"I'm looking at a number of potential acquisitions. I have had a few tentative chats. I would be very surprised if we are not announcing another acquisition before Christmas," he says. "There are businesses out there that were started 10 years ago, whose owners are now wanting to do something, and they don't want to see what has been built up destroyed. They could work with us in bolting on their niche business."
That is what Country & Met did last August when it acquired NorthCountry Homes. The company catapulted itself into the housebuilding top 20 when it acquired the 630-unit-a-year northern low-cost homes business to sit alongside the core Country & Met operation, which has traditionally concentrated on restoration and conversion.
The NorthCountry acquisition smartly captured the zeitgeist. "It is brilliant," says Wicks. "With the market change in the South-east, what a piece of good fortune to have acquired a group in low-cost housebuilding in the North."
Typically, NorthCountry, which operates under five brands in the North-east, Yorkshire, north-east Lincolnshire and north Nottinghamshire, develops surplus local authority land alongside rundown council estates that would be considered no-go areas for many housebuilders. The company does all it can to keep down costs, directly employing 100 trades operatives, including 10 apprentices, and limiting designs to a small number of standard housetypes. The end product would not win any awards for design, but that doesn't deter people from queuing around the block to buy them.
"They're affordable, no-frills homes. Buyers get one row of wall tiles, but if they want any more they have to go to B&Q and do it themselves. They get a gravel drive, we don't do part-exchange – it all keeps the costs down. We are still delivering two-bedroom semis for £65,000," says Wicks. "We pay no more than £6000 per building plot, no more than £50 a square foot for the build, and the average sales price is £70-75 a square foot. We make £8000 to £10,000 profit per house. A lot of housebuilders wouldn't get out of bed for that profit, but if you build enough, it pays well." The firm is expected to build around 700 low-cost units in the North this year.
If the company could only transfer the formula to the South, it could crack the affordable housing shortage, but of course, it's not that easy. "We are looking at a number of initiatives, but they will have to have some subsidy," says Wicks. "Land costs and build costs of more like £100/ft2 make it difficult and the big challenge is affordable housing requirement." Wicks believes that a low-spec product could work in the high-spec Southern market. "We'd all like the luxuries, but it comes down to affordability. If, for the sake of argument, we did a home that wasn't decorated and was sold for a lower price, I'm sure people would go for it. If you can crack affordability in the South-east, the potential is massive."
I don’t understand why the volume players have missed the low-price market. it is ego that drives them
Wicks may be benefiting from good fortune now, but he has also experienced the downside of housebuilding. He started out his career as an apprentice electrician, but swiftly moved on to landbuying and ultimately development, having his own business until recession hit in 1989. "I went spectacularly bust. I've been through the experience of making a lot of money and losing it all," he recalls. Exhausted but undaunted, he founded Country & Met a year later, "buying listed buildings that you can get for £1 but don't know what you're going to unearth," he says. Since then the company's business has broadened into developing mixed communities like Upper Rissington Village in the Cotswolds, and contemporary urban apartment schemes like Blue Granary Wharf in Leeds.
The company went public three years ago, and a year later mounted an aggressive, but ultimately unsuccessful, bid for Tay Homes. "After Tay, I had a number of approaches and NorthCountry was the one that appealed. The company's founder, Jolyon Harrison, has stayed with us. We have bought out the venture capitalists that were a pain to him. Tay was bought by Redrow and has been absorbed – it has ceased to exist, which is typical of a takeover. Because Harrison built up five good brand names we've kept them and let the businesses get on with it."
The acquisition has brought Country & Met's average sales price down – not that Wicks is worried. "It's a case of how low can we go," he jokes. "Other housebuilders didn't want to take on NorthCountry because they didn't want to push down average selling price. People see selling price as linking to profitability, but if you can get the volume you can get the profit. I don't understand why the volume players have missed this market. I think it is ego that drives them to want high selling prices."
Whether low-cost or higher priced, most of the company's output is now in the North, far away from its Harefield head office. "I wouldn't be surprised if we get criticism from our institutional shareholders on why we have an expensive southern base," says Wicks. He says his riposte to such a question would be: "We will be doing more in the South."
Answering to shareholders is something that Wicks is entirely happy to do. "I think going public was a good thing," he says. "We raised £3m initially, another £1m a year later, then we had a £3m rights issue when we were trying to buy Tay. We issued shares to the vendors when we acquired NorthCountry, so Jolyon Harrison has a stake in the business. Shares are my currency. When you look at the companies that have gone private, they have just swapped one set of masters for another. I think a series of companies that have gone private will be going back to the market."
And how far does Wicks want to take Country & Met? "Within five years I'd like to see us make a series of acquisitions, to be building 2000 units a year," he says. "Our market capitalisation at the moment is about £20m and I'd like to get it to £50m in a reasonable period of time. I'm not hung up on volume, but I would like the City to take us seriously as a major player.
Personal & ProfessionalHow long is your working day?
I work as long as I have to during the week, but not at weekends. In our business, if you’re not looking at work, you’re thinking about it. Who is in your family?
My wife and four children, aged six, 13, 15 and 20, plus a dog, two cats and a hamster. My youngest children and the dog are on the cover of our latest interim report, along with the finance director’s. Where do you live?
In a new house, built by a local builder. I’ve always lived in a new house. My previous house was by Country & Met. What are your hobbies?
I invest in shares. Plus I’ve got a personal trainer, so I go running and go to the gym. How is Country & Met performing?
Our 2002 interim results showed turnover at £25.7m, gross margin at 23.9% and pre-tax profit at £2.53m.