'I THINK it will turn round when the clients start thinking about the logistics involved in these companies expecting 30 per cent year-on-year grow th, ' says Irving Weaver.
The boss of contractor and house builder Strata is not alone in predicting ? or hoping for ? a huge volte-face in the direction that the billions of pounds poured into refurbishing the UK's social housing stock is going.
Like a number of other small-to-medium-sized contractors, Doncaster-based Strata is missing out on work that the firm had been doing for years because of large framework deals going to a handful of rapidly growing contractors.
Unlike the bosses of many of those other firms, Mr Weaver's Strata has a booming private house building arm, but there is solid reasoning behind his argument.
'Thatcher and then John Major switched off the pipeline of social housing work, ' he continues.
'By the time firms like us had realised that we had a gap in our workload, we couldn't afford to stay in the social housing market.
'We've worked on 12,000 homes in our area over the past 25 years, but all the clients seem to want to know now is 'When was your last big scheme?' It's all about ticking boxes.
'We employ over 70 plasterers out of a direct workforce of about 270 people because we need the quality they give us for our private house building work.
'Sooner or later, the clients will start to think about the need for that quality. And they will also start to realise the value in a directly employed workforce and that labour is a local market.' Mixing contracting and dynamic growth in house building is a dying trend. A diminishing number of quoted contractors work like this and few private firms are able to tie up the cash generated by contracting to build up a big enough land bank to grow substantially.
Strata is an exception that is looking to reverse this trend, having struggled through the last industry recession, which reduced contracting turnover from £30 m illion in 1987 to just £18 million inside f ive years.
'What made us survive was financial information, ' explains Mr Weaver. 'It was good budgeting and letting people know what we were doing.' Mr Weaver credits that change to the arrival of finance director David Bolton and that open attitude remains at the company. Strata publishes annual results every year and the latest results for the year to March 2005 show turnover surging £10 million to £67 million, with pre-tax profits up £3 million to £13.1 million.
That the business is so prof itable is down to Mr Weaver spending the time after the recession assembling a land bank as cheaply as possible, with a view to moving into private house building.
As a result, Strata ? as he rebranded the company in 2001 ? should sell 470 homes in the latest financial year and has a sizeable land bank of 1,880 plots.
The rebranding came after the government issued the PPG3 planning guidance aimed at increasing density of homes on a site.
'We were reborn when PPG3 came out, ' admits Mr Weaver with enthusiasm. 'We'd got outline planning on a lot of sites, but we came up with a new concept for urban housing.' The average sales price on Strata's developments is a relatively cheap £155,000, which ref lects the market that Mr Weaver is aim ing for. 'We're at t ract ing 25- to 38-year-olds who are a bit yuppy, want to live in a town but not in the centre and need somewhere that's a bit cheaper. The new look of our houses dictated that we re-name the business as we can't tell people that we've been bashing our social housing for years, that we're contractors, and that now we're a new company.' Contracting is not being left behind and Mr Weaver appreciates the value that the cash this generates for the rest of the business. The contracting arm should turn over £30 million this year working in schools, some social housing and also private residential schemes, including jobs for private house builders such as David Wilson, Wimpey and Persimmon.
Mr Weaver says: 'We're going for growth. We want to do more working for these big plc house builders as they generally don't like to do anything different, like converting hospitals.' He also wants to increase the contracting workload by doing more social housing ? hence his frustration with the status quo and fervent hope that clients will start to see his point of view.
Strata employs 240 people within its housing and contracting divisions, which have their own separate building teams, mostly operat ing within a 50 -mile radius of the group's headquarters in Doncaster.
This year, for the first time, the two divisions are working together in a joint venture to regenerate a nursing home in Kenwood, Sheffield.
'Construction's abilities are going to take us into the professional retirement market as we want to broaden our homes market using their skills, ' he explains.
'The way I look at construction, we've got to use it to look at more joint ventures like that. We've also get to get back to what was ou r core market of regenerat ion.
Before PPG3, St rata was building mainly sem idetached houses for private sale. The change to the new, urban-style housing was partly inf luenced by Mr Weaver's son, Andrew, a Cambridge University English graduate, who works at the business.
Mr Weaver adds: 'And rew's real interest is design and we've got a few young people with him and let them have a free reign on the housing side in terms of design.' The housing division is led by managing director Jim Wren, who with construction MD Jim Croll, finance director David Bolton and Mr Weaver make up St rata's board.
Mr Weaver owns all the shares and insists that the progress of his son will not be down to nepotism. 'I am not Andrew's boss, ' he points out. 'He has his own boss within the business and how Andrew gets on will be down to him.
'There's a saying that 'If you leave your children with the value of a good house, that's enough' and I totally agree with that.'