Modure Constructions closes doors, citing impossibly high building costs

The liquidators responsible for winding down a Mackay construction company have given an insight as to what went wrong, calling it a ‘sad case’.

The Modure Constructions team in 2020 (front, from left): Amanda Cox, Jess Croom, Kate Olsen, Rachel Thow and Paula Herden and (back, from left): Kevin Cox, Jake Newman, Jimmy Olsen, Connor McInnes and Alex Woods, at the 100 Club Race Day at the Mackay Turf Club, Ooralea Race Course, Saturday August 28. Picture: Heidi Petith

A Mackay construction company which “tried to do the right thing” by its customers and suppliers was caught out by an escalating ATO debt, the liquidators have claimed.

Modure Constructions (Modure) was run by Kate and Jarrod Olsen, who unfortunately announced its closure earlier this month.
Moira Carter of BRI Ferrier is handling the liquidation, and spoke with this publication on where it all went wrong for the duo.

Like other construction companies suffering, Modure was stuck on contracts offered during Covid at fixed prices, she said.

Jarrod and Kate Olsen, directors of Mackay business Modure Constructions.

As the price of materials skyrocketed in Australia and globally, profit margins disappeared, leaving work needing to be completed at a loss.

“It’s a sad case,” Ms Carter said.

“A company that has tried to do the right thing all the way along, to its suppliers, has unfortunately just been caught.”

Modure owed a $50,000 tax debt to the ATO.

While that’s not a significant sum on its own for a business, the high-interest accrued on ATO debts require a strong cash flow position to be regularly serviced.

Combined with family medical issues, it just got to be “too much”, Ms Carter said.

“Naturally, you take your eye off things, family comes first.”

She noted that no customers were left in the lurch, and the sole contract remaining was dealt with by Modure prior to the liquidators’ appointment.

Kate and Jarrod Olsen announced Modure’s closure via a statement on the company website.

“Over the years, we have been honoured to serve you and contribute to various construction projects in our beautiful Mackay region,” the owners said.

“Unfortunately, the economic landscape, particularly the escalating costs in our industry, has made it increasingly challenging for us to sustain our operations.”

To keep the business profitable, they would have had to have cut corners on quality, which they said they refused to do.

“This environment threatened to compromise our ability to maintain the quality and integrity our clients deserve,” the statement said.

“After careful consideration, we have determined that continuing operations under these circumstances would not align with our commitment to excellence and we have come to the difficult decision to permanently close our toolbox.

“We want to express our deepest gratitude to our loyal customers and partners who have supported us throughout the years. Your trust in our services has been invaluable, and we appreciate the relationships that have grown out of creating forever homes.”

Modure Constructions operations manager and director, Kate Olsen. Picture: Jim Cullen

Modure Constructions secured a $1650 grant in 2019 to help expand its business.

The company was placed in external administration on February 20, according to ASIC records, when it appointed James Taplin and Moira Carter as liquidators.

Speaking on broader issues with the construction industry, Russ Stephens, co-founder of The Association of Professional Builders said when businesses go under, “it’s a bit like an iceberg”.

“You know the bit you can see at the top, it’s nothing like the mess underneath,” he said

“This is what we see when building companies go into liquidation. You know, there might be some people chasing unpaid bills of like tens of thousands of dollars, but when they get placed into administration, the hole is millions of dollars. And it’s all because they’re cashflow positive.”

Originally published as Modure Constructions closes doors, citing impossibly high building costs