26-year-old Newcastle engineering firm collapses: “Too little light at the end of the tunnel”

A 26-year-old Newcastle engineering and manufacturing company has been placed into voluntary administration in what has been described as “a difficult decision” for the business’ long-term director.

Perfab Engineering, which was established in 1989, is the latest engineering company to collapse amid rising pressures in the industry.

Jirsch Sutherland’s Bradd William Morelli and Stewart William Free were appointed administrators of the company on February 23.

Morelli told SmartCompany the collapse was due to the lack of future work for the business, which he says is currently consistent within the engineering industry in general.

“There was just too little light at the end of the tunnel,” says Morelli.

He says the company’s director, who has been with the company from the start, made “a difficult decision” to place Perfab into voluntary administration and stand down 26 staff. These included engineers, draftsmen and other skilled tradesmen.

“Twenty-six staff were stood down on appointment and we have re-engaged a handful to complete jobs over the coming weeks,” Morelli says.

Perfab Engineering had clients across a range of industries including pharmaceutical, food and beverage, dairy, chemical and wastewater treatment and mining.

Morelli confirmed the director was unlikely to be in a position to put forward a deed of company arrangement for the business and says the company’s assets will now be advertised for sale.

He did not confirm the amount owed to creditors, but says Perfab’s main creditors were its bank and the Australian Tax Office, as well as employees.

“There are employee entitlements also, that’s the big one,” Morelli says.

Perfab’s revenue had been declining in recent years, according to Morelli, and was around $7 million to $8 million last financial year.