,927,782.00
2004/2005 14 $2,305,974.00
There is a builder under discussion now who has a history of prompt payment but this year that is changing which is one of the first signs of trouble.
I took the time to look back through 450 threads and looked closely at 145 of the builders who liquidated.
The majority of them have the same theme creeping through of lower turnover, excuses, late payments, "we will pay you when we get paid" and obvious cash flow issues.
Many of them took 2 years from the time the talk started to get to the point of liquidation but it's almost always with the same result.
Its a bleak construction landscape out there but in reality its not much different to what it was 15 years ago.
The definition of "Einstein insanity" is to do the same thing over and over again and expect a different result and that is what the building industry in Queensland is.
Subcontractors, be a part of SubbiesUnited's Private Members Forum and help us stop the rot!
Subbies add a level of protection to your business and join SubbiesUnited and make use of our private members forum for up to date information.
Building Management Qld Pty Ltd
Black Bean Pty Ltd
Mienstock Pty Ltd
Bluestone Constructions
Matthews Group
Buildsure QLD Pty Ltd
A C Jones Builders Pty Ltd
Placecorp (Australia) Pty Ltd
Insignia Homes Pty Ltd
DC Living Pty Ltd
KALKAMONING PTY LTD
St Hilliers Contracting Pty Limited
Midson Construction (NSW) Pty Ltd
Midson Construction (QLD) Pty
G C B CONSTRUCTIONS PTY LTD
DCB Developments Pty Ltd
LLOYD GROUP (QLD) PTY LTD
A B Hill Constructions Pty Ltd
Profin Building Solution Pty Ltd
Trac Construction (QLD) Pty Ltd
Skyfield Homes Pty Ltd
GWM CONSTRUCTION PTY LTD
Batir Pty Ltd
Maguire Building Services Pty Ltd
Future Urban Residental Pty Ltd
Hinterland Construction Pty Ltd t/a Unique Country Homes
Infocus Homes Pty. Ltd
Powell Constructions Pty Ltd
Finlay Constructions Pty Ltd
Homes R Us (Australia) Pty Ltd
Classic Homes (QLD) Pty Ltd
Astute Projects Pty Ltd
The Ashtay Group Pty Ltd trading names - CMS BUILDING & DESIGN,CMS Building and Design,The Ashtay Group P/L,CMS Building & Design.
PCA (Qld) Pty Ltd (Probuild)
Privium Pty Ltd
PDH QLD Pty Ltd (Porter Davis Homes)
Final Form (QLD) Pty Ltd
Resources for Project Q Pty Ltd (MATRIX INDUSTRIAL & COMMERCIAL PROJECTS PTY LTD)
Carmichael Builders Pty Ltd
Glenzeil Pty Ltd
Desu Designer Homes Pty Ltd (Also Nu Steel Homes)
Xureb Pty Ltd (formerly Rivercity Homes (Mackay) Pty Ltd
Development Delivery Construction Pty Ltd (D Del)
CKP Constructions Pty Ltd
CMF Projects Pty Ltd
AKS Homes Pty Ltd (Ignite Homes)
AKS Homes Pty Ltd
Queensland One Homes Pty Ltd
RJ Builders Pty Ltd
DJ Builders & Son Pty Ltd
Ware Building Pty Ltd
Ostwald Bros Pty Ltd
Rimfire Constructions (QLD) Pty Ltd
CRCG Rimfire Pty Ltd
Home Builders QLD Pty Ltd
Red Group (Aust) Pty Ltd (Metro Builders)
Dig It Landscapes Pty Ltd
