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More pain for Brown & Joy as administrator appointed

PERTH’S eighth biggest commercial builder, Brown & Joy Industries, which built several Bunnings warehouses, has gone into administration, owning creditors about $3 million.

Brown & Joy director Gavin Brown called in chartered accountants Taylor Woodings following a difficult trading year for the Canning Vale family business.

Competitors said there had been speculation about Brown & Joy’s financial position for the past 12 months, with workers at times forced to wait longer than usual to receive payment.

Expressions of interest are now being sought for parties to take over the company’s order book of about 30 jobs.

Ian Francis, partner of Taylor Woodings insolvency division, said a number of factors were behind the demise of Perth’s eighth largest commercial builder, including a slow down in economic conditions and declining profit margins.

Partners Chris Joy and Gavin Brown established the company 13 years ago. Traditionally a shed builder, it is understood the company started to tender on larger commercial work around three years ago and won a contract to build many of Bunnings warehouse stores.

In 2000 it turned over about $30 million in work.

Broad Construction director John Norup told Business News that he had not as yet been approached by the administrators to take on Brown & Joy’s work and that it would be unlikely that Broad would be interested in the company.

He said he had heard complaints from sub-contractors and contractors that they were not getting paid for work on time and noticed other practices which, typically, reflect a lack of liquidity in a building company.

But Mr Norup pointed out that Brown & Joy had a very good, honest reputation in the industry.

He thought the company may have quoted too low on some of its major jobs, which may have contributed to the company’s woes.

Mr Norup said the company may have first run into troubles when it moved into bigger commercial projects.

He said even the smallest of problems on large projects could cost large amounts of money.

This had the potential to quickly eat into the profit margins and turn a profitable job into loss-making project, Mr Norup said.

The administrators are expected to meet with creditors today (July 26) to discuss the future of the company.

Mr Brown did not return Business News’ calls.

The news comes despite a rush of work at the top end of town, with major projects worth $2.35 billion planned for the central city.

Talk of a boom, however, has been played down by the Chamber of Commerce and Industry, which has labelled the sector “erratic”.

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