Metricon: Wave of support for home builder after founder’s death, rumours

Acting CEO Peter Langfelder says it’s business as usual at Metricon, and its suppliers have come out strongly backing its prospects.

The construction industry is under pressure from rising input costs and supply chain disruptions.

After a traumatic week in which Australia’s largest home builder, Metricon, was left emotionally reeling in the wake of the shock death of founder Mario Biasin, and it sought to dispel rumours of financial problems, the situation which many home builders are facing was made clear.

The industry is under unrelenting pressure from an almost perfect storm of rising input costs and supply chain disruptions at a time when some builders have been left overwhelmed by the fire lit under the market by first homebuyer packages designed to keep the economy ticking over during the depths of the pandemic.

Now, as residential property markets face the prospect of a potentially sharp pricing decline, home builders are also dealing with delays from the new waves of coronavirus cases and heavy rains, which have caused delays.

The private Metricon admitted it was facing the same issues as any builder as the company and a vast array of sporting connections went into mourning for Mr Biasin.

But acting CEO Peter Langfelder told a press pack that Metricon would not only go on but it was meeting all its obligations, and its suppliers have come out strongly backing its prospects.

He insists that it is business as “business as usual” while conceding that some sites had experienced delays.

The private Metricon has projects stretching along the eastern seaboard, and the implications of it becoming the latest casualty in the wake of Probuild and Condev collapses would be dire.

But backers note that it has held constructive talks with both the Andrews government and the federal government, and it is taking a similar line with its senior lender the Commonwealth Bank.

“The reality is, we’re strong. We’re paying everybody on time. Nobody’s been behind in any payments,” Mr Langfelder said. ”Our business has been very strong, and customers do need to be patient with all builders. The industry is going through a pretty tough time, as many industries are. So I’m not skirting around that.”

While forecasters are trimming their outlooks for the housing market, Mr Langfelder said there were cycles in the marketplace, but the company was “in a strong position to continue as we have the last 45 years”.

The ramifications of even a hiccup in such a large builder would spread well beyond the 4000 homes that it is building. But the confidence of its subcontractors – who are backing the builder – is a positive sign even as some customers are nervous.

A senior residential developer backed Metricon’s account saying that raw material costs had increased and a lot of the government stimulus which went into the market globally had driven up demand at the same time as Covid issues were hitting production.

“It’s been sort of the perfect storm every which way and it’s just ultimately put pressure on costs and builders locking in pricing, and then cost escalation significantly increasing,” he said.

Many developers use Metricon as builder for their house and land packages and it can also do townhouses. Any issues at Metricon could leave customers in difficulty looking for new builders to finish off their properties. But buyers on social media are sticking with the company, often citing its good delivery.

“Metricon is a very well respected quality builder. so there‘s significant substance there. So if there’s some cashflow issues, let’s hope they can weather the storm and get through it,” the developer said.

Metricon, meanwhile, says it is paying all creditors and not cancelling contracts. And its subbies and suppliers have come out in support, launching a national advertising campaign to back it.

Civic Screens chief executive Stefan Styles said Metricon had never missed a payment and warned speculation about its financial position could become a self-fulfilling prophecy.

“They have never done anything wrong,” said Mr Styles, whose factory is based on the Gold Coast. “They always try and help you if there is a problem and that is rare.”

Mr Styles is joining other Metricon subbies and suppliers including Reece, Carpetcall, Dulux and Laminex placing advertisements in support of the Melbourne-based company.

An email sent to subbies from one supplier Friday states: “We are all key suppliers of Metricon, and right now they need our help to change the public sentiment around their position. I am proud to be part of a supplier led-campaign for Metricon in Melbourne and are looking to roll this out nationally. This campaign includes print advertisements this weekend and will require a financial commitment.”

Yatala-based Civic supplies shower screens, splashbacks and cupboards for about 1000 Metricon homes in Queensland each year, making it one of its biggest suppliers.

“We don’t believe the company is in trouble,” said Mr Styles. “The problem is that customers will become nervous and it will become a self-fulfilling prophecy.”

However, Metricon believes it can come through the toughest week in its 45-year history.