Last updated 21 February 2023
Avant Homes Group
Avant is one of the UK’s largest privately-owned housebuilders and property developers and sells nearly 2,000 homes a year. The group was founded in 1996 and turns over £600 million a year, sells more than 1,700 homes annually and employs around 700 people.
In April 2021, property company Berkeley De Veer and global fund manager Elliott Investment Management acquired Avant.
Financials
Avant’s finances have been dogged for years by instability, including change of ownership and endemic losses.
In the 62 weeks period to July 2022, revenue rose to £667.0 million (52 weeks to April 2021: £505.0 million) and Avant finally managed a return to profit, registering a pre-tax profit of £17.8 million (2021: £3.1 million loss). At an operating level, profits before the impact of joint ventures and associates rose to £83.2 million (2021: £44.0 million).
In the 12 months to June 2022, revenue at Berkeley De Veer Ltd fell to £13.5 million (2021: £15.0 million) and operating losses leapt to £0.9 million (2021: £0.1 million). Before tax, losses were £1.3 million (2021: £0.7 million).
To view the financials for Avant Homes Holdings, visit Companies House and use Company ID 09304211.
Operations
After years of upheaval, Avant Homes now operates from a headquarters in Chesterfield and seven regional offices across Scotland, the north East of England, Yorkshire and the Midlands.
The group was originally founded by Remo Dipre who after buying Furlong Homes and formed Furlong City, a specialist in inner city regeneration projects that include the £100 million regeneration of Royal Quay at London’s Royal Albert Dock, pursued a strategy of buying regional housebuilders that would prove disastrous.
Acquisitions of regional housebuilders continued during the first decade of the new Millennium right up to 2007 and the £83 million purchase of Yorkshire-based housebuilder Ben Bailey but debts proved hard to sustain.
In September 2009, Terret Residential acquired the company, with a debt and equity capitalisation of £520 million. This deal presaged the departure of Remo Dipre and later that year, Gladedale rebranded and restructured, returning to many of the local brand names for which it was best known, including Bett Homes, Ben Bailey Homes, and C&M Homes, which it acquired over the years.
In November 2013, Gladedale rebranded as Avant but continued to trade through subsidiaries Bett Homes, Ben Bailey and Country & Metropolitan, Gladedale Capital. In December 2014, Avant was acquired by a group of funds managed by Alchemy Special Opportunities, Avenue Capital and Angelo Gordon for £180 million in cash, which included debts of £176.6 million to Lloyds Bank. The group began to trade as Avant Homes with all the previous brands discontinued and in April 2021 the business was acquired by Berkeley De Veer and Elliott.
Major housing schemes being developed by Avant in 2023 include 107 homes on the site of the former St Luke’s Hospital in Huddersfield (Project ID: 19427357) and 247 house sin the Earl’s Park development in Chesterfield (Project ID: 18298044).
In 2022, completions at Avant Homes rose to 2,675 units (2021: 1,921), which included the sale of 334 social housing units (2021: 250 units).
Glenigan Data
In 2022, the newly enlarged Avant/Berkeley De Veer submitted 19 detailed planning applications (2021: 18). These applications contained a total of 3,248 units (2021: 2,526 homes) and the group was ranked in 10th position in Glenigan’s 2022 ranking of the top 50 housebuilders by planning activity (2021: 12th).
Conclusion: Big hurdles ahead
The sale of Avant to a bid from property company Berkeley de Veer with backing of US fund managers Elliott brought to a close years of uncertainty at the UK housebuilder, but the big plans revealed after the takeover have not materialised and questions remain.
Avant’s ambitious plans to become a £1 billion turnover business by 2023 fell short. Although the group did return to trading in the black, this was whittled down significantly by finance expenses, which ballooned by 32% to £48.5 million (2021: £36.6 million) and a £17 million hit to rectify cladding work on high storey buildings in the wake of new building regulations after the Grenfell disaster.
Increased sales of social housing units pushed the overall average selling price down to £282,000 (2021: £287,000). The group’s contracting activities, which generate more risk and are typically lower margin than selling of new homes, have also increased. In 2022, contract revenue was £43.1 million (2021: £26.0 million), while sales of new homes was £623.0 million (2021: £479.3 million).
This has all weighed heavily on the group’s financial position. Cash and cash equivalents fell to £43.4 million (2021: £45.5 million), while total liabilities at Avant Homes Group surged by 23% to £635.6 million (2022: £516.8 million) on net assets of £121.0 million (2021: £95.6 million).
The group has sought to reduce overheads. On announcing the takeover, the workforce was put at 780 people, but has since reduced significantly as the group sought to reduce costs. In 2022, the average number of employees was cut by 6% to 692 people (2021: 734 people) but the wage bill was static at £43.8 million (2021: £43.8 million). The emoluments of the highest paid director however were slashed to £0.5 million (2021: £1.4 million).
The new owners have bankrolled expansion as the management target building 4,000 units a year. With the number of units in the planning pipeline not large enough to meet, will need to also buy ‘oven-friendly’ land and spending on land has increased to £190.1 million (2021: £112.9 million).
Avant’s planning pipeline leapt by 28% in 2022 and the focus, in common with most other major volume housebuilders, is on developing houses. In 2021, 11% of the homes in the enlarged group’s planning pipeline had been apartments but in 2022 all units proposed were some form of house and the size of developments is increasing. In 2022, the average detailed planning submission contained 171 units (2021: 140 units).
Both measures have pushed Avant’s landbank up to 12,600 plots (2021: 6,891 plots), which makes the targets set more achievable but going forward, the group faces significant financial milestones. In 2020, the group took out a £50 million Coronavirus Large Business Interruption Loan and a £200 million bank loan was extended by a year to July 2023. Another key shareholder loan is due to mature in December 2024.
As a heavily indebted business controlled by private equity that will want an exit, Avant is in a precarious position and this will not be helped by an expected weakening of the housing market in 2023.
Winning Work With Avant Homes
Avant employs local contractors and suppliers where possible. The group uses the COINS construction software and has a sustainable procurement policy with separate polices for materials, waste management and timber procurement. Information on Avant’s supply chain can be found here.
Key Avant procurement contacts include:
Procurement Director – Brad Kaspers, tel: 01246-573700
Technical director – Mark Hadfield, tel: 01246-573700