central south mid market report
INTERNATIONAL ECONOMIC
ENGINE GROWING AMBITIOUS
Yet, despite this ancestral steadiness, the firm is now moving in a much faster time stream when it comes to business decisions. “We are very flexible; we can move really quickly,” says Charles. “When the gardening programmes all went into decking, we’re timber importers, so we made lots of money out of decking. Then hardwood flooring – that’s been tremendous and we’ve moved into that. Currently it’s natural
GO WITH THE FLOW
Two kinds of flow concern Pennyfarthing Homes executive chairman Mark Adams and managing director Matthew Dukes.
One is cash. The other is rivers.
As the New Milton-based firm prepares for a 40th birthday party with its 75 staff this summer, the two recessions it has weathered have been instructive. With uncertain times ahead, this experience stands the firm, which last year turned over £36m, in good stead.
“I think the experience of the first one when I was relatively new to the business taught me how to avoid it the second time around,”says Adams.
“It’s all about cashflow. You need to make sure you’re in a robust cash position and have absolute focus on cashflow.”
Joining the family firm at just 18, Adams was able to see first-hand the crippling effects of 1989.
“I started as a site manager and then moved into surveying. There was very little work going on. There were building sites standing empty for a couple of years.”
The circumstances led him into working with the group’s banks and financial advisers.
“I managed to get involved in all the negotiations. It made me appreciate cashflow.”
When the 2007-8 crash hit, Pennyfarthing Homes was prepared, thanks to remembering 1989 and, crucially, the years leading up to it.
stone for patios. Products come and go and we come and go with them.”
A history of letting managers trade on their own wit and experience has helped grow an enviable workforce with negligible staff turnover. While something great grandfather Sherborne might choke over is the 21st century ties with local independent competitors; working together in vital buying groups.
Both brothers are chipper about the Brexit outlook for Sydenhams and the UK. They hope for favourable corporation tax and simpler employment law. Time travel would be handy to foresee the snags but UK supply chains and courtship from new overseas traders looks encouraging for the future.
“We’re both ready for the future and excited about it,” says James, “like most in our industry.”
BDO partner, Steve Le Bas with Mark Adams, executive chairman, and Matt Dukes, managing director, Pennyfarthing Homes
“The main lesson we learned was to stop buying land when the price range became ridiculous for a year or two leading into the last recession. This allowed us to trade our way through the recession and take advantage as the country came out of recession.
“There are a whole host of constraints to consider as to where areas suitable and sustainable for development might be, but that’s what we are good at.”
“Forming a relationship with landowners is important,” says Dukes, who manages a ‘hefty’ land bank. “There’s an undeniable shortage of houses. We knew something had to give at some point and we thought the local plan renewals was about the right time.”
“We now employ a strategic land department,” adds Adams. “It’s crystal ball gazing – but it’s educated. With most towns and villages it becomes clear from the rivers and roads, landscape features and the shape of existing settlements where the houses can go.”
THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – JULY/AUGUST 2017
River and cashflow management may be in hand – but the undertow of Brexit brings other challenges.
“I get very annoyed with the doomsayers,” says Adams. “What excites me is taking back control. I’m not anti-immigration – I believe we need immigration – but for me it is more about Brussels and the control.”
Dukes is hopeful of less red tape. “It would be great to remove some layers of bureaucracy; and get some real positive action to open doors for business.”
For more information contact Cheryl Martin 023 8088 1754
cheryl.martin@
bdo.co.uk
*To see the full list of the Central South Mid Market Top 20 for profit growth:
bit.ly/LIN_PG
To download a copy of the BDO New Economy report:
bdo.co.uk/en-gb/new-economy businessmag.co.uk 41
CHALLENGES
RESILIENT
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