Alcock taking advice on board

As managing director of one of Western Australia’s largest private companies, Dale Alcock provides a good barometer for business conditions in the state.

After guiding ABN Group through a five-year downturn in housing construction activity, he has been hit by a suddenly overheated industry struggling to cope with too much stimulus from the state and federal governments.

“It’s like two grenades of sugar hit our industry and it went nuts,” Mr Alcock told Business News.

“It’s the most difficult, constrained market I’ve experienced.”

Mr Alcock navigates this challenge from ABN Group’s new headquarters in Leederville, a major investment that has brought together 900 staff from multiple subsidiaries into one location.

He has also been working on plans for a board of directors at ABN Group.

And for good measure, he continues as president of the Fremantle Dockers and lead investor in an international motor racing team.

Mr Alcock clearly has a lot on his plate but seems to manage it all efficiently.

The biggest challenge he currently faces is the overheated housing construction market.

ABN Group data shows the state of the industry.

Its residential housing starts in WA have doubled in the past year, to 3,030.

That is close to the peak levels experienced during the last boom, in 2015, when WA was experiencing rapid population growth.

ABN’s residential housing starts in Victoria have also grown strongly, up 28 per cent to 2,195.

In total, its housing starts have grown by 62 per cent to 5,225 for the year to June 2021. ABN’s WA data suggests it has increased market share over the past year.

The doubling of its housing starts meant it outstripped the industry-wide growth of 70 per cent, according to the Housing Industry Forecasting Group (HIFG).

The release next month of detailed data will provide more insight into how ABN’s growth compared to long-time leader BGC and other big players such as Silvestro Building Group, Scott Park Group, JWH Group, and Summit Homes Group.

While the volume of housing starts spiked last year, that for building activity is expected to fall substantially in coming years, though the pace of that fall is unclear.

Considering the rapid pace of change in the sector, the HIFG has hedged its bets.

It says housing commencements will fall from 23,000 in 2020-21 to between 17,000 and 21,000 over the next two years.

WA Treasury’s latest economic forecasts also highlight the boom-bust outlook for the sector.

It expects dwelling investment – which lags dwelling commencements – to jump by 27 per cent in the current financial year before falling by 22 per cent next year.

Mr Alcock is concerned about the fallout from the current boom.

“Our industry has a low barrier to entry,” he said.

“You see that at its worst in busy times.”

Mr Alcock said new entrants had ridden the wave but he was anxious about their ability to deliver on fixed-price contracts during a period of tight supply of materials and rising costs.

“There is a lot of desperation in our industry.”

The recent collapse of large and experienced construction companies such as Pindan and Jaxon showed that these risks extend beyond small home builders.

Mr Alcock sheets home much of the blame to principals who push builders to compete on price.

“The government is the biggest principal,” he said.

“There is a need for government to understand that it shouldn’t just be the cheapest price that wins.”

ABN Group's new headquarters is home to 900 staff and a 1,200sqm showroom.

Mr Alcock’s wariness is reflected in the measured strategy of ABN Group’s commercial construction arm, PACT Construction, which targets projects worth between $10 million and $80 million

“We are a leading tier two commercial construction company,” he said. “We are unapologetically being selective about the work we take on.”

Mr Alcock said PACT had no intention of trying to become the next tier one construction company in WA: an ambition that had led to multiple companies coming unstuck as they tried to unseat long-time market leader Multiplex.

PACT tenders for some projects but Mr Alcock sees that as a race to the bottom.

It prefers to engage early with principals and develop projects together or work on the group’s own projects.

It built ABN Group’s new headquarters in Leederville and is currently working on the $50 million Noma Residences apartment project in Mosman Park for sister company Parcel Property.

It is also building apartment projects for developers including Norup + Wilson, Mustera Property Group, and Hesperia.

Career path

Mr Alcock’s is a classic story of a tradie turned business owner.

He is a third-generation builder who started off as an apprentice bricklayer in 1979 in the Wheatbelt town of Kellerberrin.

He credits his father with teaching him practical skills on the job as well as the tactical knowledge and experience that has served him well in his career.

Mr Alcock moved to Perth in the early 1980s and became a registered builder.

In 1987, at the age of 25, he launched Dale Alcock Homes with backing from Garry Brown-Neaves and John Webb, who had been in business together since the 1970s.

Their combined interests morphed into ABN Group, which is comprised of 20 companies.

