SA building company All State Construction Solutions collapses owing $2m

A major South Australian construction company has collapsed, owing almost $2 million to creditors.

It has been revealed that the company, called All State Construction Solutions, was forced to close its doors last month, despite working on some major projects in the state, including the convention centre and state library.

It comes as West Australian business Firm Construction went into administration on Thursday after it failed to pull through the financial challenges of 2022, despite it being in business for 20 years and turning over nearly $100 million per annum just two years ago.

Liquidator Nick Cooper from Oracle Insolvency Services was appointed to oversee the administration of All State Construction Solutions, which provided scaffolding and safety services for construction and infrastructure projects, after it sacked its last 20 employees.

The firm had been hit by rising steel costs and a slump in commercial projects.

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A number of suppliers were owed money as well as the Australian Taxation Office, but the 20 employees had received their wages and entitlements, Mr Cooper said.

“Unfortunately, once again we’re seeing the impact of the rising cost of materials on a construction-related business. All State Construction Solutions Australia buckled under the pressure of skyrocketing steel prices,” he told the Adelaide Advertiser.

“When Covid hit major construction projects dried up. The business relied on JobKeeper payments but with the rising costs of materials and commercial work sporadic as the economy emerged from the pandemic, the business could not recover from the challenges.”

The Covid-19 pandemic had a big impact on the five-year old company, which appeared to employ 40 people at one stage, after it invested heavily in equipment for a $3 million project to upgrade The Playford Hotel, which was hit by delays, Mr Cooper added.

Oracle Insolvency Services is seeking to sell assets including scaffolding equipment to recoup money for creditors, while its also investigating whether there is outstanding debt owed to the company from recent projects.

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Overall, the construction industry has been plagued with a spate of collapses this year caused by a perfect storm of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, and extreme weather events.

Earlier this year, two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, went into liquidation.

Regional NSW and Canberra residential builder Tozer Construction Group had been court-ordered to go into liquidation earlier this month, owing at least $1 million.

Victorian construction companies have been particularly hard hit by the crisis.

Two building companies from Victoria were casualties of the crisis having gone into liquidation at the end of June, with one homeowner having forked out $300,000 for a now half-built house.

Then there have been smaller operators like Hotondo Homes Horsham, which was also based in Victoria and a franchisee of a national construction firm – which collapsed earlier this month affecting 11 homeowners with $1.2 million in outstanding debt.

Melbourne-based Blint Builders owes $1.4 million to creditors with the liquidator uncovering “unusual” details about the firm’s operations.

Norris Construction Group, which was in Geelong, collapsed in March with $27 million in debt. It owes $3.2 million to around 140 staff that it is unlikely to be able to repay, according to the liquidator’s report.

Snowdon Developments was ordered into liquidation by the Supreme Court with 52 staff members, 550 homes and more than 250 creditors owed just under $18 million, although it was partially bought out less than 24 hours after going bust.

Others joined the list too including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes and Statement Builders.

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