Evolution in jam over debt level

TRAFFIC control company Evolution Group has put one of its subsidiaries into administration with auditors earlier warning the group’s large debt level could threaten its future as a going concern.

Brisbane-based Evolution, one of the largest traffic control companies in Australia and New Zealand, this week put a subsidiary firm called Evolution Traffic Control into administration owing creditors an estimated $14 million.

Evolution Group, which up until April included Howard Government minister John Moore on its board, has accrued losses of more than $11 million in the past two years.

Evolution Group chief operating officer John Macnamara said the group was not under threat of collapse and continued to operate.

“All existing traffic management contracts are being fulfilled and all employees remain on site with all existing jobs preserved,” he said.

“Furthermore, notwithstanding COVID lockdowns, the group has not retrenched any staff and continues to hire.”

He said the group’s auditors signed off on the company’s accounts in December on a going concern basis and the concerns about liabilities related principally to the debts in the subsidiary now in voluntary administration.

Last month in a filing to the Australian Securities and Investments Commission, the company’s auditors PKF said Evolution had debts last financial year of $23.3 million compared with $8.5 million the previous year.

PKF said that given the debt level, the company’s ability to continue “as a going concern” needed to be considered.