It has seven residential housing brands in WA, including Celebration Homes, Dale Alcock Homes, Homebuyers Centre, and Webb & Brown-Neaves.

The group includes mortgage broker Resolve Finance and lender Resolve Home Loans.

Its commercial operations include PACT Construction, developer Parcel Property and Dale Alcock Projects, which focuses on medium-density infill developments, retirement villages and childcare centres.

The group expanded into Victoria in 2006 with the launch of Boutique Homes.

That business is led by managing director Aidan Hooper, who is a partner in Boutique Homes and Homebuyers Centre Victoria.

Mr Alcock bought Mr Webb’s stake in the group in 1989 and moved to sole ownership in 2016 when he bought out Mr Brown-Neaves’ share.

As managing director, he is supported by a team that includes chief executive Andrew Roberts and chief financial officer Jeff Miller.

The team also includes executive general manager property, Andrew Auret.

As well as the property development functions of ABN Group, Mr Auret oversees the property investment portfolio of the Alcock Family Office.

In this capacity, he holds project board roles with external developers including Satterley, Qube and Peet.

Board moves

ABN Group is about to embark on a major step with the establishment of an advisory board.

Mr Alcock said the first non-executive director would join shortly, followed by a second in about six months.

“We’re in the process now,” he said.

“We all agree it’s good to be challenged by some external people.

“We will move to a full-blown board over two years.”

Mr Alcock said the establishment of a more formal governance structure would send a signal about the standing of the group, which had about 1,800 direct staff and more than 2,000 contractors and suppliers.

It was also a transitional step for his own career.

“I can see a pathway to executive chairman and chairman,” Mr Alcock said.

Dockers experience

Mr Alcock has already gained substantial boardroom experience – and learned about dealing with challenges – at the Fremantle Dockers.

He joined the Dockers board in 2011, in time to see the club reach its only grand final in 2013.

By the time he became president in 2016, the club’s on-field fortunes were waning.

Mr Alcock then oversaw the tumult of 2019, when the club had to replace both its head coach and chief executive in rapid succession.

In guiding the Dockers, Mr Alcock can draw on the counsel of his fellow directors.

They include Minderoo Group director Tony Grist, Monadelphous Group director Sue Murphy, former KPMG partner and Perenti Group director Andrea Hall, and Australian Finance Group director Craig Carter.

The board’s strong commercial flavour is reflected in the way Mr Alcock has approached the task of guiding the club.

“Culturally it is a very different place,” he said.

“It has to feel like one of my businesses.”

This includes attributes such as its values and culture, the capacity for people to work together and, most importantly, the drive to be extremely competitive.

“I want to win in my business, and I want to win in sport,” Mr Alcock told Business News.

Mr Alcock’s term as president has two more years to run, and like all Dockers fans he is hoping for much more on-field success during that period.

“I’m a member and supporter first and foremost,” he said.

“I’ve ridden the same journey as everyone else.”

New headquarters

ABN Group’s growth into one of WA’s largest private companies is reflected in the recent opening of its headquarters in Leederville.

“That indicates the scale and longevity of the group,” Mr Alcock said.

His personal brand is integrally tied up with ABN Group, in contrast to many other building companies, where the public has no idea of who sits behind the brands.

As well as being home to 900 staff, the 9,400 square metre Leederville project incorporates a ground floor retail showroom.

The influx of people (staff and customers) has been a boon for hospitality businesses in the area.

“We are part of an urban village here,” Mr Alcock said.

The location has brought with it some challenges, notably access and parking.

The building has 200 parking bays, not enough for everyone.

Mr Alcock believes staff have adapted, with many using public transport and others getting dropped off in the morning by their partner and using a rideshare service to get home.

To help customers who visit the showroom, ABN picks up the rideshare fee.

The showroom, known as the Home Collective, provides a place where customers can do everything from look at kitchen designs and bathroom taps to discuss building and finance options.

ABN’s move follows a similar investment by WA’s largest home builder, BGC Australia.

The privately owned group merged its residential construction operations under the BGC Housing Group banner and moved into a new headquarters in Osborne Park.

The new headquarters consolidated eight different offices and includes a 1,000sqm showroom.

Mr Alcock insists ABN has carved out its own path, rather than trying to match others.

“We need to be cognisant of our competitors, but we focus on what we can control,” he said.

