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A smooth climb for Mount Anvil's boss

PROFILE

Killian Hurley's long commute from Cork to Hertfordshire shows his commitment to his firm and to his goal of lifting margins at Mount Anvil to 5 per cent by 2005. Steve Menary reports

MOST contractors do not expect their workers to commute for much more than an hour to a job.

Killian Hurley, chairman of St Albans-based contractor Mount Anvil, agrees, so most of his firm's jobs tend to be within the London area.Yet Mr Hurley has an altogether different trek to work - from his native Cork in Ireland to Rickmansworth in Hertfordshire.

'I usually drop my daughter off at swimming at 6.45 in the morning, drive to the airport and get the 7:30 am flight, work on the plane and I'm in the office by 9.40 am, ' says the effervescent Mr Hurley, who is 45.

Though he usually stays in the UK for two or three days before returning, this schedule is hectic by anyone's standards. But he has managed to create a medium-sized contracting and development business that bears little relation to most other contractors.

In common with many of his peers, he is a bean-counter - a chartered accountant who trained with accounting firm Price Waterhouse for five years after graduating from Cork University in 1979.

He had no intention of joining the industry until 1988, when he left Irish grain importer R&H Hall for a job at the country's biggest house builder McInerney.That is just two quick hops from completing a commerce degree to getting into construction. But, in true Irish style, Mr Hurley's story is peppered with anecdotes before the Mount Anvil tale reaches completion.

'I didn't actually want the job at McInerney; I just went for the interview practice because I had been at R&H Hall for four years, ' says Mr Hurley.

He took the job, though, and moved across the Irish Sea to Chorleywood to take over as UK finance director in charge of the firm's commercial property and house-building operations.

McInerney had been in the UK since the 1950s, but the UK economy was about to spiral into a hellish depression that would provide a salutary lesson to Mr Hurley and help shape Mount Anvil.

This insight appears much later, in the middle of a discussion about Mount Anvil's strategy, but is the reason why the firm works mainly on residential-led Private Finance Initiative-style concessions and will not indulge in commercial development.

'It was about 1990, ' says Mr Hurley.'McInerney bought a building in Saffron Hill in London for £7.5 million.Not long after, it got an offer to sell the building, which, after fees, would have netted it £500,000 profit. But it wanted to develop it out.

'About five years later, when I was at Mount Anvil, I was offered the building back for £500,000.'He pauses, before emphasising: 'That's why commercial property is not for us.'

A year after rejecting this sale, McInerney had to exit the UK, although the firm has since returned to work successfully both as a house builder and contractor.

After a management buy-out failed, Mr Hurley and Barry Bennett, managing director of McInerney's UK operation, started up on their own as contractors, and Mount Anvil was born.

In its first year's trading, the new firm turned over £3.5 million, with a staff of 15.Much of this work came from building out of half a dozen unfinished McInerney contracts.Within 18 months, Mount Anvil had the first of several jobs that would start to typify the business: a £9.8 million deal to build 660 student bed spaces at the University of Greenwich in south London.

Since then, Mount Anvil has focused on winning privately funded deals, in which Mr Hurley's company provides the land and other firms provide the funding.

'A key to what we do is focus, focus, focus, ' says Mr Hurley.'We are land-led and we negotiate 95 per cent of our work.We term ourselves as a developer-cum-constructor.'

Instead of being overly reliant on estimators, Mount Anvil relies more on teams of land finders, who source land that the firm then brings to a core group of housing associations, such as Circle 33, Ujima, Asra, London & Quadrant and Town & Country.

The firm has also worked on healthcare schemes, providing they are accommodation-related, but it does not take stakes in these deals.

Mr Hurley says: 'Being an accountant I always want to know what the downside is: whether we can afford it.The first job when we are looking at a contract is to produce a risk register.Where is it? What's in the land? What about road closures? Can we identify the risk?'

He insists that Mount Anvil is not risk averse and would like to take small stakes in deals. But he also points out the cost of investing in land options, with £300,000 riding on one deal - a school in west London.

This can restrict margins.These were 1.7 per cent in 2002, when pre-tax profits rose £95,722 to £581,645 and turnover surged £11.4 million to £40.1 million.

Mr Hurley has his eye on lifting these margins to 5 per cent in 2005, when turnover should hit £50 million.

Having built 4,000 student bed spaces in 12 years, Mount Anvil has grown up considerably.

In 2001, Mr Bennett and Richard Upton, the land finder who helped clinch the University of Greenwich deal and bought a one-third stake in Mount Anvil, took away the development activities to form the Cathedral Group, leaving Mr Hurley with the contracting operations.The deal had been on the cards since 2000, when Mr Hurley left Rickmansworth, returned with his wife Maeve and five children to Cork and took up commuting.

Three other directors still have stakes in Mount Anvil, but Mr Hurley remains the majority stakeholder and is guiding the business.With the firm's straight contracting work providing margins of no more than 2 per cent, he is keen to concentrate on its core housing association clients, which provide 90 per cent of the turnover.

Mr Hurley is adamant that Mount Anvil will not do facilities management to secure long-term involvement in concessions.'Either you do it properly or not at all, because you will lose money, ' he says. But he would like the company to start owning land.

'We're looking into key worker accommodation, where we would actually own the site.That is the next step for us, ' he says.

This might sound like Mr Hurley has sold himself a dummy and failed to learn his earlier lesson, but he insists not.

'I should probably have bought the site in Saffron Hill, 'he admits.'You'll never lose money on property if you can hold on to it long enough, and that's a position we're getting into.'