A 32-year-old Napier business has gone into voluntary liquidation with the loss of 10 jobs, missing out on a dramatic recovery in the Hawke's Bay construction sector.
John Managh & Associates' first liquidators report for industrial electrical company SAE Ltd said the breakdown of the working relationship between directors "had an unfortunate effect on the company's performance".
Leading up to the liquidation many creditors withdrew credit with many of its suppliers, making work on hand difficult to complete, the report said.
SAE's data and telecommunications division partnered with the Ministry of Education to provide upgrades to schools around the North Island, completing 44 projects.
Director Warren Foulds said before the company went into decline more than 20 people worked for SAE.
He said the 10 remaining employees all had new jobs.
Mr Foulds said he bought the business, founded in 1981, 11 years ago along with Craig Duffill when they both worked for Scott Applegate Electrical.
He said difficulties started several years ago following the death of a third director/shareholder.
Former director Craig Duffill said he resigned in September "and Warren made the decision to carry on".
Mr Duffill said there were cash-flow problems through clients deferring payments, however, his resignation lowered overheads.
"At that point there was enough work in progress to cover outstanding debt," Mr Dufill said.
Mr Duffill said Mr Foulds originally wanted to leave and let Mr Duffill take over the company "but as things panned out I was in the person to be moving the company forward with the decisions and changes to be made."
The liquidator's report identifies 13 unsecured creditors and six with registered security interests.
Money owed to SAE will be chased by the liquidator. Motor vehicles, tools and equipment will be sold on site by Maidens & Fosters Auctioneers on Saturday.
The liquidation was expected to take 12 months and a creditors' meeting would only be held if requested by a creditor.
Mr Foulds said the failure of SAE was a "devastating" blow and he would be likely forced to sell his house.
The company's demise comes at a time of resurgence in the Hawke's Bay construction industry.
Statistics New Zealand figures show the value and number of new dwellings consented are on the rise.
In October there were 44 new dwellings consented compared with 36 in October 2015. Their value was $18 million, a 50 per cent jump on October 2015.
In September there were 41 new dwellings consented compared with 32 in September 2015 with a value increase of 15 per cent.
In August here were 36 new dwellings consented compared with 23 in August 2015 with a value increase of 85 per cent.
In July there were 45 new dwellings consented compared with 30 in July 2015. At $19m their value was 72 per cent greater than the same month in 2015.
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