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The 14 companies operating under home building giant Porter Davis Homes Group have gone bust, with work on current builds ceasing immediately.
One of Australia’s largest home building companies, Porter Davis Homes Group (PDH Group), announced on Friday (31 March 2023) that it has gone into liquidation and ceased work on all current builds.
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The group, which operates multiple companies in Victoria and Queensland, has around 470 employees and more than 2,000 projects in its pipeline.
While the reason for the collapse has not yet been identified, it is believed that the company had been unable to find a buyer, lender, or capital investor to help support the group as it struggled to stay on top of rising costs and reduced activity.
As such, it does not have sufficient funds or assets available to meet its debts.
The group has appointed Said Jahani, Matt Byrnes, and Cameron Crichton of Grant Thornton Australia as liquidators, who have now taken control of the 14 companies in the Porter Davis Homes Group (PDH Group):
- PDH Group Pty Ltd
- PDH Projects Pty Ltd
- PDH Operation Holdings
- PDH Vic Pty Ltd
- PDH Qld Pty Ltd
- PDH Displays Pty Ltd
- BPS Property Group Pty Ltd
- Barrett Property Group Western Region Pty Ltd
- BPG Resources Pty Ltd
- Barrett Property Group Pty Ltd ATF Barrett Property Group Unit Trust
- BPG West No. 2 Pty Ltd
- Places Homes Pty Ltd
- PDH Design Co Pty Ltd ATF RSS Property Holdings Trust (formerly "RSS Property Holdings Pty Ltd")
- Polarise Pty Ltd ATF Polarise Trust
The liquidation does not include Englehart Homes that PDH Group acquired in late 2021, which will continue to operate in its own right.
Employees of the companies have had their employment terminated and all employees will now become creditors in the liquidation (and will be able to submit a claim for the balance of their outstanding employee entitlements). All unpaid wages, superannuation, and accrued leave entitlements outstanding at the date of liquidation will become a debt in the liquidation.
A handful of staff has been retained in the short term to assist with winding up the businesses.
Given the liquidation, the PDH Group has ceased trading and work has halted on the 1,500 homes currently being constructed in Victoria and the 200 homes in Queensland.
A further 779 signed contracts with customers, where building has yet to commence, are also in jeopardy.
The liquidators have said they are “working urgently to determine if a solution can be found to support customers and some employees, including by engaging with key stakeholders and potential interested parties who may be willing to take over the current customer contracts”.
Grant Thornton will be holding an online webinar with customers next Tuesday (4 April 2023) at 10:00 am to answer any customer queries about the liquidation.
A spokesperson from Grant Thornton stated: “The extremely challenging environment for residential home building has directly contributed to the PDH Group’s financial position, with rising input costs, supply chain delays, labour shortages, and a drop in demand for new homes in 2023 impacting the group’s liquidity.
“Notwithstanding the financial support from shareholders and lenders, the group has exhausted options to secure the further funding required to allow Porter Davis to continue to operate viably, and the Directors were left with no option but to place the companies into liquidation.”
The PDH Group board of directors — who are no longer managing the companies’ affairs — said that they regretted the current circumstances and that their efforts to secure a funding solution for the group could not be achieved.
They acknowledged the group’s employees for their hard work and commitment to Porter Davis and said they were hopeful that a solution could be found to support Porter Davis customers in completing their homes.
PDH Group is the latest casualty of Australia’s growing construction crisis, which began in earnest in 2021 as inflation soared, materials shortages bit, and a skills shortage manifested following the COVID-19 pandemic lockdowns.
Record-low interest rates and home building incentives such as HomeBuilder also exacerbated the issue, as Australians sought to build new homes while the industry was already under pressure.
Indeed, the government recently extended the HomeBuilder deadlines as a result of the ongoing delays in the construction sector.
Given the collapse of many large home building companies, brokers have been busy over the past few years helping support borrowers who are entering into new build or renovation contracts and educating clients on the risks.
School builder Lloyd Group also entered voluntary administration on Friday (31 March), with Deloitte called in as administrator.
[Related: Unfinished Business - navigating Australia's construction crisis]
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