Back in business - The Journal 05/11/2004

There was something out of the ordinary about that caller who delivered a bottle of celebratory champagne as Dean Allen and Sarah Dean were settling into their new house ( he was as overjoyed as they were.

Later they learned he too had every reason to pop a cork on their Greenside doorstep. He was multi-millionaire Peter Cussins, back in the housebuilding business for which he was earlier renowned.

The entire development there sold within a month. By then, Peter and his comeback firm PIC Homes (now Cussins Ltd) were developing another 28 properties at Wallsend.

It is now more than 30 years since Peter entered the industry. Formerly an economist with Hawtin and Partners merchant bank, he decided at 22 to switch to his father Philip's line of business. Philip had been a builder in Newcastle since 1922.

When a heart attack compelled him to retire, Hawtin bought his business, Cussins Contractors, then sold it to Teesside housebuilder Moore & Cartwright. Philip later joined the board of son Peter's maiden company, Lemmington.

In 1974 a doubling of oil prices ended Britain's post-war housing boom. But Lemmington sub-contracted extensively and, by 1977, was earning profits of pounds 31,000 building houses, sheltered accommodation and commercial property. It also had a portfolio of investments.

This was the precursor of Cussins Property Group which floated on the stock market in 1981 and made Peter the North-East's newest millionaire. His personal and family stake was just over pounds 3m. Local public-sector pension funds were among 15 City institutions that bought around 75pc of the 1.4m shares.

The group, employing 130, had sales nearing pounds 4m and pre-tax profits of pounds 470,000. Peter was feted for running such a vigorous share-quoted enterprise at 32, and building it from scratch in 10 years to a point where profits approached those of benchmark builders Bellway and Leech.

Profits reached pounds 1.25m in 1982, and pounds 1.3m the following year, while rivals struggled. In three consecutive years of further recession, Cussins' profits advanced.

The Journal's City editor then speculated that Cussins was arguably the most exciting small housebuilding company in Britain and might become the next Barratt.

The fewer than 400 shareholders who had a stake saw Cussins more than double in market value in 18 months, to pounds 9.7m.

Any large land bank was avoided, and the group built houses mainly in the North-East, enjoying good profit margins.

Unlike volume builders constructing houses in their thousands for first-time buyers, Cussins erected perhaps 200 homes a year for second or third-time buyers.

Peter's stake in the firm by mid-1983, was pounds 4.58m. Cussins in 1984 opened a London office.

Its many commercial developments ranged from a London shopping centre at Peckham ( where Peter's faithful Geordie following of artisans camped on site for 18 months ( to offices in Edinburgh New Town's Queen Street development.

Here, his many landmarks include the Derwent Shopping Centre that followed the Consett steelworks closure, the Denmark Shopping Centre in South Shields, at the mouth of the Tyne River and commercial developments around the BBC's `pink palace' at Fenham in Newcastle.

Peter, like his father, upheld standards of workmanship by giving unbroken employment, instead of pay-off at the earliest opportunity. When he became North-East Businessman of the Year at 34 ( when other finalists included John Hall and Peter Vardy, who would both later win the title ( Peter saw the award as "a tremendous boost for the men on the sites".

Shares valued at 82p each on flotation touched 260p then. The judges said: "The ability to earn profit through good and bad times is the acid test of business. On that score Peter Cussins was chosen."

But by the early 1990s, City attitudes had changed as property slumped in the South-East.

Now big institutional investors like the pension funds went for quick returns on large investments, rather than a varied spread to include steady returns from smaller firms too.

Dotcom and other hi-tech wonders siphoned vast sums. Investment in conventional activities became harder to attract.

When Miller Homes of Edinburgh, Britain's biggest privately owned housebuilder, bid for Cussins in 1999, Peter was not overjoyed. But shareholder interests came first.

Miller's pounds 24m offer was accepted. After all, it too represented quality, and needed a housing foothold in the North-East, where it had already excelled helping to regenerate Newcastle's Quayside


About 15,000 Cussins homes had been built throughout the region by then. Peter took his six months' "gardening leave" determined to be back among the bricks and mortar soon, then relaunched, initially with PIC Homes.

His fellow directors included trusted colleagues from the earlier Cussins venture.

Besides the Greenside development, PIC Homes built a pounds 7m development near Peter's home at Belsay in Northumberland. A joint venture was also formed with Adamson Developments (another regional firm), called Regent Homes. Last year, PIC Homes became Cussins Ltd; the more familiar name returned to the signboards with Miller Group's agreement. Now Cussins has six sites under way at North Shields, Wallsend and Peterlee, and the continuing link with Regent Homes has led to 100 apartments for Royal Quays, North Shields and the Turrets development at Gosforth.

Son Jabin is now following his father's footsteps, just as Peter had followed his father. With house sales at the market's top end starting to slow now, Cussins Ltd will concentrate on the lower end of the market and also consider commercial development. Despite his earlier City disappointment, Peter does not rule out another flotation. He explains: "The wheel is full circle where investor interest in smaller builders is concerned.

"Investors are especially looking with favour on some smaller firms on the Alternative Investment Market. Smaller builders have enjoyed a very strong market since 2000 and are not ignored as before.

"We are still building our company, but have been very successful over two years and have a good programme ahead. If, sometime, a place on the AIM looked right, we would not be against that."

Cussins Ltd now employs about 40 operatives with a similar number of "subbies". It hires its professional and administrative services.

The revived Cussins name appeared on homes overlooking the village green at Winlaton Mill, and Georgian-style houses and apartments at North Shields ( Cussins' fourth development in less than 18 months.

The return of Peter Cussins is widening buyers' options once more.