179 NSW firms collapse in June as lockdown starts to bite

Pubs and tourism operators among 179 corporate failures in NSW over the past month as the latest lockdown starts to take a toll. See the list of June insolvencies.

At least 179 businesses entered insolvency and administration in NSW in June as the state slipped into the first weeks of a lockdown.

The preliminary figures from the Australian Securities and Investments Commission list reveals a bevy of NSW incorporated business losses including noted tourism player Tourism Adventure Group, which operated the Nomad and Base Hotels, as well as several pubs.

The latest figure comes after 171 NSW incorporated businesses closed in May.

KPMG Asia Pacific Head of Restructuring Peter Gothard said he was perplexed by the continued low number of business insolvencies despite the end of many supplement payments.

“It’s a similar experience in Asia and Europe, the number of insolvencies is well down,” he said.

“The reason for that is the government stimulus in all its forms has been very effective in protecting business.”

Second is you’ve got very low interest rates which we‘ve had for some time and will have for some time. It makes it a lot easier to service debts”

The Tourism Adventure Group, which ran 25 venues and turned over $150m pre-pandemic, has been slammed by continued international border closures and the end of the Jobkeeper supplement.

The business will continue to trade as it works its way through administration, however it’s New Zealand operations are not affected.

During June NSW also lost a series of businesses linked to the pub scene, with Kariong Tavern shutting its doors.

The business behind the Walsh Hotel group was also wound up, after its previous operator passed away and the group split up and sold.

The business held by the old owner of the Old Fitzroy Hotel in Woolloomooloo was also wound up after the pub was sold to upcoming pub player James Thorpe.

Mr Thorpe, who now owns and operates The Duke of Enmore, The Old Fitzroy, The Oxford Tavern, said he was now faced with a much larger pub group just as the state enters a new lockdown.

Closed business and quiet streets in the CBD during Sydney’s latest lockdown. Picture: NCA NewsWire / Gaye Gerard

“It has been really turbulent in terms of ownership, there’s been a lot of people going into liquidation and transfers of ownership in the pub business,” he said.

“For us it’s what we made of it, we were really successful during the first lockdown, we traded quite well, The Duke and the Old Fitzroy were two we picked up during Covid.”

Creditorwatch CEO Patrick Coghlan said he expected most businesses to survive the next two to three weeks of lockdown despite the end of pandemic protections.

“Covid has forced business owners to be a lot more efficient. Overall it’s been a really big seismic shift for businesses, they know how to operate in this uncertain future,” he said.

Mr Coghland said he didn’t expect to see a growth in business failure numbers until banks and the Australian Taxation Office started taking concerted action.

“The fact is we’re still operating in this synthetic environment where there’s all this additional liquidity in the market and everyone is very much team Australia,” he said.

“The ATO and the banks, they are responsible for a large percentage of court actions which lead to wind ups and administrations.”

“Until we start to see the banks and ATO head back to their normal collection rhythms we’re going to be at these reduced figures.”