Wainhomes back in profit
HOUSEBUILDER Wain Group “turned a corner” last year according to founder and chairman Bill Ainscough as the company swung from a loss to a profit.
The Warrington-based company recorded a 13% increase in sales to £68.9m in the year to June 30, 2010, which contributed to a swing from a £5.3m loss into a £4m pre-tax profit.
“We’ve definitely turned the corner with the business and we’ve got it into a situation where the debt has been brought right down,” said Ainscough. “As it stands, the debt is negligible.”
Wain Group operates two housebuilding divisions covering the South West and the North West of England. The company was formed from the remnants of Ainscough’s Wainhomes empire, which was sold to Taylor Wimpey in a £135m deal in 2002.
At the time that deal was struck, no valuation could be agreed for Wainhomes’ South West division, so it was retained by Ainscough. Two years later, the company set up a North West division in its North West homeland once an anti-compete clause expired.
Wain Group now builds around 600 homes a year – 400 in the South West and the remainder in the North West.
“The North West is a tougher market, because there’s more competition here,” he said. In the South West, he said the firm enjoyed a much stronger position and a more visible profile.
“Our boards are everywhere, so people tend to bring opportunities to us.”
Ainscough said that the South West region “has been very good to us” and had a demographic which was favourable to housebuilders.
“A lot of people move there to retire and it’s one of the few regions in the country with positive inward migration, apart from London. People still retire or buy holiday homes there, and it’s a very nice part of the world.”
Moreover, he said that a land deal it completed with English China Clay when it ceased production in the 1990s gave it a sizable land bank with consent for new homes which it is still developing. The company bought 2,500 acres of land over 21 separate development sites.
“We’ve got a very good land bank,” he said.
Ainscough also said that after a strong first quarter for 2011, he was “quietly optimistic” about the company’s prospects for the current year, although he had some concerns over how public sector spending cuts could impact the North West division.
“Luckily, we’re still seeing a demand for our homes. Margins are nothing like they were but there is business around and people are still buying.”
Accounts show that Wain Group’s bank debt fell from £37.8m to £29.4m by June 30, 2010. Following its year end, the company also renewed a £40m bank loan until 2012.
