Major plumbing and electrical company collapses, putting up to 170 jobs at risk as further sign of crisis in construction sector
- The Victorian Plumbfirst Group goes under
- Six companies are involved, with up to 170 jobs at risk
A major plumbing and electrical company has collapsed, making it the latest victim of Australia’s faltering construction industry.
Plumbfirst Group, a Victorian-based plumbing and electrical company comprising six companies, was placed under voluntary administration on Wednesday, blaming rising material costs for the crisis.
The amount of debt the company owes and the number of jobs it is working on is currently unknown, but it is clear that the jobs of about 170 employees are currently in limbo.
Alan Walker and Glenn Livingstone of WLP Restructuring were appointed as voluntary trustees of the company.
It joins Victoria’s largest private plumbing contractor, Richstone, and Melbourne-based CDC Plumbing and Drainage, both of which have entered voluntarily in the past two months.
Plumbfirst Group (pictured), a six-company plumbing and electrical company, was placed under voluntary governance on Wednesday with about 170 jobs at risk
The company consists of six companies: Bblautofirst Pty Ltd, Comfyfirst Pty Ltd, Elecfirst Pty Ltd, Firstaction Group Pty Ltd, Plumbfirst Pty Ltd and Plumbfirst Elecfirst Comfyfirst NSW Pty Ltd.
WLP Restructuring made an urgent appeal to a party to take over the group or inject money into the companies to keep them running.
“As that process progresses, the trustees will continue to trade the group with no interruption to normal operations expected at this stage,” a statement from WLP Restructuring reads.
“The decision to appoint administrators was taken by the Group’s directors after rising material costs negatively impacted financial performance,” said Mr. Walker.
While increased material costs caused the company to falter, Walker believes the company’s 170-strong workforce is attractive to potential buyers.
‘The group comprises one of the largest plumbing and electrical contractors in South East Australia with an established 170 employees and a customer base.
“We are confident that a process to sell or recapitalize the group can proceed quickly with the aim of maximizing recovery for creditors and minimizing disruption to staff and customers.
“We are already working closely with management, employees and other stakeholders to do everything we can to continue trading the group on a business-as-usual basis, while exploring viable options to secure the future.”
The first legal meeting of creditors will take place on 24 April.
The Plumbfirst group of companies cite higher material costs as a key factor in their faltering performance and are the third Victorian plumbing contractor to go into voluntary receivership in the past two months
Richstone, a fellow Victorian plumbing company, placed David Coyne and Peter Krejci of BRI Ferrier as volunteer trustees on March 7.
The company’s chief executive, Shannon Egglestone, said they were aware of “the potential ripple effect an event like this could have on our industry.”
“We have undergone a restructuring so that we can continue to support our employees, customers and suppliers,” said Mr Egglestone.
“The restructuring has saved every job for Richstone Group’s 160 employees.”
Mr Egglestone went on to name higher material costs that conflicted with fixed-price contracts as one of the top three factors why the company went out of business.
The company’s restructuring helped it secure a purchase of a related company last month.
Construction costs rose at a record pace in mid-2022 and were almost 5 percent more expensive than the previous quarter.
The rate softened in the next quarter, however, falling to just under 2 percent.
The other two factors Mr Egglestone mentioned were “inefficiencies in the construction industry due to the global pandemic and cuts in credit lines.”