Security firm collapses as pandemic hits events

A Brisbane security company that provided crowd control at music festivals has gone under owing about $1m after the pandemic caused the cancellation of major events.

Pandemic hits security sector. Picture: iStock

A Brisbane security company offering bodyguard protection and crowd control has gone under owing about $1m after pandemic lockdowns reduced the need for its services.

Professional Caliber Security, founded in 2012 by former lawyer Nick Ioannou, employed more than 150 staff during its peak providing security for iconic events including Stereosonic and Soundwave.

It also had worked with blue-chip clients included LendLease, CBRE and Hutchinson Builders. Morton & Lee Insolvency principal Gavin Morton said the firm’s turnover had taken a significant hit during the pandemic. “Ongoing lockdowns significantly reduced the need for security services across the board,” says Morton. “The company had good clients but it found they were reluctant to enter into forward contracts.”

Pandemic hits security sector. Picture: iStock

He says the company’s pipeline for new clients also had dried up in recent months. “Investors and shareholders were reluctant to tip more funds in for working capital when there was no certainty there would not be more lockdowns such as the one we are currently under,” he said.

Creditors include the Australian Taxation Office and some public liability claims. All employees have had their entitlements paid.

TROUBLE BUILDING

Veteran Brisbane developer Kevin Seymour has warned there is further trouble brewing for the building sector as Covid-19 continues to bite.

Seymour tells your diarist that supply chains have been stretched because of the pandemic with shortages of building materials causing delays and cost blowouts.

“The property sector is going gangbusters but there will be real problems for builders in the next couple of years,” says Seymour. “It takes time to build new supply chains.”

Seymour, whose Seymour Group has shaped Brisbane’s central business district through iconic developments including Queen’s Plaza and Post Office Square, says he feels for the small businesses caught up in the latest lockdown with many fighting to survive.

Prominent developer Kevin Seymour. Pic Jamie Hanson

Seymour adds that it has not all been bad news on the economic front with huge spending on white goods and electronics as people invested in their homes rather than on international holidays. But he says there will come a time when we have to get back to a more normal lifestyle and that will include international travel.

Seymour is not the first person to warn of impending problems for the building sector.

Master Builders Queensland warned back in April that the HomeBuilder construction boom has created a “ticking time bomb” as surging costs of material and labour cuts profit margins in the building sector.

Master Builders Queensland deputy chief executive Paul Bidwell says the surge in new home projects sparked by HomeBuilder grants could send more builders to the wall as the price of everything from timber and pipes to plumbers and roofing contractors increases.

The average cost of a $300,000 new home in south-east Queensland could increase by up to $30,000, which in many cases could not be passed onto customers by builders. Materials make up about 60 per cent of a building’s costs with labour making up the rest.

“For some builders it is going to be a profitless boom because even though there is a lot of work out there, the margins are getting thinner,” Bidwell says. “While we can live with a profitless boom, what we don’t want is for builders to fall over. Builders are just going to have suck it up as there is no capacity to pass costs on.”