Builder goes under leaving homes unfinished
Govt wage subsidy not enough to save North Shore firm
An Auckland house builder that was granted more than $120,000 in Government wage subsidies has gone under, leaving homes unfinished. Steven Khov and Kieran Jones of KhovJones are joint liquidators of the North Shore business and say they have secured all the building sites and are talking to clients whose homes are unfinished.
Sika Homes, which had its headquarters in the Wairau Valley, was working in Glendowie, Torbay, Omaha and Glen Innes, Khov said. “There’s a big variety in the state of the homes, everything from trusses up, to one of them which has the cladding and roof on.”
Sika Homes got pandemic wage subsidies of $70,296 for 10 employees and then a further $51,550 for 11 employees, Work and Income’s website shows.
“The liquidators have attended the four construction sites that the company was completing and locked these sites down,” Khov and Jones wrote.
“As part of this process, the liquidators have taken steps to secure assets of the company while an assessment of each build can be undertaken,” the first report said.
Sika Homes described itself as “experts in architectural new builds, renovations and reclads”.
“We are award-winning Master Builders . . . builders of luxury architectural homes and high-end renovations,” it says on Facebook.
“We like to build a partnership between the client, architect and builder where quality always comes first.”
Khov and Jones said the reason for the company’s failure, leading to their appointment, was “due to excessive labour costs and other project cost overruns which eroded profit and margins over time resulting in an unsustainable business model”.
A Sika director told them that cost overruns totalling more than $400,000 across two specific projects had caused the company’s cashflow to run out.
Accounts showed $394,000 owed to unsecured creditors. Estimated losses were unknown at this stage.
The list of Sika’s creditors includes Carters Building Supplies, Placemakers Albany, Mitre 10’s Grove Hardware, Inland Revenue, Prestige Loos, UDC Finance, Registered Master Builders, and suppliers of roofing, plumbing, electrical, and waste bins.
“The company has not been able to recover sufficient profitability to sustain the servicing requirements of its overall liability position.
“Following the exit from level 4 lockdown due to Covid-19, the shareholders have assessed the financial position of the company and elected to place the company into liquidation,” the liquidators said.
A meeting of staff and contractors was called and all were terminated.
Sika’s sole director is Orewa’s Adam James O’Gram, who could not be reached for comment. He is a shareholder along with Terra Firma Enterprises, Rebecca Ann O’Gram, Lachlan Sherwood Sloan and Rochelle Maree Sloan.
“Steps are now been taken to engage with each build owner to determine the fate of their respective construction contracts,” the liquidators said.
Khov said some homes had Master Build guarantees “but some don’t”, meaning people with partly built places will have to find another builder.
“Homeowners have been proactive and we’re giving them as much information as possible. Master Builders will appoint an assessor to the projects with guarantees and ascertain what needs to be done.
“Homeowners are disappointed but they’re doing the best they can in trying to salvage the situation.”