SME profile Derbyshire contractor resolute in face of economic downturn and OFT probe
When Wildgoose Construction was last month named by the Office of Fair Trading (OFT) as one of the 112 firms to be investigated for cover pricing, rather than retreat into its shell the firm saw the announcement as an opportunity to prove its integrity.
“We welcome the abolition of this endemic practice as it has created a clear and regulated system among contractors,” says Tim Walker, managing director of the £40m-turnover Derbyshire-based company.
“For the past 112 years this company has had a policy of operating with integrity and honesty. There was no intention by Wildgoose to benefit unfairly at its customers’ expense.”
The practice of cover pricing had been common in the construction industry throughout the country for decades. The OFT’s investigation, which began in 2004, originated from a specific complaint made in the East Midlands, hence the inclusion of Wildgoose, which operates partly in that area.
Following the naming of the firm, John Wildgoose, the group’s chairman and great-grandson of the founder, wrote to his customers assuring them of the company’s upstanding reputation.
“It’s business as usual for us,” says Walker. “These are tough times for the construction industry, but we’ve always made sure we have a diversified portfolio of work, which means we are not susceptible to any downturn in one specific area.”
One sector of the industry that has suffered a particular collapse is the development of new homes. Recent figures show reservation levels have plummeted by two-thirds in recent weeks as housebuilders struggle to find buyers. Housing accounts for 10% of Wildgoose’s turnover. It has also been hit by market conditions and has currently suspended the development of any new homes.
“We’re on the lookout for new opportunities,” says Walker, “but asking prices for land remain stubbornly high. Sellers are not in touch with reality and until we can buy land at realistic prices we’re not going to expose ourselves.”
We welcome the abolition of this endemic practice as it has created a clear and regulated system among contractors
Tim Walker, Wildgoose
Fortunately for Wildgoose, its remaining areas of expertise continue to perform well and the company is expected to nearly double turnover for the current year to almost £40m.
“We operate in a diverse market and that’s our strength,” says Walker. “We’re currently working on 18 projects and it is my job to ensure we always operate at this level, so as one job nears completion, we replace it with new work. Enquiries have slowed, but we’ve still got a strong order book and we’ll be working at capacity for as far as I can see into the future.”
From industrial sheds and historic building renovations to public sector work in the health and education arenas, Wildgoose feels it is a small firm well set to take on the economic perils that have already led to several casualties in the construction world.
“The credit crunch is having an effect on the industry, but I’m looking ahead to the summer and we’re more than confident our profitability will not be affected,” says Walker.
Walker, who claims not to be a political animal, knows on which side his bread is buttered. Many of the projects, which range in value from £1m to £7m, come from the public sector and the group has a number of framework partnering arrangements with the likes of Derbyshire council, Rotherham council and Nottingham community housing association.
“I admit business under a Labour government is good for us,” says Walker. “Labour invests in education and health, and we benefit from that a great deal.”
So, does he believe Gordon Brown’s current leadership problems will resolve themselves in time for the next election in a couple of years? “I hope so – Labour is certainly better for us.”
Estimated turnover 2007/08: £40m (35% education, 35%, health, 20% industrial/ commercial and 10% housing)
HQ: Ashover, Chesterfield
- £5m Care home, Belper, Milford Care Homes
- £4m School, Ilkeston, Derbyshire council
- £4m Mortuary, Bradford council
- £3.5m Incubation centre, Rotherham council
- £3m Medical centre, Goole, Yorkshire, GPI
- £2m Boutique hotel, Finesse Hotels, Derby
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