Regional expansion isn’t easy, but luring senior figures from leading firms can prove decisive. Anwyl’s MD explains how his firm does it as the housebuilder-contractor sets ambitious targets.
“I’m quite proud for people to come and see our new office,” Mathew Anwyl admits. “If we were still at the old office I’d have come to meet you.”
We’re sitting in a meeting room in Anwyl’s head office in Ewloe, Flintshire, just off the North Wales Expressway and only a short hop from the English border. It’s a neatly fitted-out building, which the company built as its new home after deciding to move away from Rhyl – its base since the housebuilder and contractor started up in 1930.
But for the group and for Mr Anwyl, who heads up its housing division, the office isn’t just a building; it’s a mark of the firm’s drive to more than treble its turnover in the next three years.
To do that, Anwyl has poached senior people from some of the UK’s largest housebuilders and planning consultancies – all part of its plan to grow from a £50m-turnover Welsh firm to a £180m powerhouse with a footprint across the entire North-west.
Like the start of any expansion, it hasn’t been without its teething problems, but Mr Anwyl remains committed to ambitious targets.
So how will the firm hit them?
The 46-year-old is refreshingly forthright – not just about his plans for growth but about things that have gone wrong and the lessons learned along the way.
In April Anwyl won planning permission as a developer for its first-ever PRS project, a £60m 366-home scheme in Liverpool, and has hired a long-serving Redrow director to head up its new North-west homes division.
The firm also raided one of the UK’s largest land promoters – Gladman – for two directors to head up its new land promotion business, which will identify land for the wider group to use.
Anwyl head office 1
Another step in its expansion drive has seen Anwyl branch out into student accommodation, with a two-tower £35m project in Liverpool currently out to tender after gaining planning consent last October.
“None of it would have happened 18 months ago,” says Mr Anwyl, who heads up the business alongside his father and group chairman, Graham, as well as his brother Tom, who oversees the construction arm and a pipeline of around £100m. “We’ve been in our new office for that amount of time and it’s opened our eyes to a wider audience.”
The Flintshire base has allowed the company to cast its net wider, with the new Northern homes division launching earlier this year with John Grime, formerly managing director at Redrow Homes North-west, at the helm.
“I don’t see us wanting to get too much bigger because it brings headaches; we need to make sure we’re able to enjoy ourselves and not just be punching out numbers”
The business has a turnover target of £75m within three to five years, Mr Anwyl explains – no mean feat considering the whole group is set to turn over around £53m this year. “He’s got a five-year plan to get to 350 units out of that business,” he says, with the firm looking at opening an office in Chorley to act as a base.
The aim for the first year – 2017/18 – is to get three sites contracted and make a start on two, though Mr Anwyl adds that Mr Grime has had “a running start,” after securing his first scheme: a £23m 122-home site in Prescot. The group’s central housing division, based at its head office, is aiming to build 400 units a year by 2018/19; combined with Mr Grime’s new business, this makes for an annual target of 700 or more within five years.
But Mr Anwyl is matter-of-fact when he warns that pushing growth further after that isn’t in the company’s plans. “I don’t see us wanting to get too much bigger, because it brings headaches – staffing issues, quality control – so we need to make sure we’re able to enjoy ourselves and not just be punching out numbers,” he says.
“We have to be aware of things as we grow, and there have been a few problems over the last year – making sure the quality is there.”
‘No loyalty out there’
Mr Anwyl acknowledges the challenges of expanding into new regions, especially with the firm having to build a supply chain to tackle projects outside its base of Wales and Cheshire.
“I’m not trying to batter sites and get massive numbers because that’s unrealistic; you’ve got to build up your supply chain and working relationships with subbies,” he says. “We’ve found it difficult to get bricklayers and plasterers, and there seems to be no loyalty whatsoever out there at the moment, so how we manage that has been a challenge.”
Anwyl Homes John Grime Mathew Anywl
He adds that Mr Grime has poached two more staff from Redrow – a commercial director and a technical director – to speed up the process.
“What’s definitely become apparent is we need more systems and more protocols because of our growth,” he says. “That’s what John’s brought, and we would be bloody foolish not to listen to him.”
The firm has appointed Phil Dolan and Duncan Gregory, as managing director and land and planning director respectively, from Gladman to head up its new land promotion business.
This business provides funding to seek planning permissions and for land optimisations, and will also forward-sell land to private developers.
“Some local authorities are so sleepy and slow to react, nothing gets done, and it’s bloody hard work. And that’s what stops us going that way”
Mr Anwyl describes it as a separate business, but there is some crossover. “It’s probably something that’s unique for a business of our size. They’ve been going for about six to nine months now and there’s no doubt those guys are so well connected - they seem to know everybody.
“They have given me a great deal of confidence to venture into areas that we haven’t before. They have brought land to us in the North-west and our Welsh business that we have ended up purchasing, so it’s not just what they are doing in the context of land promotion, but also what they are bringing to other parts of the business.”
