Hutchinson Builders, whose latest projects include RetireAustralia's The Verge at Burleigh on QLD's Gold Coast and Benevolent Living's Benevolent on West in Rockhampton, QLD, saw its net profit fall 93% to $1.34 million, despite its revenue increasing by $500 million to $3.12 billion.
“It’s terrible out there,” Hutchy's Chair Scott Hutchinson said. His company made a profit of $21.2 million in 2022 and $27.7 million in 2021.
“We did not make much money this year and next year we may scramble into the black. The problem is that building costs have gone up 30-40% in the past year.”
Scott said a building boom centred on the Gold Coast in 2021 had been predominantly responsible for driving costs higher.
“It was that boom out of Goldie that killed us,” he said. “It sounds counterintuitive but in construction when turnover goes up profit can go down because you are caught in these fixed-price contracts.”
“We still have plenty of cash, but for the industry it is not a nice situation to be facing,” he said. “It really has been a struggle the past couple of years.”
There were 815 construction-related company failures from July 1 to October 8, according to the latest figures from ASIC (Australian Securities and Investments Commission).
Sydney-based National Projects appointed voluntary administrators last week shutting down major projects across the country. Prebuild, Condev, Privium Homes, and Pivotal Homes have perished.
