One of state’s biggest residential construction firms, Builton Group, has succumbed to the financial stresses engulfing the sector, appointing an external administrator earlier today after reports of the company’s financial troubles emerged last week.
One of state’s biggest residential construction firms, Builton, has succumbed to the financial stresses engulfing the sector, appointing external administrators earlier today after reports of the company’s financial troubles emerged last week.
Cor Cordis partners Dino Travaglini and Jeremy Nipps were named as administrators to Builton's parent Builtoncorp Pty Ltd, as well as four other entities. Both were appointed in similar roles in September to Quattro Homes, a boutique builder with 10 employees.
About 110 homeowners have been affected according to Cor Cordis, with creditors owed an estimated $8 million. It had around 90 employees, more than is typical for the number of starts estimated.
The collapse of Builton was expected after news of its financial distress emerged late last week, initially through the failure of a supplier which blamed the Burswood-based builder.
Business News reported last week that Builton staff had been told not to come to work on Monday, and WA’s Building Commissioner Peter Gow on Friday warned consumers should be cautious about dealing with the company. He said customers should only make payments when the company confirmed its financial situation.
Builton, which trades under the brands Platinum Homes and Aspireon Homes, is the second major homebuilder to go bust in as many years. In 2015, Capital Works Constructions, which traded as Freelife Homes and Visionaire Group, also collapsed.
Investigations into the failure of Capital Works Constructions showed its order book had grown too quickly, at the expense of ensuring work was properly completed, according to administrators at Deloitte.
The state’s home building sector is under significant stress as a record-breaking, mining-driven boom retracts rapidly to a level below that seen for many years. In addition, one of the major growth areas, apartments, has become more volatile.
Builton is also an apartment developer. It is behind under-construction projects Quattro on Burswood and Greenwich on Bulwer.
Builton's signage at the Bulwer site has been taken down. Photo: Attila Csaszar
As insolvency notices have been revealing for the past year that sub-contractors have borne the brunt of the early softness in the residential building market. That also appears to have been the case with Builton. A local carpentry company was reportedly close to collapse itself because of an alleged unpaid account by Builton, and multiple sub-contractors are understood to have outstanding bills, ranging from $70,000 to $135,000.
The pending collapse comes after Builton moved into a $7 million new corporate headquarters in Burswood early last year, to accommodate its 90 staff.
At the time of Builton’s office move, managing director Troy Felt said he expected 2016 to be a positive year for the company, despite a challenging environment for residential builders.
