A talk by Tony Pidgley, Managing Director of Berkeley Homes at the Surrey Chambers of Commerce meeting held in Guildford on Thursday (13th May 2009).
His philosophy of having high moral and business standards shines like a beacon in this present time.
1. Moral and Business standards – leaders lead (to set the example) and others follow
2. Working to a set of indicators and not the emotion of the market – house price rise of the past several years – this was caused by house price inflation and not by good work. All bubbles crash. This has made the price of land for new developments expensive. Berkeley Homes has returned to the Home Counties after 10 years; for example: just bought a development plot for £1.7 million; this was previously purchased for £7.0 million at the top of the market.
3. Berkeley Homes have a good reputation; purchasers know of the quality and the space of their products. 4. Berkeley have a substantial cash reserve £350 million, sufficient to ride the storm and will re-start building when the conditions are right.
Opinion: The Berkeley Homes have followed these guidelines since its inception in 1976 and it is still trading very successfully indeed. It has gone through at least 3 cycles of boom and bust. This is a very simple formula for success and used in a similar manner by Warren Buffett in his management of Berkshire Hathaway. Warren Buffett is the world most successful investor who is worth more than US $37billion.