Stuart Marshall, group FD of Story Homes, gives his views on the year ahead
What have been the biggest challenges for your business over the past year, and what role did finance play in addressing them?
The pace of Story Homes’ growth over the past five years has been rapid – turnover has grown 670%, with a further 44% expected this year. This creates challenges around people, culture and systems, as well as our supply chain. To support the speed of growth, new financial systems were implemented during the year, all cloud-based, in order to facilitate future expansion. This included a suite of end-to-end operational apps which will reduce processing cost and keep more information online, increasing efficiency.
The Story Homes people strategy plays a fundamental part in protecting the quality of the brand and our cultural values. We’ve recruited for a number of key financial roles over the past year and have been very careful to hire people not only for their technical ability but because they’re a good cultural fit. We’ve also recruited with an eye to their future roles in a far larger business.
The finance department has been instrumental in securing a £65m long-term facility with Lloyds Bank to underpin our continued expansion with an ambition to be a national housebuilder within five years. In the middle of this refinance, Brits voted to leave the EU, which was an additional and unexpected challenge to handle. Working closely with our bankers, I’m pleased to say that we were successful and secured very flexible, well-priced facilities.
What are the key political and economic risks/opportunities you face in the year ahead?
Although it was encouraging to read the latest GDP growth rate of 0.5% over the quarter since the Brexit vote and the recently announced 14-year-high retail score – which are the latest in a series of recent positive UK Plc announcements – we’re going to remain in a period of uncertainty as the UK negotiations progress with the EU. As such, Story Homes will be closely monitoring internal and external business measures, but at present our growth plans reflect confidence in our position.
Which capex projects will you be focusing on in 2017, and how will these be financed?
Story Homes’ business strategy includes continued investment in premium, cloud-based IT systems in those areas that can demonstrate a tangible benefit to the organisation.
Part of our focus for 2017 will be consolidation, following the implementation of business-wide ERP and CRM systems during 2016. We’re conscious that we need to provide training and support to our staff to ensure they are confident using these systems and will utilise them to their full potential. 2017 will see further significant investment in data warehousing, which will help transform our business reporting and analysis capabilities.
How do you expect the balance of your role to change in the coming year; between compliance and forward-looking/strategic? And why?
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Compliance serves an important purpose within the group function of our business. We regionalised into one group function and three geographical areas in 2016, supported by a new operational framework.
We were careful to ensure that the compliance elements of devolved authority and responsibility do not shackle the entrepreneurial spirit and quick decision-making that have always been bedrocks of our business. So, from a compliance perspective, we will continue to check procedures and implement controls, but this goes hand in hand with ensuring those controls serve a proper commercial purpose, rather than being an apology for poor management (which is sometimes the case!).
The forward-looking and strategic element of my role as financial director is the most important and I spend a lot of time planning ahead, especially now as we’re in a rapidly expanding business environment. With our ambitious growth plans in mind, I need to continually look to the future, anticipate and manage opportunity, risks and challenges, and plan contingency.
Advice for other FDs for the coming year?
It’s going to be interesting with Brexit continuing to shape the political debate, leading to ongoing uncertainty. I’ll be focusing closely on the external climate as much as the internal and considering the impact on our business carefully.