Sunshine Coast-based Scooter Group and related businesses have gone into voluntary administration

Cost blowouts and Covid has put a Queensland construction services group into voluntary administration but there is hope parts of the business can be salvaged and jobs saved.

Cost blowouts and the Covid-19 pandemic have been blamed for Scooter Group to be in voluntary administration.

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More than 120 jobs could be on the line after a Sunshine Coast business owner put his eight construction services companies in voluntary administration in a bid to reorganise his core kitchen cabinetry business after sustaining an almost $7m loss.

Hit by cost blowouts and the Covid-19 pandemic, the companies are part of the Scooter Group, run by sole director Scott Dwan. Mr Dwan was not available for comment.

The businesses in voluntary administration include Ultimate Spray Pty Ltd; Octeros Cabinets (QLD) Pty Ltd formerly ABC Manufacturing Pty Ltd, and Octeros Cabinets (VIC).

According to the Scooter Group’s financial statements submitted to the Australian Securities and Investments Commission it registered a loss of $6.783m in 2020-21 and $5.232m in 2019-20. The same report to the financial regulator revealed the group in 2020-21 has total equity of $11.875m.

Scooter Group revenue had climbed from $84m in 2019-20 to $144m in 2020-21.

The cabinet manufacturing business has more than 100 employees.

Mr Dwan’s cabinet manufacturing business has more than 100 employees while Ultimate Spray has around 20 staff and administrator Christopher Baskerville of Jirsch Sutherland will continue to trade those two core businesses.

Mr Baskerville said the case was a prime example of the benefits of voluntary administration.

“It gives the director the time and breathing space to work with us on the best-outcome scenario, and it preserves the value of the business while enabling us to trade the two core businesses,” he said.

“Our immediate focus is on undertaking an urgent financial assessment of the businesses, continuing to trade the manufacturing and painting businesses, and working closely with Mr

Dwan to develop a viable plan for the future.”

The businesses that were once vertically integrated into the construction space and at one stage included plastering, kitchen cabinetry manufacturing and logistics.

In 2020 Octeros Cabinets signed a lease for a 10,300sq m office/warehouse in Brisbane’s TradeCoast of Pinkenba, paying more than $1.2m a year.

The business is now trading out of a smaller facility in Warana on the Sunshine Coast.