Labour shortages

One of the main challenges facing ABN Group is the supply-side shortages in the building industry for both labour and materials.

A recent survey by the Master Builders Association of WA highlighted the scale of the problem.

It found that 90 per cent of members were currently experiencing timber supply issues, while 94 per cent were experiencing timber price increases.

Mr Alcock has been encouraging the WA government to allow increased harvesting of pine plantations to help deal with the short-term supply problems.

He said international supplies had dried up as demand from the US increased.

“I’ve heard stories of containers being on ships on their way to Australia and they have been diverted to the US because they paid more,” Mr Alcock said.

Concern around material supplies pales next to the problem of labour shortages, however.

“Clearly that is the biggest one,” Mr Alcock said.

ABN is stepping up its apprenticeship programs to deal with the problem.

Since establishing its own dedicated apprenticeship program in 2004, ABN Group has been the state’s largest private construction training group.

The number of apprentices in training fell from a peak of 200 around 2013 to a low of 55 in 2019, reflecting the lull in building activity.

The number has increased to 110 and Mr Alcock is aiming to get back to 150.

This includes a growing number of women and, for the first time, a focus on Aboriginal recruits.

The group has started with a handful of Aboriginal apprentices and is aiming for about 15 by the middle of next year.

“It’s the right thing to do, it creates an opportunity, and it’s also a potential source of labour that needs to be tapped,” Mr Alcock said.

“We need all the taps turned on.” He recognises that many of his tradies will be tempted by the big dollars offered in the mining industry and in fly-in, fly-out roles.

“We can’t compete on the dollars, but we can compete on how we treat our people,” he said.

Mr Alcock also defends bricklayers from charges that they are jacking up their rates unreasonably.

“You can’t blame the brickies, it’s the builders that are bidding up how much we pay,” he said.

Charity support

Mr Alcock sees some overlap between his commercial activities and his philanthropic giving.

Since 2006, ABN Group has donated more than $9.5 million to various charities and causes.

Major beneficiaries have included the Salvation Army, the Art Gallery of WA, St John of God’s comprehensive cancer centre, Nulsen Disability Services, The Esther Foundation and Carbon Neutral.

Many of these donations are through the Alcock Family Foundation, which typically distributes about $300,000 per year, according to annual reports lodged with the industry regulator.

The beneficiaries have also included Fairbridge WA and the Clontarf Foundation, the latter established by inaugural Dockers coach Gerard Neesham.

Both groups focus on youth development, with the Clontarf Foundation using sporting programs to support Aboriginal teenagers.

“That needs to be an ongoing part of our program,” Mr Alcock said.

Dale Alcock is the lead investor in aspiring Formula 1 driver Calan Williams' racing team.

The pet project

As well as running ABN Group and being president of the Fremantle Dockers, Mr Alcock loves to discuss what he calls his pet project.

He is the ‘lead investor’ in motor racing driver Calan Williams and keen to encourage others to join the cause.

Aged just 21, Williams has been racing full time in Europe for the past four years and hopes to become a Formula 1 driver, alongside another Perth product, Daniel Ricciardo.

“We could have two F1 drivers from Perth,” Mr Alcock said.

“What does that do for the state?

“There is a bit of magic there if we get it right.”

Williams has spent the past year racing in the FIA Formula 3 championship and is aiming to move up to Formula 2 next season.

To compete at this level, each driver needs to raise more than $1 million per year.

While many of his competitors come from wealthy families, Williams does not have that kind of backing.

His father runs a not-for-profit charity in Perth and his mother is a TAFE lecturer, so they need sponsors and investors.

Mr Alcock smiles when he recalls his initial decision to invest five years ago.

He was one of many people who got a letter from Williams but, unlike most others, he made the ‘mistake’ of writing back and politely declining.

That was all it took for Williams and his father to try again, eventually winning the businessman over.

“He’s a young Perth kid with that much talent and energy, he deserves support,” Mr Alcock said.

“He hasn’t put a foot wrong and is an outstanding character.”

The payday for Williams, and the investors who have backed him, will come if he makes it to Formula 1.

Under a unique investment program, investors get a share of Williams’ income over the first 10 years he races in Formula 1.

The enterprise is overseen by a board that is chaired by experienced business executive Bill Munro and has so far attracted about 20 investors.

Others include financial adviser Troy MacMillan, iron ore heiress Leonie Baldock and her husband, Tim Baldock.