Buckeridge family to relaunch sale of West Australian builder BGC
The family behind the late Len Buckeridge’s construction group, BGC, plans to relaunch the sale of the building materials and home building company, its chief executive says, after it recorded a rise in losses to more than $63 million in the last financial year.
The company, one of Australia’s largest builders, had abandoned previous attempts to sell the business due to economic headwinds. The Perth-based BGC has been hit by a severe construction market slowdown caused by tight labour and rising costs.
Bricks stacked up in Perth. BGC is one of the largest builders in the state, and says construction costs are weighing down its business. Heather McNeill
“We will reinitiate the sale in the near future,” Daniel Cooper, BGC’s chief executive, told The Australian Financial Review, adding that the price was yet to be determined. The company was previously on the market for around $1 billion.
A sale process was first started in 2018 during a family battle over Mr Buckeridge’s estate, and an entity representing the estate owns BGC. Mr Buckeridge died in 2014, aged 77. Three of his sons – Sam Buckeridge, Andrew Buckeridge and Julian Ambrose – sit on the company’s board. The family has a wealth of $1.59 billion, according to the most recent Financial Review Rich List estimate published last year.
The $63 million net loss for the 12 months to June 20 compares with a loss of $41.5 million the year before, according to accounts lodged with the Australian Securities and Investments Commission. No dividends were paid out in the last financial year, compared to $65 million which was distributed to the estate the year before.
“BGC ... has been dealing with the challenging situation of a state bereft of skilled trades people,” the company said in a statement to The Australian Financial Review on Tuesday. It added that there was only 13,000 homes being completed each year in WA compared with 22,000 under construction. BGC said build costs had increased by 50 per cent in the past two years and its construction materials business was making up for the weakness in its home-building division.
The revival of a sale process follows the sale of BGC’s plasterboard and fibre cement divisions to Etex, which was announced late last year. The sale is expected to close in February, which the company said would solve its debt troubles.
“The sale strengthens our position, leaves us with zero debt and many millions in the bank,” Mr Cooper said. The company added in a statement that BGC “has returned to normal trading in [the 2023-24 financial year], as home builds return to normalised levels and margins.”
The company has previously shed other assets. It sold its contracting division in 2019.
The company also said its results were hurt by plumbing issues in its commercial and residential properties, which it blamed on pipe manufacturers. BGC has previously said rectifying the issue could cost over $700 million, a figure disputed by the manufacturer.
“The group is expecting a product recall process to be effective by 31 March 2024 that will require the manufacturer to fund future obligations with customers,” the company’s accounts, lodged with the regulator late last month, read. “The findings of an independent expert commissioned by the group have concluded, based on scientific evidence, that the root cause of the failures is due to a manufacturer defect.”
The company disclosed other legal troubles. In September, Brickworks launched legal action against BGC, accusing the company of predatory pricing between 2017 and 2021 in contravention of competition laws. “[BGC] will vigorously defend its position, with legal advice supporting its view that there is little prospect of success by the litigant in the proceedings,” the company said in its accounts. The case will return to court in February.
Subscribe to gift this article
Gift 5 articles to anyone you choose each month when you subscribe.
Subscribe nowAlready a subscriber?
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out moreRead More
Latest In Residential
Fetching latest articles