Business Hub: At home with Signature’s Gavin Hunt – ‘We’ve built more than 10,000 homes’

An Auckland couple are the owners of a housebuilder which has completed some 10,000 New Zealand homes.

But despite being the longtime owners of the master franchise for Signature Homes – and despite the current political focus on housing – Anneta and Gavin Hunt don’t have a high profile outside the industry.

That may be explained by the fact that Gavin Hunt isn’t media-hungry, although he does appear on the nation’s TV screens when he personally introduces each episode of Coronation Street, and says his company is proud to sponsor the show – part of a larger package with TVNZ 1.

The former Bay of Plenty carpenter lives in Auckland, is aged 70 and is recovering from cancer. He celebrated his big birthday during Auckland’s 107-day lockdown late last year, and one of the highlights of the low-key home party was friends beaming messages in remotely.

The building industry has become higher-profile in recent years, with strong demand for new housing due to critical shortages.

And few companies have played a bigger role in meeting that demand than Signature Homes. Based on revenue, the company is second only to G.J. Gardner.

In the year to November, Signature brought in $263 million in revenue. That was behind G.J. Gardner’s $769m but well ahead of Williams Corporation’s $112m, Mike Greer’s $188m and Classic Builders’ $256m.

In terms of the number of places built, G.J. Gardner ranks first, with 1689 homes, andWilliams is the second-busiest residential builder, completing 776 homes.

Some in the industry have bristled at Williams – run by two 28-year-olds – saying they are the busiest non-franchised, privately-owned NZ housebuilder.

But that claim is correct, according to BCI Central, which tracks housebuilders by many measures including revenue, the number of houses built, their area and dollar values.

However Hunt says revenue is the most important measure used by corporates, so that’s the test that should also be applied when ranking residential builders, much as it is with NZX-listed companies.

It’s by that measure that Signature does so well: its average home value is $451,000 compared with Williams’ $145,000, making Signature’s revenue so much greater.

Neither of those figures includes the land, only the homes. The value is so low for Williams because that developer’s places are small,either townhouses or apartments, compared to Signature’s often stand-alone, larger family-style homes.

“The Signature model is that we have fewer franchises operating than most of our main competitors in New Zealand,” Hunt says.

“We prefer to have fewer [but] the more robust businesses. We’ve got 14 franchises – four in the South Island, 10 in the North Island. We’re New Zealand’s second-biggest home builder,” he says, not specifically naming G.J. Gardner but indirectly referring to that franchised business.

Hunt’s numbers are based on that revenue figure, “somewhere between second and fifth, it varies between months, based on revenue”.

Right now, he says, the biggest challenge for Signature’s franchisees is getting land, “which makes it hard to put together those house and land packages, which is so much easier for young couples to buy”.

The business has significant design and build capabilities but Hunt says in the past six years, house and land packages have dominated.

The biggest trend he has seen lately is rising demand for smaller sections and smaller homes, which have become more popular thanks to land prices rising so sharply.

On top of the problem in getting land, he’s worried by forecasts of the pandemic causing widespread illness in the near future and many people being away from work.

“Omicron certainly isn’t going to help, just purely from people being off work – truck drivers, factory people, etc and also our sub-trades.”

When he started out, says Hunt, “I was a hippy surfer from Tauranga”. After attending Otumoetai College until 1968, he began work as a labour-only carpenter.

He worked for the Bay of Plenty-founded Beazley Homes when that was owned by Fletcher Holdings.

In the 1970s, Beazley was building and exporting relocatable homes and other buildings, so Hunt travelled extensively.

That meant he was in the right place to buy Fletcher’s interest in Signature, founded about 40 years ago, and then expand the business. He well remembers titans of the business including the late Sir Ron Trotter and Hugh Fletcher. At the time when it was established, Signature built exclusively solid wood homes, a style in vogue at that time.

“In 1983 I was transferred from Fletcher Construction’s overseas division to what was then known as Fletcher Residential to manage a new housing company they were launching, Signature Homes. In 1990, I purchased a 50 per cent share in the South Auckland franchise for Signature Homes, Lasque Construction, and managed that business.

“In 1994, with our partner in Lasque who was Keith Day, my wife and I via a family trust entered a 50/50 joint venture with Fletcher Residential to jointly manage the Signature Homes business.

“In 1995, we bought Fletcher’s half share in Signature Homes and brought in a friend, Martin Beadle, to manage the national business of Signature Homes. Each family then held 33.33 per cent of Signature,” he says.

Around 1998, the Hunts and Beadles bought Keith Day’s share, giving the pair a half stake each. “In 2000, we purchased the Beadles’ share. We then owned 100 per cent of Signature Homes,” Hunt recalls.

All these years later, he notes its achievement: “We would have built more than 10,000 houses.”

Daughter Portia Lawrence is the national business development manager and a nephew, Keir Bettley, owns the Hamilton franchise with Andrew and Jamie Buttimore.

For some time, TKR Homes whose work includes the fast-expanding Rolleston area near Christchurch, has been Signature’s busiest franchise business. But now Hunt says Signature’s Auckland-based medium-density work outstrips that, having won Kāinga Ora contracts.

Although the national business has a CEO, Paul Bull, Hunt remains active.

His main daily activity is spent on Signature Homes, Signature Residential on the North Shore and at Rodney, Signature Construction and Signature Developments.

“Signature Developments does early child centres and light commercial work. It’s not franchised. We also have Giraffe Scaffolding and my youngest son and his partner run it,” he says, referring to James Hunt.

Another string to Hunt’s bow is the cloud-based, US-headquartered IT business Actionstep Software, which provides software for law firms, among other clients.

Not all has gone well for Signature, resulting in some court action and, says Hunt, “some bad memories”.

He’s no huge fan of offsite, modular or kitset home production, although he notes some components in traditional housebuilding such as trusses are now pre-made. “so there is a degree of pre-manufacture. But having a factory … it’s great but the moment you don’t have the orders, you still have the big costs yet nothing going through the factory. Volume is the absolute key,” he says of modular, kit or offsite homebuilding.

Signature has taken franchisees to Pacific Islands, Bali and Saigon in the past few years and holds separate annual staff conferences, inviting high-profile speakers such as ex-Air New Zealand chief executive Rob Fyfe.

But for Hunt, the significant achievements are the scale of the business, the franchisees’ success and having family involvement.

Source: Read Full Article