'We won't be the last': Building company collapses owing $25 million
An Australian building company has gone into voluntary administration and made all 180 of its staff redundant in what its administrators say is another "casualty of the crisis gripping Australia's construction industry".
PBS owes more than $25 million to its creditors, although that figure could rise in the coming weeks as administrators take a closer look at the business.
"This has been a gut-wrenching decision that we know will impact many lives and livelihoods," the company's board and founder said in a joint statement on Tuesday.
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"However, after months of intense efforts behind the scenes, in the end it was the only responsible course of action available."
PBS was founded as a family-owned firm in Canberra 33 years ago but now also spans NSW and Queensland, and has completed more than $3.6 billion worth of construction work since its inception.
It said unprecedented challenges in the building industry were behind its collapse and warned it won't be the last company to fail.
"Despite tenacity and more than 30 years' industry experience, the unprecedented combination of record material costs, fixed price contracts, labour and material shortages, extreme rain events, floods, bushfires and wars has proved an insurmountable challenge," it said.
"We are the latest, but we won't be the last construction group to buckle under the weight of a broken industry and way of doing business that needs urgent reform."
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RSM Australia Partners Jonathon Colbran, Richard Stone and Mitchell Herrett were appointed as voluntary administrators for the five entities that make up PBS.
"RSM's initial investigations of the financial statements and records of the PBS construction companies have identified more than 1000 secured and unsecured creditors. These creditors are owed a total of more than $25 million," Colbran said.
"These are preliminary figures and may change following more detailed investigations over the coming weeks."
The company's 180 staff were made redundant and paid their full entitlements on Monday before administrators were appointed.
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However, the future of the company's dozens of current construction works is uncertain.
"Between them, the five companies, have 80 residential and commercial projects in various stages of construction, from the early design phase through to various stages of construction," Colbran said.
"All work on these sites ceased immediately prior to the appointment of the administrators and it is not clear at this stage whether works will recommence.
"If works do not recommence, the operations of the PBS construction companies will progressively be shut down and sites will be handed over to customers."
The collapse follows that of luxury NSW apartment builder EQ Constructions, which went into administration in February owing around $50 million, as well as two Western Australian-based firms in January.
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