Unprofitable building contracts, cost blowouts, planning delays, labour shortages, red tape and other challenges sent nearly 3000 building companies broke in the last financial year, new official insolvency figures show.
However, a 32 per cent rise in total corporate casualties to 10,497 for the financial year to June 16 marginally cut the construction industry’s share of total insolvencies to 27 per cent, from nearly 28 per cent in FY23. Although a sale of the company had been raised with the creditors in June, Mr Krejci said this was not possible as its main assets involved contracts with principals of developer clients, most of whom the administrators had reached commercial settlements with.
The projects being undertaken by Stevens Construction at the time of its collapse included independent living units for the Soldiers Point Bowling Club in Port Stephens and a retirement village project at Erina on the Central Coast for RetireAustralia. Mr Krejci told creditors at the June meeting that their appointment over Stevens Construction was “highly unusual” because the company’s directors had resolved to appoint voluntary administrators much earlier than most other construction firms.“In this matter, however, the directors appear to have kept a close eye on the company cash flows such that the early appointment will likely result in meaningful recoveries for the benefit of creditors,” Mr Krejci said.