Wilson Bowden House
The strategic aim of the Group is the maximisation of shareholder value through the long-term achievement of consistent growth in profitability.
This will be achieved by the profitable provision of premium quality housing and commercial property.
One of the United Kingdom's top home builders, Wilson Bowden Plc has targeted the upper end of the housing market, selling four- to six-bedroom homes, with an average floor space of more than 1,200 square feet and an average selling price of more than £157,000. In 2000, the company sold more than 3,600 homes--and has set its growth target at up to 7,000 homes annually. Based in Leicester, the company operates divisional offices in 12 regions, with its core operations centered around the Midlands, but also stretching into the north of England and into Scotland and Wales (the company has avoided the London market). Wilson Bowden Plc operates through three primary subsidiaries: David Wilson Homes Ltd., which handles its residential construction activities; Wilson Bowden Developments Ltd., which guides the company's growing commercial property (retail, office, leisure, and industrial) development activities, and includes its own in-house construction unit; and the newest division, Wilson Bowden City Homes, which has taken over the company's urban and brownfield residential site activity, which transforms derelict urban space into residential properties, with a growing emphasis on apartment complexes. Wilson Bowden has long held a policy of acquiring and holding large land portfolios--its home division alone possesses a land bank of more than 14,000 plots with planning permission. This policy helps protect the company from excessive land pricing cycles. In keeping with this policy, the company has tended to avoid the industry consolidation of the late 1990s, preferring to make direct acquisitions of land, rather than of other construction companies. Wilson Bowden is quoted on the London stock exchange. Its founder, chairman, and chief executive holds 38 percent of the company's stock.
Constructing a Construction Company in the 1960s
Albert Wilson had been working as a building contractor when son David Wilson graduated from the Leicester Polytechnic School of Building in 1961. The younger Wilson joined his father's business, AH Wilson, and steered the company toward property development soon after. In 1966, the company launched its first large development project, acquiring a site in Packington, Leicestershire, where it built a 36-home development. Through the end of the decade, the company expanded further into its Midlands region, adding developments in Rutland.
The company's home building wing flourished and by the beginning of the 1970s AH Wilson was posting revenues of more than £1 million. The company's development activities took on steam in that decade--by 1973, Wilson was building more than 150 homes per year. It had also formed a joint venture, with First National Finance Corporation holding a 51 percent share, called Bowden Park Holdings Ltd. When the British economy slumped into a recession in 1974, Wilson was able to buy out its partner--which was struggling financially--and take full control of Bowden Park. That company remained more or less dormant over the next few years, as Wilson, led by David Wilson after his father's death, concentrated on building up its home sales under the name David Wilson Homes.
Despite the recession's effects on the building market, Wilson remained in good shape. The company had already begun to exhibit the conservative financial policies that were to help it gain success in the 1990s. With low debt levels and tight building cost controls, the company grew steadily throughout the decade. By the beginning of the 1980s, Wilson was building more than 300 homes per year, raising its revenues to more than £13 million.
Wilson had added operations in Lincolnshire in 1974, then extended its Midlands region business still more with the acquisition of extensive land holdings in Hampshire. The company opened a new regional office in Bournemouth to support its growing business in 1979.
In the early 1980s, Wilson sought further growth throughout the Midlands region, turning now to a series of acquisitions to build its geographic position. In 1981, the company added operations in the East Midlands when it acquired William Corah and its land portfolio. The following year, the purchase of JG Parker allowed Wilson to move into Nottingham. The company opened a new North Midlands regional office to support its development there. Then, in 1983, Wilson acquired The French House, a U.K. subsidiary of France's Groupe Maison Familiale. This acquisition added nearly ten new development sites in the South Midlands region, leading the company to open a new regional division to support its growth.
Wilson's success as a home builder led it to venture into the commercial development sector in the early 1980s. The company created a new dedicated division for its growing property development activities and, in 1982, launched its first major commercial development project, that of the 72-acre Meridian Business Park outside of Leicester. That site was later to grow to include more than 200 acres of commercial property. This project helped boost the company's revenues, which neared £40 million by 1983.
By 1986, the company had nearly doubled in size, posting revenues of £65 million. The booming building sector encouraged the company to go public. To do this, the company pulled out its Bowden Park subsidiary and listed on the London stock exchange as Wilson Bowden Plc in February 1987. The company now grouped its residential construction and development activities under subsidiary David Wilson Homes Ltd., while its commercial development operations were brought under subsidiary Wilson Bowden Developments Ltd. With £14 million raised from its IPO--which, at a share price of 130p, valued the company at £87 million--the company established a new Eastern regional office, at Witham, Essex, and the company prepared to expand its operations.
