Victorian construction company Delco Building Group collapses owing $780k
The pain being experienced by the construction industry isn’t easing up, with another firm going under due to “massive” costs.
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An awarding winning residential building company in Victoria has collapsed owing $780,000 to 50 creditors, with the horror of 2022 – where more than a dozen firms went under – continuing for the industry in the new year.
Delco Building Group – which won a Master Builders Victoria Excellence in Housing Awards for its transformation of a 1887 double-fronted cottage – was placed into liquidation on Wednesday.
Hamish MacKinnon from Dye & Co has been appointed as liquidator and told news.com.au that the construction company had five projects on the go when it collapsed that are “quite significant” and “large houses”.
He revealed that Delco Building Group had $780,000 in outstanding debt with $180,000 owed to the Australian Taxation Office, while the remaining $600,000 was owed to trade suppliers and contractors.
The biggest individual debt was $70,000 owed to a hardware supplier.
The six-year-old company, which was registered in 2017, saw all its employees resign last year due to the difficult trading circumstances, Mr MacKinnon added.
“The cost of materials and subcontractors means the builder can’t complete those projects because they will end up being massive losses and the debts would be through the roof if he continues to get supply,” he said.
“It’s just the building industry. The cost of materials and the cost of labour have all significantly increased and quotes on a project – and these are large projects — means they are not able to complete them.
“He’s been a builder for 30 years. It’s terrible – I was only appointed yesterday but there nothing untowards I can see so far, it’s the current environment we are in.”
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Delco Building Group’s website revealed a number of projects under construction in the Victorian suburbs of Mentone, Ormond, Mordialloc, Mount Eliza and Brighton.
It said it was the preferred builder for leading architectural firms and building designers on its website and was known to build $3 million standalone homes.
It also listed a number of completed projects include renovations and extensions in Clifton Hill, Mordialloc and Albert Park the conversion of a warehouse into townhouses in Brunswick East and new homes being built in suburbs such as South Yarra, Ormond, Brighton and Malvern East.
It was a torrid year for the Australian building industry in 2022 with a spate of collapses across the country.
It emerged in January that two more construction companies in Western Australia went under due to labour shortages and increasing construction costs.
WA Housing Group, founded in 2019 and focused on custom builds and remodelling, was forced into liquidation, while Individual Developments WA (IDWA), which had prior agreements with the Department of Housing and Communities, also collapsed.
Last year, a number of large firms entered into insolvency over the past year including Probuild, Condev Construction, Pivotal Homes, Waterford Homes, Privium, Home Innovation Builders and Norris Construction Group.
It was caused by a perfect storm of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, and extreme weather events.
Originally published as Victorian construction company Delco Building Group collapses owing $780k
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