Up to 84 Gold Coast construction companies are on the brink of collapse: insolvency report

IT’S the shocking statistic that threatens to derail the Gold Coast’s construction boom. An astonishing 84 local construction companies are on the brink after two major builders went bust in the past week.

Many Gold Coast constructions companies are struggling.

EIGHTY-four Gold Coast construction companies are on the brink of collapse, according to new data from insolvency group SV Partners.

The group’s August 2017 Commercial Risk Outlook report found 3.7 per cent of businesses in the industry were at high risk of insolvency.

The report comes in the wake of two major collapses in the space of a week — Queensland One Homes, which is in liquidation owing more than $3 million, and Commonwealth Games Village contractor Ware Building.

Gold Coast builder Queensland One Homes has gone into liquidation. Photo: Supplied

A third company linked to Queensland One Homes, Empire Constructions Pty Ltd, is under investigation for alleged illegal phoenix activity.

SV Partners director Matthew Bookless said Commonwealth Games spending had buoyed construction and infrastructure businesses on the Gold Coast but they would need to find new business soon.

“When one construction company starts to struggle, it can quickly have a roll-on impact very quickly,” he said.

“If one local construction business cannot pay its creditors, it can have significant impacts on other contractors’ cash flows.

“Builders and construction contractors need to ensure that they have enough capital to weather

short-term disruptions to their cash flow and to seek professional advice in the event any downturn in business is likely to exhaust available capital reserves.”

The Queensland Building and Construction Commission said investigations into Queensland One Homes and Empire Constructions Pty Ltd were ongoing.

“The QBCC has referred possible illegal phoenixing activities between Queensland One Homes Pty Ltd and Empire Constructions Pty Ltd to ASIC,” the regulator said in a statement.

“The QBCC’s investigations into Empire Constructions Pty Ltd are continuing.”