Managing director Gavin Murphy: despite $120 million worth of projects in the field and a further $90 million ready to start, secure investment could not be found. Photo: Project Coordination.
The company behind Wollongong’s North Beach Surf Life Saving Club refurbishment has gone into administration, leaving about 200 creditors owed more than $20 million
The father-and-son directors of Project Coordination, chairman Paul Murphy and managing director Gavin Murphy, described the “agonising” decision to enter voluntary administration as “soul-destroying”.
The company opened its Wollongong office in 2000. In a statement, the directors said they had delivered the bad news to meetings at its Canberra and Wollongong offices on Tuesday (19 March).
They said they had called in RSM Australia Partners as voluntary administrators after failing to find the capital needed to keep going despite ongoing projects and a solid pipeline of work.
The decision leaves 14 projects in limbo (10 in the ACT and four in NSW) and 67 staff (38 in the ACT and 29 in NSW) without jobs, although RSM said they would receive most of their employee entitlements immediately. The balance of any entitlements will rank as a priority debt of the company.
In a statement, the directors said the decision, coming in the company’s 50th year of business, was soul-destroying.
“We recognise this single decision affects many, including our subcontractors and suppliers, many of whom have been faithfully working alongside us for decades,” they said.
A quarter of the staff had been with the company for 15 years or more, and many had been employed for more than 20 years.
“Despite seeing other construction companies collapse around us over the past year, we never thought we would be one of them,” they said.
“We thought we had the means, forward order book, capability and industry goodwill to get through this.”
They tried to manage escalating labour, material and borrowing costs on fixed-price contracts with very tight margins by using personal cash injections but had to admit defeat last Friday.
“Despite having $120 million worth of projects in the field and a further $90 million ready to start, we could not secure external investment,” they said.
Company patriarch and chairman Paul Murphy: “Nothing has been as bad as this.” Photo: LinkedIn.
Seventy-two-year-old company patriarch Paul Murphy said he was devastated.
“The economic and regulatory environment that building companies are working in now is more challenging than any other I’ve experienced in the past 50 years – worse than the recessions in the 1980s and 1990s and the Global Financial Crisis in 2007-2008. Nothing has been as bad as this,” he said.
He was one of the company’s original employees when it started in 1975. Its first project was the Canberra School of Music at the ANU.
The company was restructured and named Project Coordination (Australia) Pty Ltd in 1981. Paul became managing director in 1989 when he and (his now deceased) business partner Steve Conroy bought the company at that time.
The company expanded in 2000, opening a second office in Wollongong.
It delivered more than 900 projects worth more than $2.5 billion across every state and territory in Australia, predominantly in the ACT and NSW.
These included the National Arboretum Visitor Centre, CSIRO Discovery Centre, more than $100 million worth of work at the Canberra Hospital, a range of public and private buildings and infrastructure, as well as residential projects.
The newly renovated North Wollongong Surf Club. Photo: Keeli Royle.
RSM partner Jonathon Colbran said a small team of about 12 staff would be retained to help the administrators.
“The company directors have also committed to working alongside us to collect monies owed to the company and to help get projects moving again as quickly as possible,” he said.
He said the 14 projects were at various stages of construction, from design and early works to some nearing completion, and all work had ceased.
RSM has taken steps to secure all project sites and will contact project principals, customers and other creditors this week to advise them of their appointment and next steps.
Mr Colbran said an initial review of the company’s books and records had identified more than 200 creditors who were owed more than $20 million. Most debts were less than two months old.
“These numbers are preliminary and are likely to change over the coming weeks as we undertake detailed investigations into the company’s financial affairs,” he said.
The first meeting of creditors will be held on 2 April, online and in-person in Canberra.
Affected creditors should contact RSM via email at [email protected]. Former employees should contact RSM via email at [email protected].
Original Article published by Ian Bushnell on Riotact.
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