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Business interview: Alan Brown, Cala chief executive

Alan Brown. Picture: VisMedia

Alan Brown. Picture: VisMedia

After four years of corporate negotiations that have seen his company first restructure and then change hands, Cala chief executive Alan Brown is happy to be turning his attention back to the business of housebuilding, writes Dominic Jeff.

The Edinburgh-based firm has plans to double the number of homes it builds over the next four years, helped by government stimulus packages, moves to make planning consent easier and backing from the company’s new private equity owners.

Nevertheless, forging a deal that saw the group bought out by Legal & General and Patron Capital Partners might prove good practice as thoughts turn to a likely eventual flotation.

“Being chief executive of a listed company would be different, but I’ve done so many other things that are different in the last four years,” he says.

Since taking over the helm at Cala in the middle of the financial crisis, Brown says his learning curve has been “almost vertical”. Former owner Lloyds Banking Group marketed the company on the basis of its dynamic management and Brown, a quantity surveyor by trade, learned about corporate finance, banking and tax as he became part of the negotiations.

He says the process was enjoyable, and alongside fellow managers he invested £10 million in the company. The £210m deal was unveiled in March and he still speaks to management at Patron, the lead partner in the buyout, every day.

Not that Brown has ever forgotten what the firm is all about – he loves the fact that building is still a very “human industry”.

“People buy the land, put in planning applications and finally someone actually puts a spade into the earth – maybe not actually a spade, but someone certainly drives the digger,” he says.

It was by using his experience of the 1989 recession and focusing on people that Brown was able to turn sales around in England during the crisis in 2008, a performance that earned him the top job at Cala. He sat down with sales staff at each site and approved deals on individual houses in order to get cash flowing into the company again, and was soon replicating the process north of the Border.

Having joined the group in 1986 in the south east of England, Newcastle-born Brown held various positions with Cala in England and decided against moving the family home when he became chief executive. Instead, he bought a second home in North Berwick and spends alternate weeks working in Edinburgh and around Cala’s English operations.

The father of three grown-up children says family “is the most important thing”, and he didn’t wish to move from Stratford-upon-Avon, which is “only” three hours from headquarters thanks to its proximity to an airport.

He says the split makes sense anyway, not only because it reflects the approximate ratio of Cala’s business north and south of the Border, but also because some of the corporate side of the business, such as banking, is gravitating towards London.

In its last trading update Cala highlighted its booming business in the south east of England, where a robust if controversial stimulus package not available in Scotland is helping sales to take off. Brown says that focus was mostly driven by the demands of the market – another hint that the firm’s backers are eyeing a float – but Cala’s spiritual home remains Scotland.

Indeed, he plans to expand the Scottish business by 50 per cent over the next three years, returning to Cala’s roots by building desirable homes for a new generation of energy workers in the north east.

Originally incorporated in 1875 as the City of Aberdeen Land Association, the firm moved into residential development during the oil boom of the 1970s, building homes for oil executives on land owned since 1900. Brown says that with the Granite City experiencing an influx of well-paid workers for a new generation of alternative energy firms keen to tap into Scotland’s offshore expertise, it is once again a key growth area. The group has built up its land bank in the area and is sitting on about 2,500 plots in “the very best locations”.

Brown also prefers the approach to housing north of the Border, where the authorities have been less inclined to stifle development.

“In England there was a lot of nimbyism and even councils elected on ‘no development’ platforms,” he says. ”Here they have been much more visionary and acknowledged that for Scotland to compete on a global scale you have to create housing, and high quality housing to bring in affluent people.”

Keen to build its way out of economic stagnation, the UK government has finally taken heed and is forcing English councils to make land available. Brown says only about half have so far embraced the new policy, but the appeals process has been beefed up to deal with those that won’t.

Because the government is encouraging building, Brown doesn’t expect prices will soar the way they did once the property market picked up after the previous crash, when supply was relatively constrained.

Instead, conditions look good for builders and that means a flotation may soon look tempting but Brown insists that for now, its current situation is perfect for Cala.

He says: “We don’t have a timeframe allocated at the moment, it’s just a case of taking this wonderful opportunity we have and ensuring we invest the money in the right places.”

30 second CV

Born: 1960, Newcastle-upon-Tyne

Education: Whickham Comprehensive School, Newcastle, then East Croydon Technical College (day release)

First job: Laws Stores Whickham as shelf stacker and cleaner

Ambition while at school: To be a surveyor

The car you drive: A Range Rover Evoque

Kindle or book? Kindle

Music: Wide and varied, but Coldplay and U2 in particular

Can’t live without: My family

Claim to fame: Used to be mistaken for Prince Andrew

Favourite place: Anywhere I am with my children and grandchildren

What makes you angry: Laziness

Best thing about your job: We build real things for real people with real people

 

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