Watchdog QBCC suspends Simonds Group’s Queensland licence

The Queensland operations of a national homebuilder has had its licence reinstated by the building watchdog after it restructured its financial arrangements.

THE Queensland operations of national homebuilder Simonds Group has had its licence reinstated by the building watchdog.

Melbourne-based Simonds Group told the ASX on Friday that it had received notification of the suspension by the Queensland Building and Construction Commission (QBCC). The licence related to its wholly owned subsidiary Simonds Queensland Constructions.

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The QBCC licence of Simonds Queensland Constructions was suspended after it failed to show it had enough assets to support its revenue of more than $350 million.

On Monday QBCC said it had received new financial information provided by Simonds Queensland Constructions as a result of its licence suspension.

“The licence suspension has now been lifted following the steps taken by Simonds Queensland Construction post the suspension,” QBCC said.

“The company has restructured and reported to the QBCC as a stand-alone entity, rather than as a consolidated group. It has also paid off some liabilities and settled a number of related entity loans.

QBCC said the net result has seen the stand-alone entity’s net tangible assets increase by around $3.5 million, giving it an acceptable asset base to support its current turnover.

“It’s pleasing to see the company is now meeting the QBCC’s minimum financial requirements and that it can continue trading under an active licence,” QBCC said.

Simonds on Friday said the suspension was due to a “technical licensing breach”.

The QBCC is cracking down on major construction companies in Queensland.

Queensland represents less than 10 per cent of the group’s annual turnover of $605 million. No other regions are impacted.

In April, the QBCC said more than 100 construction companies had failed to lodge proof of their financial health with the watchdog and faced being banned from taking on new work.

It issued show-cause notices to 18 companies which were failing to meet their financial requirements, with Simonds and two other companies (pest control giant Flick Anticlimex and Christopher Contracting from the Gold Coast) failing to satisfactorily respond to the notices.

QBCC Commissioner Brett Bassett said the regulator would not tolerate building licensees breaching financial safeguards.

“While we haven’t received any monies-owed complaints about any of the companies, operating under these high-risk conditions is trouble waiting to happen,” Mr Bassett said.

“Swift regulatory action will be taken when these high-risk situations are identified.”

Anticimex Group Pacific region president Guido Toepfer said the suspension only affected Flick’s building-related work in Queensland.

“The QBCC has advised that this issue is in regards to the way they have treated the financial information for our parent company, Anticimex Pty Ltd,” said Mr Toepfer. “This seems to be a technical issue and we are working with the QBCC to resolve it as soon as possible.”

The QBCC suspended the licence of Laing O’Rourke’s Australian arm in March after becoming concerned about its financial viability.

The suspension meant Laing O’Rourke was banned from doing any building work in the state. The license was later reinstated after Laing O’Rourke injected $32 million into its local operation.

Originally published as Watchdog QBCC suspends Simonds Group’s Queensland licence