For five to 10 years, the sector has provided consistent, growing profits. Yet housebuilders tend to have a share price of only around six times its earnings – other, more unpredictable industries, can expect this figure to be closer to 11 or 12. That's where we should be.
The sector is clearly undervalued – probably a hang-up from the early 1990s. At that time there was a series of write-downs and poor results from housebuilders.
The City still has this in the back of its mind, but with the emergence of between five and seven mega-housebuilders knocking on the door of the FTSE 100, the perception should change.
This will lead to the creation of two types of housebuilder: the big player and the regional specialist. At risk are medium-sized firms that sell 2000-5000 units a year. Wilcon completed 4000 sales in 2002/03 – the perfect size to turn Taywood into a major player.
There's been much speculation, for a good number of years, over the future of smaller housebuilders. At Swan Hill we want to be one of the best regional specialists, with our next objective to hit a turnover of £100-120m. As a listed company, we can never say never to any takeover bid. However, we produce fewer than 300 units a year. I suspect that a major housebuilder is unlikely to come after us – for if they want to get into that top 100, they need to buy the Wilcons of this world.
John Theakston is chief executive of Swan Hill.