Australian construction contractor FSA Services Group collapses owing $10.6m

More than a hundred employees have been impacted with the 27-year-old company hit by the crisis in the construction industry.

An Australian company involved in the construction sector has collapsed owing $10.6 million and impacting more than a hundred jobs.

The 27-year-old company called Fire Services Australia (FSA) Group, worked across multiple construction projects offering services such as electrical and mechanical installations and fire protection, and had offices in NSW, Queensland, Western Australia and the ACT.

Its demise has left 123 staff across Australia without jobs, including a number of tradies, after it went into voluntary administration last Wednesday with Joshua Taylor from NSW-based firm Taylor’s Insolvency appointed as administrator.

Mr Taylor said there were 264 creditors identified so far who are owed $10.6 million, which included employees, the Australian Taxation Office, other contractors and suppliers, who made up a “big” part of the claims.

He said predominantly 60 per cent of the group’s revenue came from QLD, with the business impacted by the floods earlier this year.

“Generally speaking it was Covid and the floods that hit them really hard because they can’t work when its raining and when its flooded,” he told news.com.au.

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A screenshot showing the FSA services. Picture: FSA website

The shareholders of FSA did go through “cost savings” and tried to keep the business operating by injecting more cash, Mr Taylor said.

“The profitless boom is pretty accurate. They were winning a lot of clients but weren’t making a lot of money out of their contracts and costs of deliverables were higher than what was coming in,” he added.

“And we are seeing that throughout a lot of other companies. Insolvency is finally starting to wake up again after having a very sleepy last few years, it started turning about four months ago.”

Mr Taylor said he was looking for a buyer to take on the company.

Employees react to the collapse

A number of staff members shared the “sad” news of the company’s collapse on LinkedIn.

“A sad day for all at FSA. Last Wednesday was a day not too many saw coming,” wrote a QLD projects supervisor who had been with the company for a year.

“FSA doors closed for business. Off all the companies I have worked for this one really felt like home. From the people on the ground to the office staff everyone had time for one another.”

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Employees including electricians spoke about the “sad” end to the company. Picture: iStock

Another spoke about the “risk” he had taken to take up a role with the company just over 18 months ago.

“Having taken the risk, moved to another state and undertaken the next step in my career, experiencing a lot, learnt plenty, found a great bunch of people to join the team, it has come to a rather abrupt end,” wrote one man who worked as a state manager in the NSW office.

“Never in my wildest dreams would I thought I would go through this process, however, what it highlights is what this industry can do for others.

“The outreaching of many with their thoughts of concerns coupled with how fast offers of employment went out to my technicians … helping relieve many of my concerns.”

An electrician, who had started with the company just 11 months ago, wrote that being made redundant was something he never imagined experiencing in his career and the business “closing its doors” was a “sad day”.

The company website said it worked across a number of key sectors including health and aged care, education, entertainment, government, defence and justice and financial institutions.

Its latest news said it was recruiting for new positions but the post was undated. Picture: FSA website

It offered a number of services included installing, repairing and maintaining electrical systems, heating, ventilation and airconditioning, safety audits, and a 24 hour breakdown service.

Its website added that the FSA was established in 1995 and had serviced over 4586 sites daily across Australia with 677 individual clients.

Construction industry crisis

FSA’s demise comes as the construction industry in general has been plagued by a spate of collapses this year.

The latest to go under was Geelong-based builder Waterford Homes last week, which had 10 homeowners with current builds at various stages of completion and 60 creditors owed at least $600,000.

Two major Australian construction companies including Gold Coast-based Condev and industry giant Probuild have already gone into liquidation this year.

Smaller operators like Hotondo Homes Hobart and Perth firms Home Innovation Builders and New Sensation Homes, as well as Sydney-based firm Next have also collapsed, leaving homeowners out of pocket and with unfinished houses.

At the end of last month, two firms from Queensland collapsed just days apart, Pivotal Homes and Solido Builders.

Condev building sites on the Gold Coast. Picture: Nigel Hallett

An industry insider told news.com.au earlier this year that half of Australia’s building companies are on the brink of collapse as they trade insolvent, and it could see thousands of people’s homes impacted in the coming months.

One includes a Victorian construction company that might be about to collapse after it racked up millions in debt and building works have stalled for months.

Snowdon Developments Pty Ltd has 15 creditors chasing it for debts totalling $2.5 million who are demanding the Supreme Court of Victoria impose a winding up order to force the company to go into liquidation “on the grounds of insolvency”.

There are between 10,000 to 12,000 residential building companies in Australia undertaking new homes or large renovation projects, a figure estimated by APB.