Victorian school building company collapses

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A builder that specialises in educational facility upgrades and associated works has become the latest casualty in Australia’s construction industry crisis.

Proclaimed “industry-leading” Melbourne construction company Interface Constructions Victoria Pty Ltd has entered external administration after a string of credit inquiries last month.

Administrators Richard Lawrence and Richard Albarran from accounting group Hall Chadwick were appointed to the company last Tuesday according to a notice of appointment listed on the Australian Securities and Investments Commission (ASIC) website.

A virtual meeting to discuss the future of the company is set to take place on Friday to determine whether a committee of inspection should be appointed.

The company completed the Seaford Primary School redevelopment project in March 2021. Picture: Interface Constructions VictoriaThe company completed the Seaford Primary School redevelopment project in March 2021. Picture: Interface Constructions Victoria

Interface Constructions sports a number of projects on its website including developments in the sectors of childcare, education, hospitality, commercial and residential.

In May 2021, the builder completed a 380-seat performing arts centre for Narre Warren South College that boasted a stage and box office.

The project’s completion followed earlier work on Seaford Primary School which saw redevelopment of the school’s administration building and construction of a new multipurpose sport and art facility.

The company also previously completed works on government-funded schools Kambrya College in Berwick and Bentleigh Primary School.

It’s understood Interface Constructions Victoria was not involved in any current projects that involve building any new government school in Victoria at the time of its collapse.

“The Department is assessing the impact of Interface Constructions Victoria Pty Ltd entering administration on the small number of government school building upgrade and modernisation projects that the company was involved in,” a Victorian Government spokesperson said.

Work was also completed on Bentleigh primary school prior to the company entering administration. Picture: Interface Constructions VictoriaWork was also completed on Bentleigh primary school prior to the company entering administration. Picture: Interface Constructions Victoria

Since entering external administration, a number of Google reviews have emerged online from disgruntled contractors who allege they haven’t been paid by the company for their work.

“[They] haven’t paid a contract painter for a job completed in February. Non-responsive to any communication. Notice of demand sent with no reply. A disgrace to the industry,” one comment read.

A second added: “Haven’t paid their subcontractor builders from the school project in Morwell, will be listed with CreditorWatch shortly affecting there credit rating. Pay your bloody contractors.”

Interface Construction Victoria and its administrators at Hall Chadwick have been contacted for comment.

The company’s collapse is the latest in a spate of construction businesses going bust in recent months, and analysts predict more insolvencies within the sector are on the horizon.

The latest industry data from CreditorWatch’s Business Risk Index report named construction as the second-highest industry to be at risk of businesses going under, with 0.7 per cent of companies going into insolvency.

Kambrya College was another project completed by Interface Constructions. Picture: Interface Constructions VictoriaKambrya College was another project completed by Interface Constructions. Picture: Interface Constructions Victoria

CreditorWatch chief economist Anneke Thompson analysed the data, noting if it wasn’t for the pandemic, more insolvencies within the industry would have occurred sooner rather than later.

“The very low levels of insolvencies in the construction sector during the Covid-19 lockdowns suggest that a number of businesses remained in business that otherwise would not have,” she said.

“The huge amount of government stimulus showered upon the wider economy, and in particular the construction sector, allowed many businesses that were not viable to stagger through.

“These businesses were nicknamed ‘zombie businesses’ during Covid-19, and much higher supply costs, interest rates, labour costs and reducing demand and government incentives are now exposing these companies.”

Last month, brick manufacturing company Brickworks announced it would close its Western Australian subsidiary Austral due to the company running at a loss in recent years off the back of a reduction in building activity.

A week earlier, Queensland-based shed supplier Transportable Shade Sheds went into liquidation after failing to supply customers with their purchases and not paying their workers leave entitlements.

The company is the latest in the sector to cripple under financial pressure. Picture: Interface Constructions VictoriaThe company is the latest in the sector to cripple under financial pressure. Picture: Interface Constructions Victoria

Then in March, some of the most renowned names in the country’s building sector went bust, including Australia’s 13th largest home builder Porter Davis as well as Lloyd Group, which shut their doors within 24 hours of each other.

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About 1236 companies in the construction industry went into liquidation, receivership or administration before March 1 in the 2022-23 financial year, according to ASIC data.

This figure compares to a total of 1284 building companies which closed their doors during the 2021-22 financial year, economy site Macrobusiness reports.

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