Building woes burn software firm

Building software outfit IBS Group is liquidating its construction subsidiary after it too suffered the fallout from construction industry problems in downtown Auckland.

Building software outfit IBS Group is liquidating its construction subsidiary after it too suffered the fallout from construction industry problems in downtown Auckland.

But IBS Group says the parent company, which started life as, and remains, a technology firm, will continue operating and has learnt to “stick to its strengths”.

IBS Group director John Cunningham says the experience contributed to the parent company changing its business model, when it realised it could not be both a technology supplier and have construction workers on site.

“We have lowered our risk profile with a better operational model,” Cunningham says. “We look at it as who learnt, who changed. It is a matter of sticking to your strengths.

“The group is solid, well and going forward.”

Liquidation of International Building Systems (NZ), which employed labourers and contractors, began on January 17, 2001. But the subsidiary stopped trading in the middle of last year after it became obvious that $1.6 million in debts owed to it were not likely to be paid. These were due from collapsed company Goodall ABL, the head contractor on The Quays and other sites, and from Hartner (though still disputed and in arbitration), the main contractor on Auckland’s waterfront project The Watermark (Sebel Hotel).

The subsidiary joined a list of subcontractors caught in these Auckland disputes, which have now prompted Associate Commerce Minister Laila Harre to draft new legislation protecting construction contractors.

Cunningham joined the board of parent company IBS Group in March last year when the company of which he is chairman, venture capitalist Caltech Capital Partners, made a $5 million joint investment with AMP Asset Management. They remain investors, with the aim of finding export markets and continuing development of IBS' products.

Today, IBS Group of Albany has grown to around 25 staff, mostly software developers, and operates several subsidiaries. IBS developed software which automates the roll-forming of steel studs and frames, calculating lengths and allowing frames to be “made to measure” before going to the construction site.

It uses combinations of laser measuring, WAP mobile phone technology, internet data transfer and controlled roll-forming software. Blueprint plans and CAD (computer automated design) files can be directly entered into its programs.

IBS Group’s technology has been used in projects including Auckland’s Heritage Hotel, Auckland Airport Jet Inn, and Auckland University Railway Campus.

IBS is looking to break into the US market and is considering franchising.

Ferrier Hodgson liquidator Neale Jackson says his firm’s investigation into the liquidation has only just begun. He says the structure of the group means IBS Group should be not liable for the debts of its subsidiary, but adds that investigations into the group structure and transactions between them will continue over the next few weeks.

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