An ASX-listed West Australian scaffolding company has been placed into voluntary administration, yet another victim of the downturn in construction and engineering services, which is suffering high rates of unemployment and insolvency.
The collapse of the WA company comes alongside significant problems on the eastern seaboard as well – the New South Wales Government recently called an inquiry into the industry and why it is suffering such high rates of collapse.
IFS Construction Services announced on September 7 it had appointed Kim Strickland and David Hurt of WA Insolvency Solutions as its joint administrators.
The company operates in both Western Australia and south-east Asia through several subsidiaries including International Formwork and Scaffolding, Hire Access and Specialised Scaffolding Services.
The company’s shares last traded at 3.2 cents. But it has suffered problems for some time.
On August 31, the company requested a trading halt regarding an announcement about its leased premises in Singapore. The landlord was understood to have “taken actions consistent with repossession of the premises”.
On August 27, it announced the appointment of administrators to one of its subsidiaries.
Problems were also earmarked as early as February. The company said in its annual report that a major restructure was underway to return the company to profitability, saying it was working on reducing fixed overhead and variable costs.
The company posted a loss of $3 million in the 12 months to December 31, 2011, up from the $2 million loss it recorded in 2010.
Auditors HLB Mann Judd said in the company’s financial report the annual loss “indicate the existence of a material uncertainty that may cast significant doubt on the consolidated entity’s ability to continue as a going concern”.