And in the City, there鈥檚 a similar distrust. Housebuilders are the small fry that barely show up on radar screens tuned to multibillion-pound-turnover telecoms and pharmaceuticals multinationals. Their one-dimensional businesses are wide open to the volatile housing market or they have liquidity problems, and they haven鈥檛 grasped that the new economy requires them to redefine their businesses. In City-speak, housebuilders are low-rated.
But at least the chief executive of Westbury, winner of this year鈥檚 好色先生TV Award for Major Housebuilder of the Year, isn鈥檛 ducking the issues. Martin Donohue, a long-standing Westbury man and former squaddie, holds his hand up to housebuilders鈥� tarnished public image, is busily diversifying to suit the City fund managers, and has come up with an ingenious plan to improve quality standards.
鈥淲here the market has thrown us challenges, we should have wit and intelligence to meet them,鈥� he asserts. Under attack on the design and land supply fronts, Donohue believes that housebuilders need to stop reacting defensively. 鈥淎s an industry, we should be part of the solution, and not allow ourselves to be identified with the problem. We鈥檝e got planning, design and decontamination expertise, and they鈥檙e there to be harnessed.鈥�
Donohue has also been quick to heed the City鈥檚 call 鈥渢o demonstrate breadth, and provide added value and services, not just volume鈥�. In an age where traditional definitions of what companies do are breaking down 鈥� Prudential sells CDs via its Egg web site and electricity companies sell gas 鈥� Westbury has diversified into white goods, carpets and financial services under the year-old 鈥淲estbury Direct鈥� brand.
But most of all, Donohue wants to talk about his contribution to the drive to improve quality standards. Westbury鈥檚 new Space4 division will manufacture timber-framed wall and floor panels for up to 5000 homes a year. Once craned on to site, the brick skin and the roof are 鈥渞emoved from the critical path鈥�, allowing internal and external trades to work in tandem and the finished product to be completed in eight weeks.
鈥淎t the risk of sounding immodest, we think its a step change from what currently occurs,鈥� Donohue boasts. 鈥淪pace4 will vastly improve precision, finish and quality standard, and provide the customer with an element of choice and individuality in a way the current method makes difficult, if not impossible.鈥� Space4 homes will also exceed the new insulation standards in the revised Part L.
Space4 could even bring interesting social side benefits. Donohue, 54, suggests that factory production can address skills shortages by extending the working life of 50-something tradesmen who would otherwise be lost to the industry. 鈥淥lder B&Q staff are better at giving you their attention. We won鈥檛 quite be the B&Q of housebuilding, but there is an element of that thinking.鈥�
As an industry, we should be part of the solution, and not allow ourselves to be identified with the problem
One City analyst applauds Donohue鈥檚 willingness to take Westbury into uncharted territory. 鈥淚 think he鈥檚 much more flexible than some other chief executives, even though he鈥檚 a long-standing company man. But with Westbury Direct, and Space4, and a joint arrangement with the University of Warwick (to research ways of eliminating snagging defects), he鈥檚 prepared to embrace other things. They take a broader view than just buying land and putting houses on it.鈥�
However, the analyst goes on to raise some criticisms of Westbury鈥檚 recent strategy. 鈥淭hey鈥檝e really failed to get into the South-east market, and they鈥檙e not in the city centre and regeneration markets, which are the strongest part of the economy.鈥�
Nevertheless, Westbury鈥檚 financial performance is bearing up well. Full results for the 4500-unit-a-year housebuilder are due early next month, but the interims were strong: pre-tax profit up 24% to 拢24.6m, turnover up from 拢193m to 拢226m, and operating margins hit 12.4%. The forthcoming results will be Donohue鈥檚 fifth as chief executive, the position he achieved after working his way up from buyer in 1972.
Prior to that, Donohue trained at Laing and Costain, and had a four-year stretch in the army. He says he fell for the recruitment posters鈥� promise of world travel 鈥� and indeed served in Germany and Aden 鈥� but then adds that he was attracted to the 鈥渄iscipline鈥� of construction. 鈥淭here was a training regime that was undoubtedly very beneficial,鈥� he says. In comments like this, or his reflections on the advantages of an older workforce, there is a hint of the retired major.
Looking ahead, Donohue predicts that the City will continue to give housebuilders the cold shoulder until they consolidate into larger units. 鈥淭here鈥檚 a strong argument for it, but it鈥檚 difficult to see where the drivers come from. Long term, there is a need to establish larger units 鈥� the market capitalisations are just too small, they don鈥檛 appear on enough fund managers鈥� screens. Consolidation offers the best hope of a re-rating.鈥�
However, Donohue isn鈥檛 volunteering to lead the charge. Although Westbury has made two acquisitions in the past four years 鈥� Clarke Homes in 1996 and John Maunders Group in 1998 鈥� the company鈥檚 general policy is only to buy something if it鈥檚 for sale. 鈥淲e see ourselves as a player, but I doubt we鈥檇 be involved in a hostile takeover.鈥�
Developing Westbury鈥檚 e-commerce expertise 鈥� both in terms of customer sales and communication, and running supply chains over the Internet 鈥� is a more attainable short-term target. In addition, Donohue says: 鈥淲e鈥檙e interested in collaborating in establishing a web site to act as a marketing shop window for the housebuilding industry.鈥�
