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The UK鈥檚 volume housebuilders saw business fall off a cliff after the financial crash in 2008, with the notable exception of Berkeley, and only began to recover in the last six months or so. What鈥檚 more smaller housebuilders are continuing to feel the squeeze. But one medium-sized London-based firm has been operating under the radar, slowly growing its business through the downturn. It may not be a household name, but Mount Anvil has consistently produced the goods.

鈥淲e鈥檝e been making six figure profits throughout the recession,鈥� says Killian Hurley, Mount Anvil鈥檚 co-founder and executive chairman. We had a nice mix of sites in the right locations and then we also had a number of housing association jobs, which aren鈥檛 the most profitable, but from a cash flow perspective were super. But the key thing was having the right sites in the right locations, which for us is central London. If you get the location right, you really have to eff it up not to make money.鈥�

Mount Anvil鈥檚 results for 2012, published at the end of April, confirmed the company鈥檚 winning streak. Turnover was 拢108m, up from 拢90.5m in 2011, with pre-tax profits of 拢10.1m up from 拢2m. The company also reported that it completed 480 homes last year, up from 165 in 2011, including the redevelopment of charity Action for Children鈥檚 former HQ in Highbury and the Central Square and Seward Street developments in Clerkenwell. At the end of the year, Mount Anvil was working on just short of 1000 homes in the capital, making the firm a significant player in the London residential property market. And with every volume housebuilder, from Redrow and Crest Nicholson to Barratt, making a major play in London, what鈥檚 the secret to succeeding in such a crowded market?

Keeping a tight rein

Mount Anvil鈥檚 strategy involves focusing on desirable sites in central London boroughs - not the sort of prime sites favoured by the Candy brothers in Knightsbridge and Mayfair, rather the fringes of the City and Westminster. According to Hurley, whose quiet Irish cadences can be gently hypnotic, the strategy is also focused on steady growth, never overreaching in terms of debt and minimising risk as much as possible. 鈥淲e use the phrase 鈥榗ontrolled profitable growth鈥� and the other variation of that is 鈥榤aximise profit while minimising risk鈥�,鈥� he says. 鈥淲e鈥檙e never afraid to sell too early. Some developers find that difficult and that鈥檚 fine - they have their own business models and they鈥檙e far bigger than us. But our little business is about that controlled profitable growth.鈥�

You drive a hard bargain, push people really hard, but you do what you say you鈥檙e going to do

Mount Anvil is still relatively unusual in that it acts as both developer and main contractor, a business model that goes right back to the company鈥檚 early nineties roots. According to Hurley, one of the key benefits of the model is that having in-house construction expertise allows the company to consider taking over stalled schemes safe in the knowledge that they have considered all the construction risks. This is most clearly illustrated, Hurley says, in Mount Anvil鈥檚 joint acquisition of the stalled Eagle House development on City Road to the north-west of the City. The acquisition was made with with Morgan Stanley and Area Property Partners, which he describes as a 鈥渢ransformational partner鈥�. Designed by Farrells, the partially constructed tower development includes plans for 276 homes, including 206 for private sale, as well as 6,312m2 of commercial space. 鈥淲e were able to go in there and take an educated view on what the real risks were,鈥� says Hurley. 鈥淲e were able to call on the best consultants, but then also rely on our own expertise. That鈥檚 where that mix of developer contractor is really key for us.鈥�

Hurley adds that the contractor-developer model also allows Mount Anvil to keep a tight rein on costs and makes it easier for the firm to manage reputational risks. 鈥淲ith the scale of schemes we鈥檙e looking at you could be three years in development, so the spec you鈥檝e thought about at the start of year one will not be the spec you鈥檙e going to put in at year three,鈥� he says. 鈥淭he ability to change that at base costs as opposed to paying a contractor makes a big difference. And follow-up customer care is very important as well. So we get full visibility of our customers鈥� experience before they buy and after they buy. And when we get it wrong we can put it right very quickly.鈥�

Mount Anvil鈥檚 long-term outlook is also reflected in its attitude to its supply chain. Hurley says he will always be tough when it comes to negotiating a price, but that once agreed the price is fixed and Mount Anvil will pay on time. This, he argues, engenders a mutual respect between contractor and subcontractor, which makes it easier - and cheaper - to deal with problems. 鈥淵ou drive a hard bargain, push people really hard, but you do what you say you鈥檙e going to do,鈥� says Hurley. 鈥淎nd this comes back to a respect thing. If you earn people鈥檚 respect then when you have a problem you can go to your subbie and they say 鈥榶ep, no problem, I鈥檒l help you out鈥�.鈥�

This relationship is also important, Hurley argues, in ensuring the quality of the finished product and ultimately securing Mount Anvil鈥檚 reputation as a quality developer. 鈥淚 was asked 25 years ago, 鈥榳hat鈥檚 the purpose of a business鈥�, and being a chartered accountant I said a return on capital and all this other bullshit stuff,鈥� he says. 鈥淎nd this fella said 鈥榥o, the purpose of a business is to create a customer because if you鈥檝e no customer you鈥檝e no business鈥�. Keeping that customer then is very important and the subbie plays an important part in that because you don鈥檛 have people on site supervising every day of the week so we need the right subbies with the right ethos who will do that for us.鈥�

If we鈥檙e doing six to 10 schemes we can control that. As you get bigger it becomes more difficult

However, despite Mount Anvil鈥檚 impressive growth record, Hurley says that there are limits to his ambitions for the size of the company. He aspires to build about 500 homes a year over the next five years, all in central London boroughs, no more, no less. So, considering that the company delivered 480 homes in 2012, the company is just about where Hurley wants it to be - any bigger and he would worry that he would begin to lose control.

鈥淭his is why we don鈥檛 want to be the biggest developer in central London - it鈥檚 far too complex and we鈥檙e not bright enough for that,鈥� jokes Hurley. 鈥淚f we鈥檙e doing six to 10 schemes we can control that. As you get bigger it becomes more difficult. For us it鈥檚 about quality and our position in the market.

We鈥檙e seeing an increasing number of people coming back and buying from us a second and a third time. It鈥檚 about the quality. We鈥檙e certainly not the cheapest - we don鈥檛 want to be the cheapest - and we don鈥檛 have to be the biggest.鈥