Major developer’s building licence suspended
THE biggest residential developer in Cairns has had its licence suspended as the building industry watchdog investigates its financial position.
Kenfrost Homes workers have been forced to drop tools after the Queensland Building and Construction Commission suspended the company's building licences amid a crackdown on builders with questionable financial viability.
The company was responsible for one in every 4.5 homes built in Cairns over the past year and is overseeing major subdivisions including Rainforest Edge.
It directly employs about 100 staff but has a subcontractor workforce exponentially larger, with a monthly wages bill of about $1.7 million.
Kenfrost general manager Adam Gowlett said he was confident the firm would get back to work soon.
"As a company that spends tens of millions of dollars per year in employing and contracting local carpenters, electricians, plumbers, tilers, roofers, block layers and various other trades persons, Kenfrost is confident we can work collaboratively with the QBCC on any perceived technical issues as we hold a strong financial position, have no outstanding creditors, have a strong asset position and have operated profitably for over 20 years," he told the Cairns Post.
"Kenfrost is committed to maintaining a business as usual approach.
"The company has a long history of delivering high quality houses across the Far North for over 20 years and has assisted thousands of local families in finding their home."
The Cairns business is not alone in its current predicament.
The QBCC in March suspended the licences of construction giant Laing O'Rourke Australia amid similar concerns about its finances.
In that case, the QBCC claimed the company had been operating outside of its allowable annual revenue limit which presented a serious risk of financial harm to the sector.
The suspension was lifted with Laing O'Rourke issuing a statement saying it had "undertaken internal restructuring to better demonstrate our asset base to the QBCC".
Simonds Homes also had its licence suspended in May with the QBCC saying it had failed to show it had enough assets to support its revenue of more than $350 million.
That suspension has also now been lifted and construction recommenced.
In each of those cases, the suspensions only lasted a matter of days.
Mr Gowlett said Kenfrost was hoping for the same provisions afforded to those two companies to allow work to start again following yesterday's suspension.
"Kenfrost is unique in that it builds on land the company owns," he said.
"Homebuyers only pay for the home at settlement and when they are happy with their new home.
"Kenfrost does not force buyers to settle if their circumstances change or if they are not happy.
"Kenfrost has a number of developments currently under way in Cairns and finishes each estate and every home to a high standard with landscaped parks and gardens.
"Kenfrost pays all of its subcontractors fortnightly which is more frequently and more timely than is required by the new legislation.
"We look forward to getting our subbies and supplier back to work as soon as possible."
The QBCC has been asked for comment.