Doubts over future of Preston timber-frame factory, as new chief executive shifts group back to basics.
Housebuilder Wilson Connolly has undergone a dramatic strategic shift back to traditional housebuilding under new chief executive Graeme McCallum.

McCallum, who took over in January, said the group would halve its use of timber frame this year and was unlikely to be rolling out its innovative Lifebuilding division.

McCallum also hinted that the group may sell its Preston-based timber-frame firm Prestoplan after a review of the business next year. The strategy shift follows a profit warning issued by the group last October.

McCallum said: "We are going back to basics. We are looking after the pound notes. It doesn't require rocket science to put it right."

McCallum said Prestoplan was now looking for more external customers as a result of the decrease in in-house work for Wilcon. He said: "If there is enough of a customer base next year, we will consider whether or not to sell it."

McCallum said Wilcon's use of timber frame had not proved economic. He said: "It was costing us too much money. It wasn't the cost of the frames – it was when you got to the site and how the site was managed."

McCallum said the Lifebuilding firm, which is working on a 400-unit community project in Northampton, was not core to Wilcon. Features of the site include a community website, a range of interior fit-outs and low-energy lighting.

He said: "Unless there are very special circumstances we will not be doing anything more [with Lifebuilding]. I regard it as a niche activity."

The strategic shift will see the swift departure of sales and marketing director Jo Kenrick, who will leave the firm in June.

The moves received praise from the City. Peel Hunt analyst Stephen Rawlinson said: "Graeme has added some credibility to the group. It's like the Duke of York with the firm – he marched them up to the top of the hill and he marched them down again."

As part of the shift, McCallum has appointed three new regional chairmen for the group, which trades from nine offices. The three are Tay Homes chief executive Bill Bannister and former Wilcon regional chiefs Chris Hatch and John Coker.

McCallum said the group was aiming to double its operating margin – from 8% to 15% - by 2004. The group's pre-tax profit slipped from £66.7m to £35.1m for the year to 31 December; turnover grew £166m to £709.8m.

McCallum said the firm planned to cut costs by £3.5m a year by 2004 by improving procurement.