Condev calls emergency meeting as Covid-19, floods hit building giant

Construction giant Condev says the Probuild collapse has put some suppliers and subcontractors in financial distress as it gears up to meet developers in an emergency meeting.

Queensland construction giant Condev says the Probuild collapse has put some suppliers and subcontractors in financial distress.

Condev is holding a meeting on Monday with developers to work out a plan for its own future. Condev said it had also been hit by a perfect storm of labour shortages due to Covid-19, price hikes and flood damage.

“We have prepared financial projections in order to understand our current and future cashflow, and on the basis of those projections have sought legal advice,” the company said in an email to staff and clients, seen by the Courier-Mail.

“We cannot do this alone and we need the support of all stakeholders.”

Condev director Tracy Marais said over the weekend that all sub-contractors had been paid to date and she was confident the Gold Coast-based builder could survive with the support of clients, staff and subbies.

It currently has 14 projects in southeast Queensland.

She said the meeting on Monday was to develop a plan to move forward.

Condev, which last year reported a loss, told staff and clients that recent flooding had impacted its ability to complete projects and was “the straw that broke the camel’s back”.

“We have prepared financial projections in order to understand our current and future cashflow, and on the basis of those projections have sought legal advice,” the company said in an email seen by The Courier-Mail.

“We cannot do this alone and we need the support of all stakeholders.”

Condev director Tracy Marais is confident the company can survive the turmoil in the building industry. Picture Glenn Hampson

In the email, Condev said the full impact of the Omicron variant of Covid-19 was felt throughout the construction industry, following a sharp immediate reduction in available staff, significantly further impacting already Covid-19 challenged delivery and completion dates.

“On some sites we were down to 10 per cent,” the email said.

“In late-February 2022, ProBuild went into external administration which significantly impacted suppliers and subcontractors and their ability to continue to provide services to the industry. Some suppliers and subcontractors are now in financial distress and we have been required to source alternate suppliers and subcontractors at an increased cost which contractually cannot be passed on.”

Condev projects include the Natura high rise at Burleigh and an Aria Property Group’s 124-apartment project at Kangaroo Point.

According to the company‘s latest financial report lodged with ASIC, Condev made a loss of $358,772 in 2021 compared to a profit of $536, 332 the previous year.

Revenue climbed from $175m to $181m over the period with the company noting it continued to procure work from national developers despite the impact of Covid-19.

The company, which has picked up a swag of industry awards, is experienced in multi-unit residential constructions, retail and commercial, industrial units and warehouses, educational, child care and aged care facilities, employs 125 people.

Condev founder Steve Marais was included in the 2018 Gold Coast Bulletin Power 100. The South African-born builder’s company has behind some of the city’s biggest projects, including work on key Commonwealth Games infrastructure.

Condev’s woes come after liquidators were appointed on March 3 to Hitec Glazing, a Queensland firm working on Probuild’s 443 Queen St project.

Liquidators Anthony Connelly, Jamie Harris and Mark Holland of McGrathNicol estimate the 14-year-old Hitec firm has debts of $3.25m.

Hitec had provided windows to the troubled Queen St project as well as working on a range of other major high-rise developments around the country.

Artist impression of Natura tower in Burleigh Heads.

Mr Connelly on Friday said Hitec has ceased operations and the liquidators are currently assessing the most appropriate way to preserve value for stakeholders.

Hitec employed approximately 137 personnel at the time the McGrathNicol were appointed.

Mr Connelly said the liquidators will investigate the cause of the company’s failure and while it was too early to speculate, he noted Hitec was a subcontractor to the Probuild Group on the 443 Queen St site.

“The liquidators estimate that Hitec has approximately $3.25 million owed to trade creditors, however this value may change as claims are received,” Connelly says. “There may also be claims associated with the early termination of contracts.”

Expressions of interest are sought for all or any part of Hitec’s business or assets and are requested by 4pm on March 16.

Hitec’s directors Kevin and Derryn Wright had more than 60 years combined experience in the window and door industry. They were unavailable for comment.

Cbus Property is understood to be bringing in new builders to complete the 443 Queen St project after the collapse of Probuild.

Deloitte were appointed administrators to national building firm Probuild late last month.

NSW construction firm Roberts Co has agreed in principle to buy Probuild’s operations in Victoria and work has restarted on some of the projects in Melbourne.

It is understood developer Cbus Property is preparing to bring in new builders for the 443 Queen St project, which is about 80 per cent complete but two years behind schedule.

Deloitte said earlier this month that the Probuild group, owned by South African firm Wilson Bayly Holmes-Ovcon (WBHO) owed its 786 workers across 19 projects $14m and untold amounts to more than 2300 creditors.

Originally published as Condev calls emergency meeting as Covid-19, floods hit building giant