National builder's collapse leaves millions in debts, costs 200 jobs
Major commercial construction company National Projects & Maintenance (NPM Group), which has offices around the country, has collapsed.
A construction, design and refurbishment company with 192 employees and hundreds of projects around Australia has gone into voluntary administration.
National Projects & Maintenance (NPM Group) was a commercial fit-out company that worked on developments for some of the country’s biggest property entities, including Goodman, Mirvac, GPT, Charter Hall and Brookfield.
The Sydney-based company has ceased trading and appointed insolvency firm Worrells as its administrator.
The group’s demise spells the collapse of 10 companies that were under the organisation’s umbrella and now under external administration. They are National Projects and Maintenance Pty Ltd, NPM Group Holdings Pty Ltd, NPM Projects (NSW) Pty Ltd, National Projects (HQ) Pty Ltd, NPM (VIC) Pty Ltd, National Projects QLD Pty Ltd, National Projects (ACT) Pty Ltd, National Project (WA) Pty Ltd, NPM Home Pty Ltd, and CREO Design Group Pty Ltd.
The company had six state offices and projects from Perth to Sydney.
Company Director Daniel Afonso issued a statement outlining reasons for the demise that closely echo the sentiment of so many other builders that have collapsed in the past couple of years.
“The ongoing market pressures have made NPM's continued operation untenable, due to skilled labour shortages, inflationary pressures, interest rate rises and a commercial sector that continues to suffer from flow-on effects of (the) COVID-19 pandemic.
“We are conscious of the impact the appointment will have on everyone involved.”
Administrator Graeme Beattie also made a statement.
“The administration process is in its infancy and we are working hard to immediately establish the group’s financial position, including identifying assets available for realisation and quantifying creditors’ claims with the assistance of the director and the senior staff of the NPM Group.”
The company’s website states it has completed 45,000 projects on behalf of 778 clients.
Among their projects were a design and fitout for Charter Hall at 8 Mile Plains in Brisbane, office fitouts at 2 Southbank Boulevard in Melbourne, a post-flood refurbishment at HomeCo Lismore, reception and office works in Subiaco, Perth, the design and construction of two full-floor workspaces in a Brookfield tower in Brisbane, and construction works at Australia Square in Sydney.
For many builders and developers, initiating large-scale home building projects in the current environment is simply too risky.
- Denita Wawn, CEO, Master Builders Australia
The Financial Review quoted an unnamed client of NPM as saying problems had been evident for some months, with contractors only paid in part and periodically.
“We felt it was going to happen for a while,” the client was quoted as saying.
“Payments were slow, but we were told a big capital injection was coming, and an investor was going to buy into the company,” the client said.
It is believed some creditors are owed $2-3 million. A creditors meeting is expected to be held on 2 November.
All full-time employees have lost their jobs.
Australian Securities and Investments Commission data showing 2,170 construction businesses went into administration in the 2022-23 financial year alone, 69 per cent more than in 2021-22.
Creditors impacted by the company’s collapse are urged to email npm@worrells.net.au
Housing inflation a major issue
With the release Wednesday (25 October) of the latest CPI figures that showed annual inflation hit a five-month peak of 5.6 per cent, Master Builders Australia CEO Denita Wawn said housing costs remain a significant source of pressure.
“There was a 4.9 per cent increase in new home prices over the past 12 months.
“Housing costs have a major impact on wages and costs right across our economy.
“Taking decisive action to speed up the delivery of the new homes we need will help us win the battle against inflation more quickly.
“The cost of building homes continues to be inflated through unnecessary delays and barriers including planning impediments, lengthy approvals processes and high developer charges.
“The ball is now in the court of state and territory governments to deliver on their commitments on planning reform.
“For many builders and developers, initiating large-scale home building projects in the current environment is simply too risky.
“Despite all the work at a Federal level to pass housing legislation and invest in skills, the Government risks magnifying costs and regulatory obstacles with its far-reaching ‘Closing Loopholes’ Bill.
“The IR Bill means businesses will have even more of their time absorbed by compliance and red tape issues - instead of being out there building new homes,” Ms Wawn said.
