Growing Alcock Brown-Neaves Group from two building companies to more than a dozen businesses was a matter of identifying opportunities in the market and going after them as they arose, according to the firm’s managing director, Dale Alcock.
Growing Alcock Brown-Neaves Group from two building companies to more than a dozen businesses was a matter of identifying opportunities in the market and going after them as they arose, according to the firm’s managing director, Dale Alcock.
Recent developments within the ABN Group, including last year’s acquisition of steel-framed transportable home builder, T&R Homes, hint towards its expansion into Western Australia’s regional areas.
There’s also the opportunity to develop products to capture the first homebuyer market, which has taken a significant hit as the increasing cost to buy a home prices many people out of the market.
Mr Alcock and his partner, Garry Brown-Neaves, predict the property market in WA will remain strong for many years, fuelled by a growing economy on the back of global demand for the state’s resources.
But both say affordability is a real issue for the sector.
Neither would discuss what products or services the company could be developing to try and capture the first homebuyer market, which accounts for the lion share of its new home starts.
“Affordability is an issue but I think we can manage around that and be creative,” Mr Brown-Neaves said.
“We need to make sure first homeowners are not left behind because they are so important. We need them in the cycle.”
Mr Alcock said the group was exploring “all sorts of avenues” to address affordability issues.
But he declined to provide any detail on what the group planned to do other than to say it was looking at a number of options, including working with the government, which could include joint-venture projects.
“We are also looking at the ownership models through financing and I think we also need to look at the aspiration of first home owners too,” Mr Alcock told WA Business News.
The pair has always serviced the first homebuyer segment.
Webb & Brown-Neaves brought Mr Alcock in to establish a business that could recapture the first homebuyer market, which had been lost as buyers looked to upgrade, pushing the builder into the quality builder market segment.
But a similar thing eventually happened with Mr Alcock’s Dale Alcock Homes, with his customers returning to build bigger and better homes.
Determined to maintain the important first homebuyer market, the pair established the Homebuyers Centre in 1991.
With its catchphrase ‘the first choices in first homes’, the business has been able to hold its ground in the market while its customers can access all levels of the group’s portfolio, which includes options to suit most levels of the market.
Celebration Homes, established in 2002, sits between the Homebuyers Centre and Dale Alcock Homes, providing affordable, large family sized homes.
Second and third homebuyers are more likely to choose Dale Alcock Homes, second-storey builder APG Homes, or Webb & Brown-Neaves.
“It has very much been organic growth,” Mr Alcock said. “We have seen opportunities there and chose to explore those opportunities.
“We don’t necessarily want to be the biggest in a market segment but we want to be the best and be a leader in what we do.
“In a sense, if the volume comes from that leadership position that is fine, but it is not an intention to be the biggest in each corner.
“It’s about saying here is a niche, we think we can do it well because we have the people and the product that we can develop into that market.”
Each business within the ABN Group is operated independently, with a general manager heading up each of the divisions.
Those subsidiary companies extend beyond building homes to businesses in plumbing, ceilings and kitchens.
Dale Alcock Homes also operates a joint-venture in the South West with Graham Teede, Dale Alcock Homes South West.
Each business has been created to either support its building operations, such as the controlling share it has in kitchen cabinet group The Maker, or to chase opportunity, like APG Homes, which was initially called Australasian Property Group, and aimed to capitalise on the boom in Asian property investment in Perth.
However, Mr Alcock cites the establishment of APG as an opportunity pursued that ended up creating headaches for the company.
The business was forced to shut its offices in Jakarta and Singapore after the Asian financial market collapsed in the late 1990s.
“We refocused the business back in to Perth as affordable two-storey homes,” Mr Alcock said.
“We were reactive in a market that had things change. It’s a good example of saying do you shut it down or refocus and say you have a responsibility to the people that run the business that you are doing all you can to change direction and make it work.”
Mr Alcock said each of the individual businesses had its own identity and culture.
“It is flat structured and dynamic, and that has been successful for us,” he said.
“The tricky part is encapsulating that. We tend to like being independent when it suits us and be a group when it suits us.”
As the pair continues to expand the business, they are conscious of the limitations created by the booming economy.
Both men agree it is more difficult to manage their operations during a boom than during a bust.
“You try not to oversell in a boom but you always get caught out in the beginning because you think you are better than everyone else,” Mr Brown-Neaves told WA Business News. “But then you realise everyone is just as busy.”
Mr Alcock said the group could build more homes each year if it had enough staff to complete the work.
Instead, new home sales are capped.
“It isn’t just about today, it is about our reputations being intact and being able to deliver customer service,” he said. “In a busy market you can sell too many homes and fall down on delivery. Our business is repeat or referrals, and customers come back if you have done the right thing and their aspirations are higher.”
Mr Alcock said the group realised there would be shortages and so set up ABN Training in 2004 to provide apprenticeships.
It costs ABN Group about $1 million a year to operate but there are 325 apprentices in the program, providing a flow of trades for the coming years.
