St Hilliers taps administrators amid building pain
The building industry has been dealt another blow as one of the country’s biggest property and investment companies appoints voluntary administrators.
Construction giant St Hilliers has stopped work on more than 20 projects around the country after appointing voluntary administrators in the latest blow to the troubled building sector.
The Sydney-based $164m group appointed Glenn Livingstone and Allan Walker, of WLP Restructuring, over the weekend after amassing losses of $12m over the last two years. The administration includes St Hilliers Contracting and six other entities in the group. The property development and investment division St Hilliers Property remains unaffected.
St Hilliers joins the more than three construction-related companies collapsing every day since the start of the year as rising costs and labour shortages continue to bite.
WLP Restructuring said it had secured and paused all works across St Hilliers’ 21 active construction sites while it undertook an urgent assessment of its financial position and operations. “As this assessment is completed, approximately 80 staff members will remain employed while 22 have unfortunately been made redundant.” It is the second time Hilliers has entered voluntary administration over the past 13 years.
Mr Livingstone said the administrators are working closely with all stakeholders and staff in order to recommence project works at the earliest opportunity. “We are hopeful this can occur in the coming days and that the employment of as many people as possible is preserved,” said Mr Livingstone said. The first meeting of creditors will be held before February 14.
St Hilliers told subcontractors over the weekend that there would be no work at one of its key projects, the Bernborough retirement village in the inner northern suburb of Brisbane.
“St Hilliers has today gone into voluntary administration,” a text message to subcontractors said. “What I can advise you is we will allow persons to collect their tools under escort by St Hilliers, and materials fixed / unfixed cannot leave the site. The St Hilliers site gate will remain locked. Tomorrow, the subcontractor business owner will be contacted for steps moving forward by the appointed administrator.”
“If you wish to redeploy your staff to alternative job sites that is certainly fine and the point of this message to you so you have that opportunity. I can discuss what I know with you tonight if you wish to call.” The company, which reported revenue of $164m in 2023, claims to have delivered projects worth $4.5bn over the past 35 years.
The company was founded in 1989 by industry veteran Tim Casey, who served as vice president of the NSW Property Council from 2009 until 2011.
The group made a loss of $8.9m last financial year and a deficit of $3.1m the previous year, according to financial reports lodged with ASIC.
Latest figures show that for the first two weeks of 2024, 48 construction-related companies collapsed, with 25 of them based in NSW.
That represents almost a quarter of the total 193 company failures across all industries in the two weeks to January 14, according to ASIC data published last week.
For the financial year to January 14, 1869 construction-related companies collapsed, up 37 per cent from 1367 for the same period a year earlier.
Construction failures represented 27 per cent of the total 6884 company failures across all industries in the period from July 1, 2023 to Jan 14, 2024.
St Hilliers’ other projects around the country include Thornton Central in North Penrith, NSW, and 711 Hunter Street in Newcastle West.
It also has several contracts with the Department of Defence including the Greenbank Training Area in Queensland and sewage treatment works at RAAF Amberley.
St Hilliers is licenced by the Queensland Building and Construction Commission to undertake work valued at up to $240m.
The $360bn building sector is bracing for another horror year with insolvencies predicted to spike in 2024 as the lagging impact of Covid-19 continues to bite.
Revive Financial head of business restructuring Jarvis Archer said the construction sector was set to experience high levels of insolvency for at least the first half of this year with undercapitalisation, lack of cashflow and poor economic conditions the main factors.
Association of Professional Builders chief executive Russ Stephens predicted “a lot more closures” in the sector next year as builders were caught out with contracts signed during the Covid-19 boom that did not account for inflation and supply chain challenges.
The building boom brought about by the Covid-19 stimulus measures exacerbated shortages, while dwelling completion times blew out in many parts of the country.
“The problem is not going away,” Mr Stephens said. “Equity has been eroded and the tide will go out to reveal the mess.”
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