Multiplex set to reveal exposure to Queen’s Wharf

Construction site of the Sydney Fish markets. Picture: John Appleyard

The Brookfield-owned construction giant Multiplex is becoming one of the most heavily scrutinised companies in the real estate market as it is set to release ­accounts on the latest state of its financial position any day.

DataRoom understands that concern is growing about Multiplex’s exposure to the Queen’s Wharf entertainment complex in Brisbane for cash-strapped Star Entertainment and its foreign backers that suffered from cost blowouts, and the Sydney Fish Markets project on which it has faced headwinds.

However, Multiplex, which employs close to 3000 workers, is still faring better than most in what has been a tough market if its 2023 accounts are anything to go by. For that year, Multiplex generated $38.8m of total comprehensive income, compared to $83.2m in 2022, according to accounts lodged with ASIC.

It generated close to $3bn of annual revenue and $70.7m of gross profit.

Accounts show that its total ­assets were $3bn, including $200m in cash, its total liabilities were $1.2bn and its total equity was close to $1.9bn.

Brookfield is understood to hold Multiplex in a special purpose vehicle, and the question is whether the fund’s investors will continue to inject money into the business should it face headwinds.

While suitors had earlier circled the company, long-dated liabilities are now believed to be a deterrent, with suggestions it had lost millions of dollars on some projects.

Brookfield sources said the group did not need an equity injection and did not have any debt.

The situation is unfolding as Brookfield is also wrestling with its cash-strapped hospital operator Healthscope, which it has placed up for sale after sources said the firm’s North American top brass had accepted there was no equity left in the business.

The Australian has reported that Roberts Co last Friday put its Victorian arm into administration through McGrath Nicol, after inheriting the unit from the failed Probuild, and the subcontracting industry was also hit by a series of construction company collapses.

The business is owned by Andrew Roberts, whose father John founded Multiplex. So far the group’s problems are seen as being isolated to Victoria and the contagion has not spread to other parts.

Daniel Grollo’s Victorian construction empire Grocon folded in recent years and Chinese-owned Australian construction firm John Holland reported a $60m loss last year in tough contracting markets in which groups have been caught out from fixed-price projects.

DataRoom reported in August that NSW builder Built was understood to have held talks with Brookfield about acquiring Multiplex, which had been up for sale through Morgan Stanley.

It is understood that a deal never progressed because the two parties could not agree on price. Brookfield had been asking for more than $300m.

Brookfield bought Multiplex at the peak of the market in 2007 for $4.2bn and its desire was always to extract the property component from the business, with the construction arm non-core.

The builder is considered the best in class.

A name change from Brookfield Multiplex back to Multiplex was taken by some as a signal that the private equity firm had been keen to distance itself from the business, as was its move to shift it into an entity that holds its private equity assets.

Multiplex was founded by John Roberts in Perth in 1962 and was listed as a public company in 2003, raising $1.2bn.

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

Construction companies are hard to sell – it’s a low-margin game, risky and the key aspect being acquired is a workforce.

Competitors also take the view that it is in many cases better to take contracts away from their rivals rather than buy the businesses as entire entities.