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The only question Barratt chief executive Mark Clare hesitated to answer over breakfast at the Langham Hotel was put by the waitress. Oddly, she wanted to know if he'd like his cheese and ham omelette runny, soft or rubbery.
But the 53-year-old former accountant gave a fluent summary ahead of next week's full-year results of how he has navigated the business through the worst storms in Barratt's 47-year history and into today's relatively quiet waters.
A July 14 trading statement shows the average price of the 11,377 homes sold in the year to June was up 11% on 2009, and forward sales stood at £591 million. This will produce an operating profit of “at least” £85 million.
But there will be no rest for Clare, in what he freely admits “is a challenging market”. The former Centrica boss, whose own homes are in Rickmansworth and Marbella, will next Wednesday produce a decent enough set of results, not far from the figures revealed in the July statement.
But all that jittery City analysts will want to hear is how the man paid £630,000 a year is going to navigate the strengthening economic rip tides. UK net mortgage lending collapsed from £585 million to £85 million between June and July. Nationwide yesterday warned that house prices are falling.
This unease has been around since May, when the share prices of most housebuilders began to fall on fear of Government cuts affecting confidence. The FTSE is down only 6% but Barratt and Persimmon shares are off 23% while Taylor Wimpey's have slid 36%.
“Since the election, there has been a slew of almost uniformly negative statistical evidence,” warns housing analyst Alastair Stewart at Investec Securities. “None of the figures are particularly dramatic. So we are probably looking at a double dippette' rather than a double dip.”
That prediction may comfort a man who has endured a mega-dip. Barratt's share price was 1117p when Clare joined in October 2006. Four months later, in February 2007, he signed a £2.1 billion deal to buy rival builder Wilson Bowden. The market promptly collapsed. Debt soared from almost zero in 2006 to £1.35 billion in June 2007. In June 2008, Barratt owed the banks £1.65 billion and the shares stood at 63p. Between then and June 2009, completions fell from 18,500 to 13,200. A £678 million loss was declared, on sales down 35% at £2.3 billion.
But a £720 million rights issue helped cut debt from £1.65 billion to £1.28 billion. The slow climb back began. Today the debt level is about £900 million and the shares are up to just under 100p. Buyers get no more than a 10% discount, and land is being purchased again.
“Barratt is gradually winning back credibility after paying top whack for Wilson Bowden,” says Stewart. “They have been very innovative, but there is still a hefty debt burden. This will weigh them down for a long time — even if the market holds steady.”
That said, at breakfast Clare looked well able to handle a mere dippette.
Lights, camera, action as birds of a feather are urged to flock to a mini-Soho at Ealing
Neither comely women in gymslips nor Rupert Everett in full headmistressy fig were spotted on a tour of Ealing Studios last month. Sadly, St Trinian's 2: The Legend of Fritton's Gold, also starring Colin Firth and a bevy of suspiciously mature schoolgirls, finished shooting at Christmas. But a stroll round the lot with part-owner, Harry Handelsman, found a crew beavering away on a sequel to Johnny English, Rowan Atkinson's spoof Bond movie.
It all felt very Ealing Studios: a bit 1950s, a bit cramped, a bit makeshift, but with lots of fun being had by everyone. But now the studio is to have a brand-new heart. Handelsman is to activate plans for 85,000 sq ft of production offices to be built around an enclosed square at the centre of this ineffably suburban lot, where cameras have been rolling for over a century.
Handelsman is better known as the boss of cool apartments builder, Manhattan Lofts. He and St Trinian's 2 producer, Barnaby Thompson, bought the studios in 2000, after a deal to move the National Film and Television School to Ealing fell through. In 2001 plans for a comprehensive redevelopment were passed. All but the central piece is there.
So council permission for the four-storey block, designed by Kennington architects Pringle Richards Sharratt, is in place. But Handelsman won't start digging until someone has signed a lease to rent at least half the space. He has high hopes. All but 1000 sq ft of the existing 100,000 sq ft is rented to more than 30 companies in film, video and TV production.
The job of translating those hopes into reality lies with Chris Hiatt of agent Jones Lang LaSalle. He reckons the asking rent of £30 sq ft compares well with £50-£60 in Soho and should attract like-minded firms. “This is a place where you can scoot to work, rather than commute to work. We see birds of a feather flocking together, creating a mini-Soho,” he said. No, not those sorts of birds.
Pidgley's son pops up again to go it alone
Will it be third time lucky for Tony Pidgley junior? The son of Britain's most successful housebuilder, Tony Pidgley senior of Berkeley Homes, is to have another go at setting up his own firm, says today's Building magazine.
His mother funded his first attempt in the early Nineties, Thirlstone Homes. His father bought it for £20 million in 1999 and appointed his 32-year-old son to the Berkeley board. But junior left months later to set up Cadenza.
In 2003 he made a disrespectful £1 billion bid for his father's business. Cadenza faded, and died in 2009. Now junior is to set up Langham Homes with £50 million of private-investor backing and help from Martin Redman, a former director of estate agents Hamptons.
Pidgley senior once snaffled a piece of land from his son, who ill-advisedly boasted of his forthcoming bargain. Junior has now presumably learned to keep mum.
* To lunch at Scribes, the watering hole close to Fleet Street. The guest is Peter Rees, new controller of planning for the City of London. The bearded 37-year-old is very pleased to have got the job, having endured seven years as chief planning officer in Lambeth.
That was in September 1985. On September 26, Rees will be 62 and celebrating 25 years in the job. The beard has gone. But the fierce individualism that made him shaper-in-chief of the City for a quarter of a century remains.
So, if you like the Gherkin or the new Heron Tower, give Rees some credit — he fought for both. If you don't like the canyon of glass boxes along the City stretch of the Thames or the new shopping centre by St Paul's, which opens on October 28, hand him some blame.
