Pierce Engineering debt goes back in the millions

Long standing company speaks out about their reasons behind their voluntary administration

There were just a handful of cars at JM Kelly's headquarters in North Rockhampton on Monday.

UPDATE THURSDAY 6AM: THE MORNING Bulletin understands Pierce Engineering owes at least $2.475m to creditors following the announcement of their voluntary administration yesterday.

A report submitted to Australian Securities and Investment Commission (ASIC) details the money owed to creditors, of which $800,000 is owed to the Australian Tax Office (ATO) and the remaining towards financers and equipment including ANZ.

There is also $1.118m owed to the company.

The company has a registered $1.635m in assets.

No wages are owed to staff and the administrators, Worrells Solvency and Forensic Accountants in Rockhampton have confirmed the staff would continue to be employed and paid as normal.

A decision about the future of Pierce Engineering is expected to be made in the next month.

UPDATE WEDNESDAY 11.30AM: A LETTER of demand for $430,000 from the liquidators of the JM Kelly group of companies has forced Rockhampton company, Pierce Engineering, to be placed into voluntary administration.

The 52-year-old business announced the news through a statement exclusively revealed to The Morning Bulletin from administrators, Worrells Solvency and Forensic Accountants.

"The directors of Pierce Engineering placed the company into voluntary administration after suffering a financial hit from the failure of the JMK group of companies and subsequently receiving a letter of demand-for approximately $430,000-from the liquidator of the JMK group of companies," the statement read.

"The Central Queensland region as a whole has been struggling for some time and Pierce Engineering is just one of many businesses that have been impacted by the collapse of the JMK group of companies and other events in the region."

Worrells Solvency and Forensic Accountants in Rockhampton was appointed the administrators on February 27.

Worrells has confirmed the business will be trading as usual while an assessment of the company's financial viability is undertaken.

The employment of all staff is contining and their entitlements will be paid.

"At this stage of the administration, we're optimistic that a proposal will be put forward that will see control of the company revert back to the directors in approximately a month's time with the business continuing to trade and employ staff in the Rockhampton area," Worrells Rockhampton partner Michael Beck said.

"We understand the impact that the appointment has on affected parties and the community.

"We will continue to proactively communicate at each juncture of the administration."

INITIAL WEDNESDAY 10.30AM: JM Kelly's liquidation has played a major hand in the downfall of another company after long-standing Rockhampton business Pierce Engineering advised it had gone into administration.

An administrator was appointed to the Kawana company on February 27.

The Morning Bulletin understands the company is suffering effects of JM Kelly's demise in 2018.

JM Kelly had been one of their long term contractors over the years.

JM Kelly's filed for liquidation in October 2018 with nearly $15 million estimated to be owing to unsecured creditors.

It is understood Pierce Engineering were owed money from JM Kelly and that company's liquidation created a snowball effect for the 52-year-old Rockhampton business.

Morgan Lane of Worrells Solvency and Forensic Accountants in Rockhampton have been appointed the administrators.

Administration generally allows a company an eight-week period to rescue a business, repay creditors and save it from liquidation.

The administration has been voluntary as it was filed by the company, Pierce Engineering, themselves.

The first meeting of creditors will be held at the Empire Hotel in Rockhampton on March 10, at 2.30pm.

Creditors wishing to attend are advised proofs and proxies are to be submitted to the administrator by 5pm on March 9.

A second meeting is planned for April 2.

Pierce Engineering was founded by Noel Pierce in 1968, with his sons Mark and Wayne later taking over.

Services include sandblasting and painting, plasma cutting, turning and milling services, fabrication, steel erection, welding, repairs and maintenance.

Member for Keppel Brittany Lauga, Mark Pierce, Member for Rockhampton Barry O'Rourke, Wayne Pierce and Minister for Corrective Services Mark Ryan.

Pierce Engineering were awarded a subcontract for part of the works for the $240m expansion Capricornia Correctional Centre.

They were supplying and installing the structural steel for 14 new buildings, including eight residential blocks, two secure blocks, two industry workshop buildings, two officer stations and walkways to link them together.

12 staff were allocated to the prison work and they were looking to put on more.

Pierce Engineering has about 40 staff.

Due to the prison workload, they were looking to put more staff on.

They also hoped to receive further works from Rockhampton's $31 million art gallery and $1 billion upgrade of the Shoalwater Bay Military Training Area.

Their major projects over the years include lights for the Fitzroy Riverbank development, helicopter rescue hanger, last two stages of the Rockhampton Hospital redevelopment, structural steel for Kershaw Gardens, Parkhurst Shopping Centre, Gracemere Saleyards (CQLX) covered selling area and horse stadium, stage cover for the Yeppoon foreshore, redevelopment of Northside Plaza, redevelopment of Rockhampton Airport Terminal, CQU gynamism, state and private school buildings from Townsville to Longreach to Gympie, Salt Apartments, Empire Apartments and Mackay Entertainment Centre.

The business is located at 48 Quinn St, Kawana, where it has been since 1969.

This 1400sqm site has expanded twice due to increased workloads and over time they have purchased three more blocks of lands adjacent to the workshop.