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Stuart Rock interviews Peter Munk, CEO of the UK’s largest static holiday home maker.

SR:You became CEO of Willerby in 2016 and Equistone acquired the company in June 2017. How has your relationship with Equistone evolved?
PM: Equistone invested a lot of time, energy and money in the process. Some of the work they did in their due diligence has been exceptionally valuable for the business subsequently.

The partnership with Equistone has been fantastic. They pressure test our plans and use their experience to challenge and provide feedback. But once we have a plan, they leave it to us to execute and are very supportive.

Equistone team: Richard Briault and Andi Tomkinson

SR: How does that partnership work in practice?
PM: The static caravans business model had been ‘business to business to consumer’ − a manufacturer such as Willerby sells to parks who sell the caravans to the end-user. But the internet has changed that relationship. We had to create a demand-pull from consumers for our products − but in 2016, we had no contact with the consumer and no marketing department. It required different skill sets and substantial investment.

Equistone understood that a well-executed consumer-facing strategy would take the business forward and improve returns.

SR: You have worked in multinational corporations throughout your career. What’s different about working with Equistone?
PM: I have had experience of working in companies where you can be put under great pressure to delay decisions to smooth the quarterly figures. When we set out a fresh investment case for redesigning the factory floor and investing into an ERP system − not negligible sums of money − Equistone’s response was to focus on whether we could deliver on our plans with pace and impact.

SR: Another fresh dynamic was building a relationship with a new chairman. How has that developed?
PM: Equistone introduced me to three candidates. The selection process was really collaborative. Peter Williamson and I have a weekly call and meet monthly. He also spends one-on-one time with members of my management team, which provides us with a good balance for our own discussions − it is good for him to be close to the team.

SR: What is your long-term vision for Willerby, with Equistone as your partner?
PM: Willerby has existed uninterrupted for more than 70 years in Hull and 900 people work here for the company. It employs fathers and sons, uncles and sisters. We are guardians of the Willerby brand for a period and have an enormous responsibility to generate ongoing value; our role is to leave the company in a better state than when we came in. That is what we should be judged on.

SR: What ESG factors are important to Willerby?
PM: Willerby is an important local employer in Hull and, vitally for a manufacturing company, has a tremendous safety record. We are closely involved with our local community, supporting many charity events, and we have a very strong apprenticeship programme. The founder of Willerby originally made beehives, so we provide materials for the local prison to make beehives for local schools.

We have made one of our units on a site in the Lake District available to our staff through a ballot. Not only does it provide a fabulous holiday for families who can’t afford to have a unit of their own, we get great feedback from our employees about our product.

Recently, we saw an opportunity to install an incinerator to burn left-over wood, which we could turn into heat for the factory and therefore make our production process more circular. It breached our agreed cap on capital expenditure and had a longer payback period, but it was the right thing to do. We took it to Equistone and they were very supportive.

SR: What are your growth plans?
PM: We can see the steps to achieving revenues of £200m and EBITDA of up to 15% for our existing business. There are opportunities to develop new business streams.

An adjacent market is bespoke building of residential park homes; with an ageing population there will be demand for many more single-floor dwellings. We have dedicated one of our factories to this. It requires heavy investment − and the sales cycle is much longer − but we believe we can take it to market leadership over a number of years. We have had very detailed and healthy discussions with Equistone about the value creation of this investment.

The other area is the market for modular housing, which is evolving and will accelerate. If we want to fill the housing gap in this country, the future is factory built. It is a market in which we can play, but it is a different strategic area. It will be part of our next investment case.

SR: As a domestically focused business, have you found any benefits from Equistone’s international network?
PM: If there is something within another portfolio company that you think will be of interest, it immediately gets facilitated. We asked to visit Hanse Haus, a German portfolio company that designs and manufactures prefabricated houses. It was interesting and valuable.

A full version of this interview appeared in PLATFORM 03, Winter 2019/20