Job cuts on the way at Multiplex as work wanes

Multiplex’s workbook in 2024 was about quarter of the level it was in 2023. Picture: David Clark

Private equity firm Brookfield could be moving to cut jobs, including those from the top executive ranks at builder Multiplex, after accounts revealed its workbook has substantially lessened.

Industry sources say that already there have been some quiet departures at the company that employs about 3000 staff, but more could be looming.

For 2024, the Multiplex workbook was at $10.3m – about quarter of the level it was in 2023 at $38.1m and a far cry from the $7.5bn it was once at in its prime.

The move comes after major cost blowouts on Brisbane’s Queen’s Wharf project for Star Entertainment and its co-owners, with provisions of $149m sinking it to a $122.4m loss despite $4bn of annual revenue.

Sources say that the accounts show all the signs of the company becoming more conservative with respect to its selection of building projects, targeting profitable jobs and not taking on more work until construction for other clients is first finished.

However, weighing in Multiplex’s favour is that in what have been tough market conditions since the 2020 global pandemic when product and staff costs soared, a number of its competitors have collapsed or retreated in the market.

This places the company in a stronger position to bid competitively on future contracts.

Accounts for Multiplex lodged with ASIC show that over the years private equity firm Brookfield has extracted billions of dollars out of the business to return back to the global parent.

However, in the past year, it appears that the private equity firm has invested fresh equity into the business.

For 2023 it had a loan out to Multiplex Global of $1.55bn and that amount is now $1.398bn, suggesting that Brookfield has topped up the business by about $152m to pay for the losses.

Yet the amount of funds being withdrawn suggests that Multiplex has been lucrative for its private equity owner, which some take as a signal it will continue to be supportive of the company.

And it may need further support in the short term, as sources say that cost blowouts for work on the Fish Markets in Sydney may also be a looming headache for the best-in-class builder.

Multiplex, an international construction business, was founded in Perth in 1962 and was listed as a public company in 2003, raising $1.2bn.

It was purchased by Brookfield in a $4.2bn buyout during 2007.

It specialises in high-rise buildings, stadiums, high-end residential projects and mixed-use, education, health and civil infrastructure developments.

No Tabcorp sale if gaming services

Elsewhere, at the Macquarie Australia Conference in Sydney on Tuesday, Tabcorp boss Gillon McLachlan ruled out a sale of its $610m gaming services operation after some analysts had questioned whether that would be on the agenda when he stepped into the role.

Mr McLachlan said he liked the business and Tabcorp was not under balance sheet pressure despite the $1.4bn group’s net debt at $753m last year.

He was also asked about Tabcorp’s interest in mergers and acquisitions and he responded by saying that the company was in order, as was the cost structure.

“At some point I think there will be further consolidation. When that happens, I don’t know,” he said.

His comments come as listed online sports betting company PointsBet remains in play after suitor BetR, backed by Matthew Tripp, recently bought a 19.9 per cent blocking stake.

Japanese entertainment giant Mixi is also bidding.

It’s been speculated that Tabcorp may be keen to buy PointsBet or Bluebet (now part of BetR) in the future.

One theory is that once BetR and PointsBet become one company, Tabcorp buys the lot.