The collapse of a major plumbing and electrical company puts up to 170 jobs at risk in another sign of the crisis in the construction industry
- The Victorian Plumbfirst Group goes under
- Six companies are involved with up to 170 jobs at risk
A major plumbing and electrical company has collapsed, becoming the latest casualty of Australia’s flagging construction industry.
Plumbfirst Group, a Victoria-based plumbing and electrical company made up of six companies, was placed into voluntary administration on Wednesday, blaming rising material costs for the crisis.
The amount of debt the company has and the number of jobs it is working on are not known at this time, but the jobs of about 170 employees are believed to be currently in limbo.
Alan Walker and Glenn Livingstone of WLP Restructuring have been appointed as voluntary administrators of the company.
It joins Victoria’s largest private plumbing company, Richstone, and Melbourne-based CDC Plumbing and Drainage, both of whom have been volunteering for the past two months.
Plumbfirst Group (pictured), a plumbing and electrical company made up of six companies, was placed into voluntary administration on Wednesday with about 170 jobs at risk
The company consists of six companies: Bblautofirst Pty Ltd, Comfyfirst Pty Ltd, Elecfirst Pty Ltd, Firstaction Group Pty Ltd, Plumbfirst Pty Ltd and Plumbfirst Elecfirst Comfyfirst NSW Pty Ltd.
WLP Restructuring urged one party to buy the group or inject funds into the businesses to keep them running.
“As this process progresses, admins will continue trading with the group without disrupting normal operations at this stage,” WLP Restructuring said in a statement.
‘The decision to appoint administrators was taken by the Group’s directors after rising material costs adversely impacted financial performance,’ said Mr Walker.
While increased material costs have stalled the business, Mr. Walker believes the company’s 170 employees make an attractive sale for potential buyers.
‘The group comprises one of the largest plumbing and electrical contractors in South East Australia with an established workforce and customer base of 170 people.
‘We are confident that a process to sell or recapitalize the group can move forward quickly, with the aim of maximizing returns to creditors and minimizing disruption to employees and customers.
‘We are already working closely with management, employees and other stakeholders to do everything in our power to continue to run the group as usual while we explore viable options to secure its future.’
The first ordinary creditors’ meeting will take place on April 24th.
The Plumbfirst group of companies has cited increased material costs as a key factor in their erratic performance and is the third plumbing contractor in Victoria to go into voluntary administration in the last two months
Plumber Richstone, also based in Victoria, hired David Coyne and Peter Krejci of BRI Ferrier as volunteer administrators on 7 March.
Company director Shannon Egglestone said they are aware of the potential impact an event like this could have on our industry.
“We have undergone a reorganization so we can continue to support our employees, customers and suppliers,” Mr Egglestone said.
‘The restructuring has saved every job for the 160 employees of the Richstone Group.’
Mr Egglestone cited increased material costs, which clashed with fixed-price contracts, as one of three main reasons the company went bankrupt.
The company’s reorganization enabled it to secure a purchase from an affiliate last month.
Construction costs rose to a record high in mid-2022, costing almost 5 percent more than in the previous quarter.
In the next quarter, however, the rate moderated, falling to just under 2 percent.
The other two factors Mr Egglestone pointed to were “inefficiencies in the construction industry due to the global pandemic and cuts in credit lines”.
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