Welsh house builder looks to alternative partnerships as framework agreements fail to make ‘commercial sense’

As income for the contracts is fixed, Anwyl said that build cost price increases had led to it experiencing “a significant adverse effect”.

Anwyl Partnerships reported a 39% decrease in turnover due to four out of its eight framework schemes with housing associations coming to their final build stages.

Anwyl said it had reviewed the risks and decided in June 2022 “not to enter into any new contracts with housing associations”, instead concentrating on current contracts with clients.

Phil Dolan, chief operating officer at Anwyl Homes, told Inside Housing: “A significant rise in interest rates and volatile build costs meant that bidding for future works under such framework agreements, with already very tight margins, did not make commercial sense.”

He added: “All existing agreements and obligations have been fulfilled. While the board made a strategic decision not to pursue any further framework agreements, Anwyl Homes is fully committed to developing affordable homes as part of their housing market led schemes via Section 106 agreements.

“They are also looking at joint venture agreements and strategic partnership arrangements with both English and Welsh registered providers to deliver additional mixed tenure housing schemes, something the incoming Labour government has high up on the agenda.”

Mr Dolan said Anwyl Homes had agreed terms on several sites and was in conversation with registered providers.

“These will be delivered as 100% affordable or mixed tenure for the registered provider, or with Anwyl Homes taking some sales risk and building an agreed percentage for sale via Anwyl Homes. This is very different than the framework approach and something the business and its management team are fully committed to,” he explained.

Turnover for the financial year to 2024 is expected to fall even further to £9m, as all schemes reach the completion stage.

Group turnover dropped 6.9%, from £218.1m to £203m. Within this, build contracts for the year to September 2023 brought in £21.7m, compared to £35.6m last year.

Operating profit was down 11.7% due to increased material and labour costs, dropping from £20.5m to £18.1m. Post-tax profit was £10.7m, down 28.4% on the previous period.

In the house builder’s homes division, completions were down 16.6% to 636.

Anwyl Group also confirmed it has agreed a new £82.5m revolving credit facility with Lloyds and HSBC that will run to May 2027.

Anwyl is headquartered in Ewloe in Flintshire and operates across North Wales and the North West of England.

In 2021, it was named as one of the contractors in social housing consortium JV North’s £560m construction framework contract.

The four-year framework had a goal of building 4,000 homes.

Also in 2021, Anwyl Partnerships was awarded a 10-year contract with Wales & West Housing. It was named the sole partner for ‘lot one’ developments with the housing association, which are larger schemes totalling £3.5m and above.

At the time, Mike Nevitt, managing director of Anwyl Partnerships, said: “This is an incredibly important partnership and to achieve sole provider status for the larger projects is a fantastic achievement, guaranteeing consistent work programmes with Wales & West Housing for the next decade.”