Mainscarf, which trades as Hansen Constructions NQ, fell into voluntary administration on January 3, with administrators David Stimpson and Michael Brennan of SV Partners appointed to take control of the North Queensland company.

A report to creditors from April 5 suggests the company’s fortunes started to crumble in 2022, with the company’s estimated working capital ratio falling below one.

A working capital ratio of one is considered to be a benchmark figure for solvency, the report notes.

Through to June 30, 2021, the company’s estimated working capital ratio stood at 1.15, but by the date of administration, according to liquidators, the ratio had shrunk to 0.45.

“The company had insufficient and deteriorating current assets to meet its current liabilities from 2022 onwards,” the report states.

Mr Brennan, speaking with NCA NewsWire, said he believed the company failed because it had taken on contracts it could not manage.

“Everything fell apart from there,” he said.

The April 5 report also notes poor operational management, poor cost control and delays in construction work caused by poor weathers as factors in the decline.

Mr Brennan said Hansen Constructions could owe creditors up to $21m.

In January, the company had an employee base of about 70 workers, Mr Brennan said, but this fell to 40 by the time the company ceased trading.

“During our appointment, it became apparent employees were concerned about their future and were beginning to lose faith the company would be able to continue trading in the long term,” the April 5 report states.

“Despite our best efforts, we found it difficult to maintain the company’s core group of experienced employees who were critical to the business’ ability to complete the current contracts.

“As a result, a significant number of staff resigned during the trade on (period).”

Mr Brennan said the company also owed superannuation to a number of workers dating back to 2017.

“That’s what the company records show us. We’ve sent that to the Australian Taxation Office,” he said.

Liquidators were appointed on April 15.

Hansen Constructions worked on major projects across North Queensland, including work on the Townsville Golf Course and the Elliott Springs residential estate.