Canterbury house builder in liquidation – Kiwibank among creditors owed $1m

Construction companies accounted for one in four overall liquidations in the 12 months to August 2024. Photo / 123RF

A Canterbury house builder is in liquidation owing more than $1 million to creditors after construction projects slowed.

Brenton Hunt of business recovery specialists Insolvency Matters was appointed liquidator of Devon Construction on October 7.

The Kaiapoi-based company built houses in the Canterbury region.

Daniel Broom and Robert Stanton are directors of Devon Construction, according to the Companies Office.

The liquidator said the company was insolvent.

Hunt said construction projects had slowed so much it was not economic for the company to continue.

He said one of the directors completed projects that could be completed before laying off staff and closing everything down as much as he could.

The Herald has contacted the directors for comment but has not yet received a response.

According to the first liquidator’s report, an estimated shortfall – after assets are taken into consideration – of $180,000 is owed to general secured creditors.

Inland Revenue is owed $150,000, while unsecured creditors are owed $800,000.

Unsecured creditors include Carters Building Supplies Limited, DuluxGroup (New Zealand), McAlpines Mitre 10 Mega, PlaceMakers Christchurch, PricewaterhouseCoopers and Wasteco NZ Ltd.

A1 Showers, Diamond Scaffolding, Harrison Bloy Plumbing, Hire King Ltd, Lexicon Builders, Premium Plastering and Sockburn Joinery Ltd are also listed as unsecured creditors.

Among the secured parties were Steel Building Products (South Island), Kiwibank, PlaceMakers Christchurch and UDC Finance.

According to Stats NZ, 33,632 new dwellings were consented in the year to August 2024, down 20% when compared with a year ago.

For the month, 2881 new dwellings were consented, 5.3% lower than in July.

In Canterbury, annual consents fell 9.4% to 6713.

Recent figures from Centrix show how the construction industry has been hit particularly hard amid riding company credit defaults and liquidations.

Business credit defaults were up 5% year on year across all sectors in August, with construction up 22%.

Centrix managing director Keith McLaughlin said construction companies were “more than twice as likely (2.2x) to fail than the typical New Zealand business”.

“Construction companies represent 12% (84,000) of all registered companies across the country, with 26% of liquidations across all sectors coming from the construction industry.”

In the 12 months to the end of August, 546 construction companies were placed in liquidation, accounting for one in four overall liquidations, Centrix said.

Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics including retail, small business, the workplace and macroeconomics.