Bringing senior people into the business has also helped the company test the waters in two new markets – namely the private rented sector and student accommodation.
The first – a £60m development in the centre of Liverpool that ranges between 10 and 22 storeys – is the group’s first venture into PRS, and Mr Anwyl says there has been interest from major contractors, with his firm’s contracting arm not set to do the work in-house. “City centre building is too specialist for us,” he says, adding that Anwyl will act as development manager on the project.
While the PRS scheme looks to be moving forward at a rate of knots, there has been less progress on the second scheme the firm is developing: a two-tower student accommodation project worth £35m, also in Liverpool city centre.
A contractor has yet to be appointed on the project, despite plans being granted in October last year, but Mr Anwyl assures me the scheme is still going ahead.
However, the business owns both parcels of land, allowing it to potentially take the project forward in a different guise.
The lack of progress on the student accommodation market has been part of the group’s learning experience, and Mr Anwyl freely admits that his firm might not always get it right first time.
Anwyl Heathfields Audlum
So with its pilot PRS job making progress, will this be an avenue of further expansion outside of the business’s core areas?
Mr Anwyl gives a straightforward answer. “I don’t see us expanding into that market,” he says. “You can only put so much money out there, and the homes business is cash-hungry. To me it seems you need about five or six years from looking at a site in that market to getting it handed over; it’s a long old job.”
That leaves housebuilding – Mr Anwyl’s core focus – alongside contracting as the company’s two primary areas of activity.
Mr Anwyl emphasises the family-owned nature of the business when he talks about his ambitions for its housing arm, with quality rather than speed being his main focus.
“If you’re trying to get 50 units off each site like some builders are, it can’t be much fun. Yes we do need to sell, yes we do need to hit our target, but the targets aren’t unrealistic; we’ll be doing 25-30 off a site, but the [big housebuilders] will be doing 45.
“‘Profit’ is not a dirty word, but again we don’t want to escalate it to daft proportions and batter sites to death to get lots [of units] off them.”
Best of enemies
It’s evident that doing a quality job is one of the group’s clear aims, but Mr Anwyl is quick to add that he doesn’t see the larger housebuilders as rivals – even if his firm has poached key staff from them.
“I always like to see other firms around here doing well – Elan Homes, Beech Developments, for example. We don’t really get in competition with other developers for land or anything else; we’d rather do JVs with them instead.”
“I can see Help to Buy getting scaled back, and it can’t carry on”
He reels off a list of some of the UK’s largest housebuilders who are currently working with Anwyl Homes on joint ventures – Bovis, Bellway, Redrow, Persimmon – often founded on either land-swap deals or working collaboratively on larger sites.
“There’s enough land around at the moment, not everyone’s going after the same sites, and if they are and they want to pay big bucks, we’d let them have it.”
He cites the example of a site in Oakenholt near Flint, which has planning permission for 600 homes. “At 30 units a year we would be on there for far too long,” he says, but with a land swap deal which saw Persimmon become involved in areas of the Oakenholt site and Anwyl taking land at Persimmon developments in Newton-le-Willows and Alsager, the company has been able to move into new areas while maximising the potential of land it already owns.
Moving at a slightly slower pace than some larger housebuilders has also allowed the firm to manage the industry’s biggest concern: the planning system.
“When you put in an application, you just know it’s going to take time,” he says. “How can you keep everyone happy?
“Some local authorities are better than others; if you go over towards Anglesey or Gwynedd, they’re so sleepy and slow to react, nothing gets done, and it’s bloody hard work. And that’s what stops us going that way.”
However, he adds that the key difference between Anwyl and larger housebuilders is the approach to its product and its projects, and that builders should be doing more to work with planners rather than demonising them. “If you engage with the planners, listen to what they have to say, generally we will change things and work with them.
“That’s the difference; with a plc, they’ll have their product and they won’t change it, and if something gets rejected they’ll go straight to appeal. We will go in, listen to their comments, try to adjust our plans within reason, and get it moving.”
Although he is keen to work with the planning system to make life easier for his firm and for local authorities, he is less enthusiastic about central government – particularly the recent housing white paper.
Mr Anwyl accuses it of failing to give clear guidance on where the sector – particularly in the North of England and Wales – needs to go. He is equally sceptical of the long-term prospects of Help to Buy, which currently accounts for around 40 per cent of the group’s sales.
“I can see it getting scaled back, and it can’t carry on,” he says. “It’s there until 2021, and it has come up on the agenda, but it isn’t at the forefront of our thoughts. We’ll deal with that as it comes.”
It’s that pragmatism that sums up why Anwyl is on course to turn over £180m within five years; taking each new opportunity as it arises rather than ticking over doing the same projects in the same places.
That, Mr Anwyl says, is what has helped the firm attract senior people to help drive towards its target of becoming one of the North-west’s largest regional housebuilders and contractors.
“It’s been an easy sell; you can come here and grow with us,” he says. “Here people are very much involved and very much part of what we’re trying to do.”