Independent Builder in the 21st Century
Wilson Bowden's timing proved unfortunate. In 1988, the U.K. building sector crashed and the industry--as well as the entire U.K. economy--plunged into a deep recession. Wilson Bowden nonetheless maintained its policy of building long land bank portfolios, giving it a five-year cushion of building properties, and this policy helped shield the company and maintain its profitability.
The company began preparing its comeback at the beginning of the decade. In 1990, the company took on its first urban regeneration project as the British government began encouraging building developers to construct on so-called "brownfield" sites, that is, derelict urban and industrial locations. By the late 1990s, this encouragement was to become law, as the government imposed quotas on property developers. Wilson Bowden's first move into this market came with the acquisition of the 50-acre site of a former power generation plant in Nottingham. The company cleaned the site and constructed the Riverside Complex there.
A stock issue in 1991, which raised £35 million, followed by a second stock issue in 1993, raising £58.5 million, supported the company's return to geographic expansion. In 1992 the company opened its first office in the West Midlands region, near Wolverhampton. Two years later, the company expanded north, setting up a regional office in Leeds. The company added a commercial development office for Leeds the following year as it began to develop sites along the M62 motorway. By then, the residential market had once again begun to grow and the company's home sales were topping 2,000 per year.
In 1996, Wilson Bowden Development added Wales to its regional operations when it joined a partnership to build a retail park in Cardiff Bay. That same year, the company acquired Trencherwood Plc and its Trencherwood Homes subsidiary, based in Newbury, for £10.1 million. That purchase not only expanded the company's home construction business, it gave it an extensive land portfolio of some 6,000 plots with planning permission. Trencherwood continued to operate under its own name before being merged into the David Wilson Homes Southern Region division in 1999. The addition of Trencherwood helped the company's revenues swell to nearly £332 million that year.
Meanwhile, Trencherwood's modest commercial division provided a springboard for Wilson Bowden Development's entry into the region, where the company secured contracts such as a 70,000-square-foot office for Dell Computer, a 96,000-square-foot retail and leisure complex in the Milton Keynes theater district, and, later at the end of the decade, a 130,000-square-foot office park in Chalfont.
After finishing its first commercial property in Scotland in 1997--a £42 million, 130,000-square-foot retail center in Edinburgh--the company set up a dedicated Scottish office in Glasgow in 1998. Meanwhile, the David Wilson Homes division was also stepping up its regional expansion, adding offices in Warrington for the North Western region, in Bristol for the South Western region, both in 1997, and, in 1999, offices for the South Eastern region in Sussex, and in Glasgow. Another regional office was added in 2000, at Hemel Hempstead to cover the Home Counties region. By the turn of the century, the company operated out of 12 regional offices.
The U.K. construction industry, meanwhile, had been undergoing a consolidation spree. Yet Wilson Bowden remained in large part on the sidelines, preferring to concentrate on acquir- ing individual land plots rather than other companies. As deputy chief executive Ian Robertson told the Independent, "Our figures show that we can grow organically. Acquisitions are essentially about buying landbanks. This year, we'll spend £300m on buying land. That is equivalent to a medium-sized acquisition. And we get to pick and choose the sites ourselves."
A growing number of those sites had come to focus on inner-city brownfield locations, as the U.K. government began restricting greenfield development and imposing stiffer quotas; up to 60 percent of all new construction by 2008 was expected to be urban renewal sites. Wilson Bowden itself had stepped up its brownfield development, and by 2001 that sector had come to represent 40 percent of the company's projects. In response to this trend, Wilson Bowden created a dedicated division, Wilson Bowden City Homes, which combined the company's residential development interests with its commercial property development expertise. In 2001, the company announced plans for one of its biggest projects to date, the £1 billion redevelopment of the former Ravenscraig steelworks, located near Motherwell in Scotland. That project was expected to provide new retail, light industrial, and commercial space, as well as 2,500 homes.
Wilson Bowden had risen to become one of the most well-respected of the United Kingdom's property development groups. The company's emphasis on quality over quantity, and especially its focus on the higher-margin, high-end residential sector, had enabled it to build its own revenues to nearly £730 million. With a land bank of more than 16,000 plots with planning permission, Wilson Bowden appeared to have a sound basis for expansion. Indeed, the company hoped to double its home sales in the early years of the new century, to as many as 7,000 per year.
Principal Subsidiaries: David Wilson Homes Ltd; Wilson Bowden Developments Ltd; Wilson Bowden City Homes.
Principal Competitors: Alfred McAlpine PLC; Barratt Developments PLC; Bovis Homes Group PLC; Bellway p.l.c.; Crest Nicholson PLC; George Wimpey PLC; Persimmon plc; Propan Homes Plc; Prowting PLC; Redrow plc; Taylor Woodrow plc; Westbury plc; Wilson Connolly Holdings Plc.
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