One of Australia’s largest home builders Porter Davis has collapsed and construction firm Lloyd Group has gone into voluntary administration in a hit to the sector.
Grant Thornton Partners confirmed it had been appointed liquidators of the Porter Davis Homes Group, covering 14 companies.
Englehart Homes is the only company in the group not subject to liquidation.
Works on current builds will stop immediately although liquidators are working to find a solution to support customers and some employees, liquidators Grant Thornton said.
Porter Davis has more than 1500 homes in progress across Victoria and 200 properties in Queensland, while a further 779 customers have signed contracts where building is yet to commence.
Rising input costs, supply chain delays, labour shortages and falling demand contributed to Porter Davis’ collapse, the liquidators said.
“Notwithstanding the financial support from shareholders and lenders, the group has exhausted options to secure the further funding required to allow Porter Davis to continue to operate viably,” Grant Thornton said in a statement.
“The directors were left with no option but to place the companies into liquidation.”
The Porter Davis board of directors said it regretted the current circumstances but was hopeful a solution could be found to support Porter Davis customers in completing their homes.
It also acknowledged the group’s 370 employees for their hard work and commitment to Porter Davis.
Lloyd Group has also gone into voluntary administration, Deloitte confirmed on Friday.
The company specialises in the design and construction of building and infrastructure projects for state and local government, primarily in Victoria and NSW.
The process will affect 59 projects under construction – 29 in Victoria and 30 in NSW.
“We do appreciate that this news will be unsettling and potentially disruptive for employees and project stakeholders, contractors and suppliers,” Deloitte restructuring partner and voluntary administrator Sam Marsden said.
“In these early days, we will be undertaking an urgent assessment of the business’s financial position and project-by-project status, and immediately commence communication with project principals and stakeholders.”
The business has about 200 employees.
Mr Marsden said the sector had faced increasingly challenging circumstances in recent months that had eroded project margins.
