After the company’s demise a week before, Swan Services’ directors say the company had a turnover of $92 million in the last financial year’ stated a 28 May article by Cara Waters in the Property Observer. However, administrator from Pitcher Partners, Anthony Elkerton, said despite its strong cash flow, Swan Services was affected by both short- and long-term issues.
“We are instructed that the company did have a number of unprofitable contracts and had moved to renegotiate to make them more profitable and was reasonably successful in doing so, [but] these would not take effect until the new financial year,” he says.
Elkerton says Sawn Services had a “major IT disruption” in February which affected its cash flow and over the last week rumours of the company’s financial position were in the marketplace.
‘These rumours were compounded by slow payment to debtors to the extent that Swan Services was unable to make its payroll run on Wednesday, May 22 and had to enter administration.’
“There have been a number of cleaning companies which have gone down over the last two to three years and unprofitable contracts are a recurring theme and it appears people have quoted for cash flow rather than profit,” he states.
As reported in The Age, ‘Swan Services owes $1.6 million to its employees for wages. Its workers were said to earn $17 an hour cleaning shopping centres and $21 an hour in office buildings.’
In addition, Swan Services owes a further $2.7 million to creditors such as cleaning product suppliers, while the bill for government creditors, primarily the Tax Office, is yet to be determined.