Several major projects in Victoria and New South Wales have been hit after the Melbourne-based construction company Lloyd Group was placed in voluntary administration with Deloitte.
The collapse of the construction firm, which mostly specialises in state and local government work, has upended the progress of 59 projects in the two states, and impacted about 200 employees as well as several subcontractors, workers and suppliers.
The company operates offices in Melbourne, Sydney, Brisbane and Geelong, and has executed several projects across education, commercial, local and state government, health and aged care, hospitality, and community sectors. Established in 1979 by Trevor Lloyd, the company is currently headed by directors Clinton and Dustin Lloyd.
Deloitte Turnaround & Restructuring partners Sam Marsden, Sal Algeri, Jason Tracy and Tim Norman have been appointed voluntary administrators of six Lloyd Group firms by the company.
According to Lloyd Group’s 2021/22 financial report, while turnover rose to $275.7 million from $158.7 million, the profit amounted to less than a quarter of the previous year’s $2.1 million. The fall was primarily attributed to rain and flood events that led to procurement losses, project delays, insurance claims and subcontractor insolvencies, and affected a number of projects.
"Like others in the construction sector, and despite significant effort, Lloyd Group has been unable to overcome increasingly challenging circumstances over recent months that have eroded project margins," noted Marsden, one of the Deloitte administrators.
The administrators will now undertake an urgent assessment of the company’s financial position and project-by-project status, initiate communication with project stakeholders, and commence an accelerated sale process.
Several local councils that have been impacted by the Lloyd Group situation have released media statements, expressing their concern and disappointment at the turn of events.
Frankston City Council, which has four Lloyd Group projects in development, stated, “This is a disappointing situation for Council and all involved. Due diligence checks to assess a company’s financial viability are routinely conducted as part of Council’s procurement process prior to engaging a contractor for any major construction project. Lloyd Group were deemed sound for all projects, however in the current increased inflation market conditions, issues such as we are now experiencing are unforeseeable.”
Upper Lachlan Shire mayor Pam Kensit said, “Sadly Upper Lachlan, like several other Councils and schools, has been caught up as yet another builder going into administration. This is such a complicated area of commercial law and we’ve only just been notified so we are still processing this news.”
Bayside City Council said they were working with Deloitte to clarify the next steps for their projects under construction, which include the Dendy Street Beach Pavilion and Tulip Street Basketball Stadium expansion.
Image: The Tesla showroom in Fortitude Valley built by Lloyd Group | Source: Lloyd Group
