Sunday, April 09, 2006

Persimmon's Master Builder

First, the good news. Duncan Davidson, chairman and founder of Persimmon, Britain's biggest housebuilder, has agreed to give the first personal interview in his 40-year career.

Beneath the corporate bricks and mortar lie the foundations of a fascinating life. Davidson is the grandson of the 15th Duke of Norfolk and, aged nine, he was a pageboy at the Queen's coronation; at 18, after a downturn in his fortunes, he was a labourer digging the Blackwall Tunnel. Now he's not only a phenomenally successful businessman, he is also a landowner farming some 20,000 acres in Northumberland.

The less good news: he prefers to talk about housebuilding than himself. But a round of Bloody Marys, a bottle of Burgundy, half a dozen native oysters, Dover sole and a shared bowl of raspberries later, it doesn't quite turn out that way. ("Are we having a starter?" I'd asked, unsure how much time we had. "Yes. We. Definitely. Are," Davidson replied, emphatically.)

We meet, at his suggestion, at the Turf Club before proceeding to Wilton's - perfect backdrops for a City grandee who named Persimmon after a fabled Derby winner. We cover the housebuilding landscape according to Persimmon, which Davidson founded 32 years ago. To his delight, in December it became the first pure housebuilder to enter the FTSE100.

But we cover acres of personal ground, too, about which he has until now been bashfully silent: Davidson's expulsion from Ampleforth, the Catholic boarding school, just before his A-levels for running the school bookie ("I'd got away with it for two years by then," he boasts) and the admission that he was fired from George Wimpey as a trainee - his first job in the building sector - for sneaking off to the races without permission.

In the end he even recalls how he stood on the Buckingham Palace balcony, watching the four-mile Coronation procession in the sheeting rain.

"The service was three hours long - unbelievable. We had to stand quite a lot of the time. Princess Anne and Prince Charles were up in the gallery with the Queen Mother. I don't think I twigged it at the time, but in retrospect I felt very sorry for the Queen. She was only 27 and quite beautiful."

Initially he claimed he couldn't remember the Coronation "because it was 55 years ago, dammit". I wasn't buying that. Davidson has already proved that his mind is a well-organised mental filing cabinet, from which he effortlessly plucks decades-worth of names, dates, or the cost of his first plot of land.

Ryedale Homes, the first company he founded, paid £2,000 for two acres in Yorkshire on which eight three-bedroom houses were built. They sold for about £6,000 each, making the first in a series of tidy profits.

He set up Ryedale in 1965 with no assets apart from the "arrogance of youth" and the belief that he could make a better fist of running a housebuilder than Wimpey. He had to borrow £10,000 from a trust belonging to his then fiancee, Sarah, now his wife of 40 years.

Seven years later, having paid her back, he sold the business for £1m. He owned 60 per cent; a friend, now dead, owned the remainder. The following year, Davidson set up Persimmon. It floated in 1985, has gobbled up rival businesses such as Ideal Homes, Beazer and Westbury, and last year made record profits of £495.4m.

"So you see, I've worked for myself since 1965," he bellows. None of that guff, I note, about "working for the shareholders". Davidson roars with laughter at the very thought. "I am a shareholder," he points out. He still owns six per cent of Persimmon, worth around £250m, having previously sold shares to buy more land for his cattle, sheep and corn in the Cheviots. "I needed the money, you see," he says.

The need for money has driven him all his life even though his mother, née Lady Mary Rachel Fitzalan-Howard, was the daughter of the 15th Duke of Norfolk. The duke's responsibilities include arranging state occasions, which explains why the nine-year-old Davidson found himself attending the Queen. The loot, though, went down the male line, to his cousins. "What do they call it? Primogeniture. Well, that really worked in my mother's family," Davidson says.

And so at Ampleforth he also set up a barbed-wire business. "In 1956 it was rather rare. I used to buy in bulk and sell it to the local farmers." His spell as a labourer on the Blackwall Tunnel and his decision to leave the army after four years to become a housebuilder are simply explained. "I needed to make some money."

Persimmon has a land bank of 78,000 plots, about two-thirds of which are brownfield sites. It will build nearly 17,000 homes in the UK next year, angering those who fear the country will soon be under concrete. Does he feel like a villain?

"I get pretty irritated with people who say, 'Oh, it's awful, Persimmon are building on a greenfield site.' If we weren't building, Barratt or Wimpey would be because it's not us who decides. It's the planning authority, and that's what people won't get into their heads. Planners often come to us and say that they want a piece of land developed."

Still, he complains that planning is ludicrously complicated. "Prescott says he's going to build x trillion houses. It's all very well him saying that but it's the local planning authority that gives consent or not. Then the decision often gets 'called in' by government and it gets bloody knocked on the head. Prescott's in charge of something he can't have much impact on. That's probably why Blair put him there."

But do we need all these new houses? Davidson gazes at me through his oversized specs. "You've heard of Nimbys, but have you heard the phrase 'Banana'? I've been credited with inventing it. 'Build Absolutely Nothing Anywhere Near Anybody'."

He has no truck with bananas. "There is huge demand for new houses. There are about 23m homes in this country and we're building perhaps 170,000 new homes a year. That means it will take 150 years just to replace existing very old stock."

But that's to presuppose that it needs replacing. "Look, I'm not talking about the West End of London," he says, impatiently. "I'm talking the outskirts of Manchester, Birmingham, Liverpool, Newcastle, Glasgow, Edinburgh, all the big cities. There are thousands of houses that really do need replacing."

What's more, he says, we're increasingly aspirational. No signs here that the housing market might be softening. "There's always someone having a baby, getting married, getting a new job. The first thing they think is, 'I've been living in this slightly crummy Barratt home for five years and now I can afford to buy a bigger, better Persimmon home.' And why shouldn't they?"

Davidson has brought up four daughters in a historic Northumbrian house near Wooler which he bought with the proceeds of the Ryedale sale. He never knew his father, who was killed in action when Davidson was two.

Davidson himself spent four years in tanks with the Royal Scots Greys after school, "in lieu of anything else to do". It was the beginning of his love affair with the north of England. He talks of the East Riding and Cumberland, mocking the modern "Cumb-ree-yah". His grandmother lived in Yorkshire and Davidson would often stay with her. His wife is a "Yorkshire lass", and Persimmon's headquarters are in York.

From next month, he will be spending more time in the north. He is stepping down as executive chairman to become life president of Persimmon. Its chief executive, John White, will become chairman.

Equipped with a new hip, Davidson has fresh money-making plans. He plans to start rearing his own rams, or 'tups' as the young animals are known in the Borders, and sell them at the Kelso Tup Sale in September. It is the biggest such sale in Europe, and Davidson loves it.

"I wouldn't miss it for the world. People come down from the hills who probably haven't seen a Tarmac road for 11 months.

"The plan is that we won't have to buy tups because I'll be selling them instead. I won't be writing a cheque but coming back with one. Of course, it may not work and we'll make nothing." Given Davidson's record, I fancy, he'll make sure it does.


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