Another Perth construction company collapses
Another Western Australian construction company has collapsed blaming increased material costs and labour shortages as well as "distrust" amongst the business' stakeholders.
Modco Residential, owned by Yusuf Khan and Cynthia Lu, is a Perth-based construction company specialising in building steel-framed homes and was launched in 2020.
But the business entered voluntary administration on Monday.
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Modco Residental has entered voluntary administration. Modco Residential
"Despite our efforts to overcome adversities expected in building a growing business, the rapid and unforeseen external challenges ranging from unprecedented industry challenged, perpetuated by a series of controversial articles that created distrust amongst stakeholders became an insurmountable challenge," director Damien Clancy said.
"What initially started as a nation-wide industry challenge of increased costs of materials and labour and shortage of skilled trade forcing many builders into administration in the past financial year was then exacerbated by the intense media scrutiny targeting Modco Residential creating distrust among our trades, vendors, staff, shareholders, clients and the industry insurer QBE."
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Perth couple Yusuf Khan and Cynthia Lu are the owners of Modco Residential. Facebook
Clancy said the business has struggled to acquire skilled tradespeople and retain staff as a result.
"In the face of adversity, we say goodbye with heavy hearts," he added.
GTS Advisory has been appointed as administrators of the business.
It comes as Western Australia's building regulator issued a warning in May this year Modco appeared to be under 'significant financial stress'.
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Building and Energy said when Modco entered external administration - which it now has - impacted homeowners can make a claim on their policy of home indemnity insurance.
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