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Denne's new undertaking

PROFILE - Denne may be more than 200 years old, but chairman Stephen Kingsman has distinctly modern ambitions. He talks to Steve Menary

'WHAT do you do on the way to the crematorium with a load of old people following you and your hearse breaks down?' asks Denne chairman Stephen Kingsman. Not a joke, but an explanation of why Denne left undertaking behind in the 1970s to concentrate on building.

'The undertaking business had to stop three or four years after I joined as the hearse clapped out, ' says Mr Kingsman, deadpanning an answer to his own question.

Denne was founded in 1803 by William Denne, son of a Kentish Yeoman, who had started training as a bricklayer on August 11, 1770.

Like many building f irms of the time, Denne's carpentry skills were put to good use in the winter, building coffins. The business naturally extended to putting on entire funerals.

Denne remained a family affair, but by the early 1970s was on its last legs until Mr Kingsman's father - a pig farmer - stepped in.

His father bought Denne from the receivers as part of a property deal and Mr Kingsman, who had been doing an agricultural degree, quit university to run the business.

Now 53, Mr Kingsman has spent his entire working life running and owning a business that does not even bearh is name. But this is unlikely to bother him, and he relishes the stories of how Denne once operated.

'When I joined, there were two executive directors left, Gordon and Stan, who stayed on, ' he says. 'They were real gentleman of the industry and, apart from during the war, had always been there.

'Stan did the accounts on the back of a fag packet, but he left after a while as we wanted to be more advanced.'

Mr Kingsman relates this story with a slight air of sadness for a bygone era, but knows that if Denne had not wised up and moved on, the business would have followed those cadavers into the construction industry's own well-stocked chapel of rest.

The second incarnation of Denne would not have lasted another 35 years and turned over £70 million last year if Mr Kingsman was not a serious businessman.

That is evident in the pride he expounds in the achievements at Denne, which clinched its first £1 million job in 1979.

'That job was converting the old Echo Radio Works in Southend into offices for the Joint Credit Card Company, which is now Mastercard, ' he says. 'It went really well and that was the turning point. Once you've done one, people say: 'Can you do another?' That's the way it works.'

Around the same time, Denne also experienced another defining moment with a first project for a housing association to convert a chapel of rest near Deal in Kent into sheltered flats.

'Those were the two jobs that changed the fortunes of the construction business, ' says Mr Kingsman. 'Ever since then, we've worked for housing associations.'

Around 80 per cent of Denne's construction workload remains in residential work for housing associations and a handful of bigger private developers such as Berkeley and English Courtyards.

Denne has never strayed into building its own homes - 'You have to decide what you are and our core expertise is being a good builder, not land dealing and retail sales, ' says Mr Kingsman - but retained the joinery workshop.

With a turnover of about £5 million a year, this business no longer churns out coffin lids but high-quality windows, doors and panelling. The operation services Denne's own work but more recently targeted high-end work, and 90 per cent of the orders are for outside customers.

At present, these range from re-fits on three of the biggest Park Lane hotels to residential schemes for up-market contractor Holloway White Allom, and even a one-off job in Hong Kong for fitout contractor Becks.

Last year, Denne split into four divisions, with a £10 million turnover mechanical services division supplementing the £60 million turnover construction arm and the joiners.

A fourth division covering maintenance is expected to provide about £12 millionworth of turnover this year for clients from housing associations to Eurostar and Camden Council.

'If you don't keep growing then you're finished, ' he says, but this growth will remain in sight of the Kent flatlands that Mr Kingsman grew up in after an expansion to York in the 1990s dented his great expectations.

Out of arm's reach, the expansion led to Denne's first losses in a quarter of a century.

Denne posted a £1.9 million loss for 2001 and the Kingsmans - his brother Nick works with him - drew the knife and amputated the York office, losing a number of jobs.

The move was clearly painful and will not be repeated. Mr Kingsman defines his patch as Southampton to the Wash.

He does venture to Harrogate for the annual housing associations conference, but does not take a stand.

'You're stuck there all day, ' sighs Mr Kingsman. 'The housing association world is a small one and word gets around. Most of our work is referrals or repeat business.'

Unlike some contractors reliant on housing association work, Mr Kingsman is nonchalant about the effect of the recent European Union ruling that forced HAs to tender any jobs worth more than 5 million euros (£3.5 million).

He says: 'It hasn't done the industry any harm at all; it has just made us more competitive.'

For all his genial tales of Kentish times long gone, Mr Kingsman remains a businessman, but one with a heart very much still beating - unlike some of his earliest customers.