With Liverpool still ignoring his advances, the former Redrow boss is turning his attention to a new land-purchase venture. We meet a man throwing himself into his work …
This might not be the best time to meet Steve Morgan. It is just a few days after the construction magnate’s beloved Liverpool FC were beaten 2-0 by serial relegation dodger Southampton, and the defeat still clearly pains him. “We made them look like Real Madrid,” he grumbles.
Sitting in his spectacularly swanky office in Runcorn, a short trip across the Mersey from Anfield, Morgan is keener to talk about his new company, Harrow Estates, which specialises in buying derelict land, cleaning it up and then selling it on for huge returns. But Liverpool FC is the reason why this incredibly wealthy man has been in the news over the past 12 months. And so, at the risk of further sulking, that’s where this conversation must begin.
The leaving of Liverpool
Morgan has tried to buy the club on several occasions. Money is no object, because of the sale of his stake in housebuilder Redrow in 2000. And he is popular with the Liverpool fans. Unfortunately, the current chairman, David Moores, has consistently rebuffed Morgan’s offers. Liverpool needs Morgan’s – or anyone’s – millions if it is to be a force in world football again. But Morgan says the offer he withdrew just before Christmas – after the board took too long to make up its mind – was his last one. “There’s no chance I’ll go back. If they come back to me, maybe.
I don’t know if they know what the hell they want.”
Alan Hanson, TV pundit and former Liverpool central defender, is one man who will be disappointed by this. Only two days earlier he publicly called on the board to bring Morgan in. Morgan says he had no idea that Hanson was going to make the statement, but he is clearly glad that he did. “That was quite nice of him. I know him quite well. He is a good guy, a fantastic player.”
Morgan came close to taking a controlling interest last summer, but the deal collapsed after he saw the price of the new stadium.
“It had been reported at the AGM that it was a fixed price of £80m,” he explains, “but it was way in excess of that.”
There is no chance I’ll make another offer for Liverpool. If they come back to me, maybe. I don’t know if they know what the hell they want
He won’t be drawn on how much it is expected to cost, but reports at the time suggested about £125m. This did not factor in financing costs over the two-year build programme, so the stadium’s out-turn cost could be as much as £140m.
Back to business
Morgan is keen to move on. The £300m he made from the sale of Redrow, the housebuilder he founded, may never enter the Liverpool coffers, but it is financing his new project, Harrow Estates.
Morgan didn’t want to retire – he is in his early 50s and is still happy to get up for his morning shave at 6am – so he set up the land company with managing director Mike Riding in 2002. He has other interests, such as being the largest shareholder in hotel chain De Vere, but Harrow is his favourite child. He works one day a week in the office and estimates he takes up about the same amount of time on his mobile.
The company is of little value in itself, as the properties and assets it owns are scattered among subsidiaries of his holding company, Bridgemere. “Harrow is the company that does all the work,” says Morgan, “it finds the sites, investigates them, works up planning and so on.”
This time last year Harrow was crammed into a 46 m2 office. Today it is in a purpose-built 1000 m2 building. Although this is far too large for the 18 members of staff – much of the company’s work is outsourced – giving the offices a slightly spooky, empty feel.
Perhaps the size is a hint of Morgan’s ambitions for the company. He is taking it beyond simply buying up and selling on dodgy sites. Harrow now looks at investment properties that will not generate significant returns for 15 years. It also works in joint ventures with housebuilders such as George Wimpey and Bellway Homes. These ventures did £20-25m of business in their own right last year and Morgan wants to ramp this up to £100m within three to four years.
In Redrow I had a people business. At Harrow Estates I’m determined not to have that
The joint-venture arrangement suits him, as he does not want to return to housebuilding. He doesn’t want a large organisation to manage – he envisages expanding Harrow to 25-30, but no more – and he doesn’t like dealing with stroppy customers. “In Redrow I had a people business,” he says. “At Harrow I’m determined not to have that.”
He may not have people problems here, but buying up poor-quality land carries its own risks. With his vast war chest, Morgan can take a chance on buying some of the UK’s most toxic land – “some real shit” as he puts it – which means that if Harrow’s contractors clean up properly, so can Morgan. All he has to do is to obtain planning for a high-profile scheme and then sell it on to a developer.
But things can go wrong. “We’ve had a few hiccups. We had a site in Cheshire that was refused planning permission; we went to appeal but lost. We have had to re-evaluate the scheme, go back to the drawing board, and that takes time and money. What we will come up with second time around will give us less return than last time. We’ll be lucky to come back with our shirts.”
That is the kind of risk that he could not take with Redrow, where such costs would invoke the anger of his shareholders and place his neck on the block. At Harrow it’s his cash, his gamble: “It’s not a business for faint hearts.”
Morgan might not mind taking a gamble in business, but he doesn’t like giving up his cash to the taxman. He has lived in Jersey for the past few years, but is finally returning home to Cheshire. His wife, Didy, wanted to move their young family back to its roots – although perhaps not too close to its roots, judging by the architectural designs for Carden Hall, the £8m mansion Morgan is building, which are hanging from his office wall.
In truth, Morgan has never seemed too comfortable in this interview – as though he would much rather get on with his work than chat about whether Michael Owen should have left Liverpool – and at the mention of Carden Hall he makes it clear that he is something of a stroppy customer himself. “I’m so busy with this bloody house, it’s driving me nuts,” he says. “Once the house is finished I can work something close to a normal week.”
And, naturally, the problem with the house is the builders. “It’s always the builders,” he grumbles. A return to housebuilding looks unlikely, then.
Crystal Palace, Southampton, Norwich and West Bromwich Albion are the contenders for relegation from the Premiership. Who do you want to stay up? Norwich. I’m a big friend of Delia [Smith, the TV cook and director of Norwich City FC]. We met on holiday in Barbados.
Which player would you most like to sign for Liverpool? First, get Steven Gerrard [the Liverpool captain] to sign a new five-year deal. After that, Ronaldinho [the Barcelona striker].
Who are the best operators in housebuilding? Tony Pidgley’s got to be up there. He’s a clever old fox. We were the two guys in the industry that called the late 1980s right. Big call that. Gallagher Estates chairman Tony Gallagher’s another clever old fox.
Do you miss housebuilding? Funnily enough, there are aspects I do miss. A lot of the stuff Harrow does is residential, so I do a lot of the fun bits without having the hassle of subbies and customers.