‘More than it can shoulder’: Granny flat builder Cubitt’s in administration

‘More than it can shoulder’: Granny flat builder Cubitt’s in administration

Photo: Cubitt's

Cubitt's Granny Flats and Home Extensions, an affordable housing company that has been operating in NSW and ACT for the past 30 years, has been placed into voluntary administration with debts of about $3.8 million.

Directors of the family-owned company have appointed Richard Stone and Brett Lord from RSM Australia Partners as administrators following an ‘emotional’ meeting with staff this morning as the administrators prepare to find a buyer for the business.

The administration has affected 120 building projects on Cubitt’s' books as well as 80 staff, while also leaving about 200 creditors owed a total of $3.8 million.

However, Stone says this is a preliminary estimate that may change following more detailed investigations over the next few weeks.

“We recognise this is a very uncertain time for employees,” says Stone.

“The majority of staff have been stood down, with some essential staff retained to assist the administration process. The Cubitt family have also pledged their full support during this process.”

A statement from the Cubitt family has given some insight into the company’s problems which appear to have stemmed from a decision in 2021 to honour fixed-price contracts and not pass on price rises to their customers.

The company says significant loans forwarded to the company by its owners Ian, Kim and Kate Cubitt bridged the shortfall and allowed the company to complete projects.

“It is with great sadness that the Cubitt family have made the devastating decision to move Cubitt's Granny Flats and Home Extensions into voluntary administration,” says the Cubitt family in the statement.

“This morning, we informed our loyal and hard-working staff in person where possible and remotely via video, some of whom have been with us for more than 25 years, of our decision. It was a very emotional meeting.

“After 30 years building homes, we never thought we’d find ourselves in a position where we’d be saying goodbye to our staff, our business, and the many steadfast customers and suppliers who have supported us. It has been the toughest of days.”

Cubitt's Granny Flats and Home Extensions is headed by managing director Kate Cubitt whose father Ian founded the business in 1994.

The company blames its collapse on multiple factors including the tough lending environment, the rising cost of materials and insurance, as well as taxation changes impacting trade.

The directors say with the various pressures of the post-COVID recovery period and extended rain disruptions to construction, the company ‘has suffered more than it can shoulder’.

The collapse of Cubitt’s is also a blow for the company’s apprenticeship program which Ian Cubitt has been running for the past 30 years.

“With pride, Ian Cubitt has upheld a carpentry apprenticeship program for 30 years, training over 120 qualified carpenters,” says the family.

“In the past two years Cubitt's were proud to start and succeeded with a female carpentry apprenticeship program, qualifying six female carpenters to date.”

The company has built homes along the NSW coast from the Mid-North Coast to the South Coast and west to the Southern Highlands and Canberra.

It also operates display centres in Sydney, Newcastle, Canberra and Wollongong which the administrators say they are taking steps to lock up.

“We will be working with the administrators to provide everything they need to achieve the best outcome they can for Cubitt’s, and its staff, customers, suppliers and other creditors,” says the family.

Stone says the pressures faced by Cubitt’s have been a familiar story for the building industry in recent years.

Cubitt’s has 60 projects located on private properties at various stages of completion, with 49 in NSW and 11 in the ACT. Another 60 are either in pre-construction or have been completed and are awaiting final payments.

“We understand this will be an anxious time for customers while we search for a new owner to buy the business and complete their homes or extensions,” says Stone.

“Our priority is to undertake this process as swiftly and efficiently as possible while keeping them updated on our progress.’’

The administrators do not intend to operate the business through the administration period while they seek expressions of interest for the business.

“Cubitt’s is an attractive business proposition having a solid market profile, quality product and a strong pipeline of work on its books,” says Stone.

“Our primary aim is to sell the business in its entirety, including, where possible, re-hiring employees and completing the projects that are on foot.”

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