Major Plumbing And Electrical Firm Collapses Amid Construction Crisis
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A major plumbing and electrical business has collapsed, making it the latest casualty of Australia's faltering construction industry.
Plumbfirst Group, a Victorian-based plumbing and electrical firm made up of six businesses, was placed into voluntary administration on Wednesday, blaming rising costs of materials for the crisis.
The amount of debt the company owes and number of jobs it is working on is currently unknown, but it's understood the jobs of about 170 staff are currently in limbo.
WLP Restructuring's Alan Walker and Glenn Livingstone were appointed as the company's voluntary administrators.
It joins Victoria's largest private plumbing contractor, Richstone, and Melbourne-based CDC Plumbing and Drainage, who both went into voluntary in the past two months.
Plumbfirst Group (pictured), a plumbing and electrical firm made up of six businesses, was placed into voluntary administration on Wednesday with about 170 jobs at risk
The firm comprises six businesses: 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 issued an urgent call for a party to purchase the group or to inject funds into the companies to keep them running.
'While that process advances, the administrators will continue trading the group with no interruption to ordinary operations expected at this stage,' a statement from WLP Restructuring reads.
'The decision to appoint Administrators was made by the Group's directors after rising materials costs adversely impacted its financial performance,' Mr Walker said.
While increased material costs caused the business to falter, Mr Walker believes that the company's 170-strong staff is an attractive sell for potential buyers.
'The group comprises one of the largest plumbing and electrical contracting operations across southeast Australia with a well-established 170 strong workforce and customer base.
'We are confident that a process to sell or recapitalise the group can move ahead quickly with the objective to maximise recoveries for creditors and minimise disruption for staff and customers.
'We are already working closely with management, employees and other stakeholders to do everything we can to continue to trade the group on a business-as-usual basis while we seek viable options to secure its future.'
The first statutory meeting of creditors will take place on April 24.
The Plumbfirst group of companies has cited increased material costs as a major factor in its faltering performance, and is the third Victorian plumbing contractor to go into voluntary administration in the past two months
Fellow Victorian-based plumbing contractor, Richstone, placed BRI Ferrier's David Coyne and Peter Krejci as voluntary administrators on March 7.
The company's director, Shannon Egglestone, said they were aware of 'the possible ripple effect an event like this can have on our industry'.
'We have been undergoing a restructure so that we can continue to support our staff, customers and suppliers,' Mr Egglestone said.
'The restructure has saved every job of the 160 employees employed by the Richstone Group.'
Mr Egglestone went on to cite increased material costs clashing with fixed price contracts as one of three major factors as to why the company went into administration.
The company's restructure allowed it to secure a purchase from a related company last month.
Construction costs increased at a record-high rate in mid 2022, costing almost 5 per cent more than the previous quarter.
The rate softened in the next quarter however, hvac contractors york pa dropping to just below 2 per cent.
The other two factors Mr Egglestone referenced were 'construction industry inefficiencies due to the worldwide pandemic and cuts to credit lines'.
