This article is from the Australian Property Journal archive
ST Hilliers is the latest casualty of the harsh trading environment for construction and building companies, with the business calling in administrators and halting work on 21 projects nationally.
Among the affected projects are the Bernborough Ascot Retirement Village in Brisbane, and reportedly a $150 million waterfront project in Gosford on the Central Coast. St Hilliers also has multiple contracts with the Department of Defence.
It has offices in Sydney, Brisbane, Townsville and Perth. It survived a fall into administration in 2012.
The company had told staff the construction division has made more than $32 million of cash injection over the past two years to keep it going.
WLP Restructuring’s Glenn Livingstone and Alan Walker have been appointed as voluntary administrator of seven entities within the St Hilliers group of companies.
St Hilliers’ real estate development business is not impacted.
Twenty-two people have been made redundant while 80 have retained their jobs for the time being.
“The administrators are working closely with all stakeholders and staff in order to recommence project works at the earliest opportunity,” Livingstone said.
“We are hopeful this can occur in the coming days and that the employment of as many people as possible is preserved.”
Australian Securities and Investments Commission (ASIC) reports show St Hilliers suffered losses of about $12 million over the last two financial years. Construction revenue fell from $164.3 million in FY22 to $154 million in FY23.
The industry has been smashed by record materials costs, supply chain issues, labour shortages and higher interest rates since the beginning of COVID. The producer price index lifted again in the December quarter, meaning building materials are now 33.5% more expensive than before the pandemic.
Administrators and receivers reports were made for more than 1,500 construction companies in the previous financial year, according to ASIC, dominating the number of initial external administrators’ and receivers’ reports – accounting for 28% of the 5,440 recorded across all industries.
Major collapses in recent years have included home builder Porter Davis, which collapsed with 1,700 homes under construction, and Caydon Property Group collapsed, putting more than a billion dollars’ worth of projects in limbo.
The latest data from the Australian Bureau of Statistics shows new home building approvals have remained unimpressive . Master Builders is forecasting that FY24 will see around 170,100 new homes built, well below the 240,000 needed per year to meet the 1.2 million over five years from July as stipulated by the National Housing Accord.