PRB Construction Pty Ltd STIRLING HOMES QLD,Stirling Homes Gympie,Stirling Homes Queensland
Stirling Investments QLD Pty Ltd
Irwin Homes Pty Ltd
J M Kelly Builders Pty Limited
Sommer & Staff Constructions Pty Ltd
Dreambuilt Homes Pty Ltd
Southern Cross Constructions (ACT) Pty Ltd
Cullen Group Australia Pty Ltd
Denbrook Constructions Pty Ltd
Local Build Pty Ltd,
My Home Building Group Pty Ltd
Andrew Roberts Builder Pty Ltd
Chelbrooke Homes Pty Limited
HARRIS CONSTRUCTIONS PTY LTD T/A GJ GARDNER HOMES SPRINGFIELD/RIPLEY,GJ GARDNER HOMES SPRINGFIELD LAKES
A C Jones Builders Pty Ltd
Bloomer Constructions (QLD) Pty Ltd
MJM Building Services Townsville Pty Ltd
Sydney Construction Group Pty Limited
National Projects Qld Pty Ltd
Queensland Platinum Homes Pty Ltd
Mac Pac Constructions Pty Ltd
Nexus Building Group Pty Ltd
TIEPA CONSTRUCTIONS PTY LTD
W3D Constructions Pty Ltd
Van Rossum Homes Pty Ltd
Casa Building Group Pty Ltd
G UP Constructions Pty Ltd
National Construction Management Pty Ltd
JNC Built Pty Ltd
Pivotal Homes Pty Ltd
Lanskey Constructions QLD Pty Ltd
Araman Homes Pty Ltd
Landmark Building & Developments (Qld) Pty Ltd Ta Landmark Building Pty Ltd
Moksha Constructions Pty Ltd
Solido Builders Pty Ltd
SMC Building & Construction Pty Ltd
Kong Development Group Pty Ltd
Austyle Building Pty Ltd
Planbuild Homes Pty Ltd
ACN 080 897 669 Pty Ltd , STARCREST CONSTRUCTION PTY. LTD. (Formerly HEINRICH CONSTRUCTIONS PTY. LTD. – HEINRICH FORMWORK PTY. LTD.)
Leaf Building Group Pty Ltd
Verus Construction Pty Ltd
Corio Homes Pty Ltd
Butter Wine Pty Ltd (formerley Onebuild Projects Pty Ltd)
Maylily Group Pty Ltd (Herra Group Pty Ltd)
Muggeridge Constructions Pty Ltd
NTM Builders Pty Ltd
B. Stevens Builder Pty Ltd
CGS Constructions (Qld) Pty Ltd
Val Eco Homes Pty Ltd
QNV Constructions (QLD) Pty Ltd
Cleary Group Pty Ltd
Ayla Constructions Pty Ltd
C.M.G. HOMES PTY. LTD
MORELAND & WILLIAMSON PTY LTD
Anatolia Constructions Pty Ltd
Qld Cedar Construction Pty Ltd
Bulkbuild Pty Ltd
H K DEVELOPMENTS PTY. LTD.
Colossal Homes (QLD) Pty Ltd
3LP Construct Pty Ltd
Mayford Contracting Pty Ltd
Lusso Concepts Pty Ltd
Ri-Con Contractors Pty Ltd
Bosfield Group Pty Ltd
TPD Builders Pty Ltd
HOWARD THOMPSON CONSTRUCTIONS PTY LTD
Millennium Building Group Pty Ltd
Truform Pty Ltd
DCG Company Pty Ltd
Multicrete (Aust) Pty Ltd
Australian Sunshine Building Group Pty Ltd
Hufcor Pty Ltd
Sidhu Developments Pty. Ltd
Mish Developments Pty Ltd
Command Building Services Pty Ltd
Cruz Construction Pty Ltd
T & M Davis Building Pty Ltd
MJM Projects Pty Ltd t/a Vystal Construction
Condev Construction Pty Ltd
Delab Construction Services Pty Ltd
Grocon Constructors (VIC) Pty Ltd
Costruire Pty Ltd (Opes Projects Pty Ltd)
Altura Construction Pty Ltd
Qube North Pty Ltd
Pevitole Pty Ltd
Surat Basin Builders Pty Ltd
Acentra Pty Ltd
T.P. Turner Pty Ltd
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