Perth tech contractor goes down owing $1M
- 18 May, 2017 11:30
Market pressures, shrinking sales and stiff competition have contributed to the demise of Western Australian contractor, Aspect Group (WA).
The company, based in Perth, was placed into liquidation in early April, owing nearly $1 million to creditors and former staff members.
While Aspect Group (WA) had predominantly made a name for itself as an electrical contractor, it also acted as a reseller for telecommunications products such as phone systems, teleconferencing, and videoconferencing infrastructure, and counted tech distributors, Ingram Micro and Hills, among its suppliers.
The company was wound up at a meeting of members held on 7 April, with Neil Cribb and Travis Kukura of RSM Australia Partners appointed as joint liquidators.
Aspect Group (WA) had formerly traded under a number of names, including Aspect I.T., Aspect Communications and Aspect Audio Visual.
The company ceased trading when the joint liquidators were appointed, according to liquidation documents filed with the corporate regulator, likely leaving more than 20 of its former employees out of a job.
Among the list of creditors is Ingram Micro, which is estimated to be owed more than $6000 and fellow tech distributor, Hills Sound, Vision and Lighting (Hills SVL) – a division of Hills – which is claiming an estimated $5830.
Other creditors include Rexel, which is owed an estimated $234,118, electrical wholesaler, Middys, which is claiming an estimated $94,919 and the Australian Taxation Office (ATO), owed more than $350,000.
Meanwhile, 21 of the company’s employees are owed a combined total of $134,154.
Altogether, the liquidated company owes $995,837 to creditors and former employees.
According to documents lodged by the liquidator with the Australian corporate regulator, Aspect went down with $582,765 in total assets, which is expected to deliver around $358,000 in estimated realisable value.
Meanwhile, the company has debtors which owe a combined total of $214,131.
The liquidators have engaged an external debt collection agency to help collect the debts owing to Aspect Group (WA). However, it remains to be seen whether these funds will find their way into the pockets of creditors, as responses to the debt collectors’ demands indicate that “numerous” debtors are disputing the claims.
“The chairperson [Cribb] suggested this may indicate the records of the company are not accurate and may, as a consequence, increase costs associated with recovery and investigation,” the documents stated.
Meanwhile, Cribb confirmed that future investigations of the company would include an assessment of insolvent trading, among other matters, including related party transactions and other possible voidable transactions.
Cribb also advised that a “pooling” of assets from other companies, including Aspect Group (WA), was unlikely.
According to the former director of Aspect Group (WA), Graham Hamilton, the road to liquidation was a result of several factors, including a tough trading market, the economic downturn in WA and slimming margins.
“Over the last 18 months, the business has found the market to have dramatically shrunk, and margins on quotes and jobs being reduced to almost zero,” Hamilton said in a statement to the liquidators.
“Competition in the marketplace was seeing jobs being lost to other contractors who, on assessment of the prices being offered, must be doing the projects at negative percentages in an effort to maintain staff and the businesses.
“The economic downturn in the economy has been felt by the business enormously. Several [people] were made redundant, and the business model changed in efforts to work through the challenges, however this proved to be [not] successful or achievable,” he said.
According to Hamilton, sales and quotes had been reducing over the past several months, and the company had reached a stage where there were no future projects coming in to facilitate the ongoing operation of the business.
“As a result…we sought the advice of our accountant, who advised I should consult with an insolvency practitioner,” he said, ultimately deciding that the company be wound up.