Willmott Dixon’s chief exec discusses a good year for his firm in the housing and PRS sectors, and highlights the new challenges brought about by a rising market.
What has been your highlight of 2014?
We have always opined that the construction industry is ‘last in and last out’ of recession, while our political leaders and the public tend to recognise housebuilding as the construction industry and have assumed that business has been booming for 18 months.
So it has been encouraging to see confidence and opportunity beginning to spread back across the real construction industry over the last few months - although heightened demand and diminished supply are bringing their own challenges to every tier of procurer-supplier relations.
From my viewpoint, winning a Queen’s Award for Enterprise for sustainable development was a huge achievement for us. It reflected the work and investment we’ve made, over the recession years, on our performance in areas like social value, carbon and waste reduction, staying resolute to our values and beliefs. Our foundation now invests over £1m a year in community projects, and the desire of our staff to use their skills to leave a legacy beyond their ‘day job’ is awe inspiring.
This year was a major one for our PRS company be:here, which has attracted institutional investment to build hundreds of units in several regeneration schemes in London. Importantly, we have a rare capability to develop homes for sale and PRS together as one scheme, something that we hope will be evident with our involvement at Brentford FC, where we are preferred bidder on the stadium and housing masterplan.
Another investment that continues to pay dividends is our standardised schools product where, working alongside and through Scape, our Sunesis range has taken off nationally and we now have nearly 25 schools being built or completed, creating over 7,000 new places and saving millions in cost and time for local authorities.
And low point?
Another entirely predictable England performance in the World Cup - shocking and woeful. They seem to have started much more brightly in the Euros though!
Has the industry finally seen the back of the downturn?
Our view of the timing of the recovery for our sectors has always leant towards 2014/15, so we were cautiously optimistic that 2014 would see work volumes rise as confidence grew and more schemes became viable.
Our own housing developments in London have sold very well and attracted a lot of interest from buyers both local and international. While positive sentiment in the market increases we are determined not to get complacent as it is clear markets are already steadying again. Happily, having a PRS company helps us to hedge our long-term position in residential development.
What’s been encouraging is that local authority spending has also been robust; from schools to leisure centres, we are active across the country. Another factor in 2014 has been the rise in local authorities embarking on their own house building programmes.
The economic climate has been getting stronger but a rising market has created challenges for us to manage. Resource issues and rising material costs are putting pressure on companies, and we are all working hard to retain as well as recruit.
Although competition for people is high, our staff turnover remains reasonably low, and maintaining a successful environment where that continues will be a priority in 2015.
What are your hopes for 2015?
The election in May will create some uncertainty as we wait to see who forms the next government.
We know that there will continue to be spending constraints but I hope that whichever party or parties are in government, as our industry’s biggest client, they will continue to see the role infrastructure and construction investment plays in stimulating the wider economy and sustaining jobs.
We also have some significant development opportunities we are working hard to get over the line, and 2015 should continue to see our residential development capability grow alongside our core contracting work.
Rick Willmott is chief executive officer of Willmott Dixon