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Michael Prater joined the family roofing business in Deptford at just 15. He鈥檚 now 66, while the firm, which he has run for the past three decades, turns 60 next month. It is fair to say that neither of them is exactly slowing up with age.

Prater (Ltd) came top in 黑洞社区鈥檚 ranking of UK envelope specialists in November, with turnover of 拢65m and jobs such as Arsenal鈥檚 Emirates stadium and the Heathrow T4 extension under its belt. It has recently won work on the Olympic stadium, velodrome and media centre, as well as three PFI hospitals, has 拢6.5m in the bank and is set to take about 拢5m in profit from 2009.

Prater (Michael), meanwhile, is busy plotting the company鈥檚 international expansion and appears to have absolutely no plans to retire. And he still works out twice a week.

Not that this story comes without a health warning. Like everywhere else, the company鈥檚 margins are down (by about 5%). But it has seen off three previous recessions, as well as an extremely close brush with its own mortality. The south London outsider, which started out in the fifties laying mastic asphalt to waterproof roofs, basements and water tanks, has become one of the great survivors. Here鈥檚 how it was done 鈥�

Back when it was set up by Michael鈥檚 chemist father Fred, the firm was a one-man operation. Michael, whose accent still gives away his Deptford roots, says with one of his frequent smiles: 鈥淚 remember my father working seven days a week and we had very few holidays. But after 10 years, he had 60 or 70 people working for him.鈥�

The teenage Michael was anxious to join the firm. He started 鈥渨orking on his knees鈥�, as mastic asphalters described their work in those days. After three years, he spent a year working for a manufacturer in order to 鈥渓earn about the product鈥�. He says that through it all, 鈥渢he best thing was that I learned about people; people are important to me鈥�.

Michael then returned to Prater and has 鈥渄one just about every job in the firm鈥�. He became managing director in his mid-30s and took over operations, while his father kept control of the financials until his retirement 15 years ago. Around this time he realised the firm needed to evolve. 鈥淗igh performance felts were developing and that was putting mastic asphalt under pressure so we needed to offer both.鈥� In the mid-seventies 鈥渟ingle ply was becoming popular with architects so we added a third product鈥�.

Michael learned the importance of diversification early. In the recession of the mid-seventies mastic asphalters were struck by both a lack of contracts and several very cold winters. 鈥淎 lot of firms that only did roofs went under at that time. We had basement and internal flooring jobs and that is the only reason we survived.鈥�

In the early eighties, Prater added yet more strings to its bow, going into built-up metal systems, composite and rain screens, and becoming a Kalzip installer.

But then, in 1996, a single waterproofing job almost brought the whole lot crashing down. The company agreed to work for a glass contractor 鈥� 鈥渟omething we would never normally do鈥� 鈥� on the Bluewater shopping centre rather than the main contractor Bovis Lend Lease. The glass firm, English Architectural Glazing, went into liquidation owing Prater a catastrophic 拢1m. 鈥淥ur turnover was only 拢18m at that time,鈥� Michael says, 鈥渁nd we certainly did not have enough liquidity to cover the debt.鈥�

It was better to be honest with people, so I met every single managing director in my supply chain and they all cut me some slack

It was a 鈥渢errifying鈥� time for Michael but he decided to be upfront with the bank and with all the firms in the supply chain in a desperate bid to gain time to pay off debts and get paid for anything it was owed. 鈥淚 felt it was better to be honest with people, so I met every single managing director in my supply chain and, to a man, they all cut me some slack. The bank agreed to support me, too. And we traded out of it.鈥�

The firm brought in stringent financial controls after this near miss. 鈥淪ince then we have always insured our debt, we always have cash in the bank [hence the present 拢6.5m hoard] and we fund our working capital ourselves.鈥� The firm also refuses to take a job unless it can get credit insurance 鈥� which means it tends only to work with the big contractors.

Three days of each month all staff running projects throughout the UK come to Prater鈥檚 head office to do cost valuations and discuss the progress and programme of each project. Tendering is also tightly controlled. 鈥淲e have had projects that haven鈥檛 gone well and it鈥檚 usually because we got the estimating wrong,鈥� Michael says. 鈥淣ow, we鈥檒l receive a tender and hold a meeting to discuss it, then we鈥檒l have a mid-tender meeting while we鈥檙e working on it and then a final review of the tender 鈥� all four departments [estimating, design, operations and commercial] get involved.鈥�

Despite this conscientious approach, the 2009 turnover of 拢65m will be flat at best this year. To address this the firm has frozen salaries and made a handful of redundancies among its now 200-strong staff, although 130 of its workers are subcontractors, so can be dropped at no cost if necessary. Prater has also negotiated fixed prices for the coming months with aluminium suppliers. As a result he鈥檚 confident operating profit will be on a par this year with last year鈥檚 拢5m.

Profit will also be helped by the fact that the firm has been manufacturing its own curtain walling sections, windows and doors at its new glass fabricating plant in Thurrock, Essex since December, which, Michael says, will cut costs. It has also been fabricating its own light gauge metal since acquiring a factory in Crowborough, Essex, from Kingspan two years ago.

However, Michael is under no illusions: 鈥淭here simply is not the volume of work and margins are lower. People who don鈥檛 have their financials straight will go bust.鈥� The company is dealing with its own 5% drop in margins through a mixture of strict financial controls, cost-cutting and investment.

Prater鈥檚 next goal is to expand the business overseas, taking turnover, he says, to 拢120m in five years 鈥� by which time he鈥檒l be 71. There is a succession plan in place 鈥� a decade ago Prater relinquished his 100% ownership of the business. Now he is the major shareholder, with managing director Tony Birbeck and finance director Richard Davis owning the second largest stakes, and the other five directors holding smaller stakes. Birbeck and Davis are earmarked to run the firm one day, but Michael appears to have no plans to quit. It seems that Prater (Ltd) and Prater (Michael) will continue to grow old together for a while longer yet.

My favourite things

Blowup, a film directed by Michelangelo Antonioni in 1966: 鈥淭hat was my era, the sixties 鈥︹��
Chelsea FC 鈥淢y father took me to my first Chelsea game when I was five.鈥�
Skiing 鈥淚 go at least once a year. In March I鈥檒l be in Les Gets, near Geneva.鈥�
Birdwatching 鈥淚鈥檓 a bit of a twitcher. I鈥檝e got a house in Suffolk and I love to go for long walks.鈥�
Family He has a wife, two daughters and six grandchildren