Simonds Homes: A 70-year family storyline that’s still got a fair way to go!
Spanning three generations of its namesake, delivering more than 45,000 individual homes (and still counting) and sitting among the top five homebuilders in the nation, Simonds Homes is an iconic force within the property industry.
Patriarch of the family, Gary declares that no one is born a volume builder. In his view, it takes “a lot of hard work, dedication and application – and a supportive family”. The recipe may be a little bit more complex than that, but what stands out significantly is his sincerity with regard to family contribution.
Over the past 70 years, Simonds has enjoyed more triumphs than can possibly be retold in a single sitting. Conversely, they’ve gone through numerous hardships too. Through every moment, however, the narrative has been shaped by the concept of family. Theirs, yours and ours.
The story of this inimitable residential builder is interwoven, even from the start, with core family values. Gary Simonds founded the business in 1949 and his first project was to build a home for his mother. Gary’s son, Mark, joined the business in 1976 and Mark’s son, Rhett, joined in 2002.
They are proudly family-oriented, but any notion of nepotism has no foundation to stand on.
Gary has always been a hard worker; being still involved with the business at the age of 85 is a testament to that. He completed his five-year trade apprenticeship by the age of 19, while concurrently completing separate building and staircase courses. It took just a short stint of contract work before he decided to be his own boss. He didn’t just have the knowledge to back himself, he had a tenacity and work ethic that he has since become famous for.
“The first thing that he ever taught me was how to work.” Mark Simonds informed us during a recent conversation the three Simonds men had with Development Ready.
“That doesn’t just mean in a technical or practical sense, but more philosophically – Dad taught me to be a ‘good’ worker.”
Mark had been going to work with Gary since he was in a bassinette. To the office, to sites, to deals, Mark was exposed from an early age and recalls honestly the excitement of joining his father in the field. At the earliest opportunity, Mark started his carpentry apprenticeship.
“I was very fortunate to have a son who was keen to enter the business. At the time, I had a lot of skilled tradesmen, but they were lousy workers. I had a lot of good workers, but they were unskilled in a trade. I wanted to make sure that my son would be extremely proficient in both respects,” Gary recollected.
With the necessary accreditations completed, Mark entered the business side of his family name and together they became a virtually inseparable dynamic duo.
“We’ve been best mates my whole life, side-by-side through it all. We balance each other, contrast each other, push each other further and learn from each other. It’s been good for both of us,” Mark attested.
Under their joint direction, Simonds began taking some big leaps forward. During the week, Gary and Mark built immaculate display homes, and on the weekends, they sold them. As they built more intricate variations, they sold more and more homes. Before they knew it, they had more work than they could cover.
Mark remembers that “we had to bring some agents on to help us sell the stock, which gave us more time to build more display homes. That resulted in more sales, so more work, and we had to start hiring more supervisors. Some of the experienced supervisors that joined us taught us a lot about volume housing. So, we were growing, and learning, and growing, and constantly improving.”
As the number of houses started to increase, operational efficiencies needed to be managed. They started to change their methodology, working under what Mark likes to call the ‘300 Multiple’.
“We used to design ‘300 Centres’ and that’s a direct result of us buying timber in 300 multiples. Even today it’s 3m, 3.3m, 3.9m. No matter what you buy, in the economies of scale, with materials, timber, plaster, etc. it always slots into a 300 multiple. Our houses were very efficient, and it meant that we could leverage that to deliver better products.”
While some things don’t change, others invariably do
Back in 1949, houses were much more simple. There were no built-in-wardrobes, no alfresco, no theatres or special features. They were all weatherboard homes as Gary remembers them.
“The youth of today don’t realise how good they’ve got it!” He joked, “Today you don’t move into a home unless it’s got all the trimmings. That’s a big change from when we first started out and I’m sure homes are going to continue to evolve in the future.
“More than just trimmings, the greatest change I’ve seen is in the size of the block. Years ago, it was common to find blocks around 700sqm. Today if you have a 400sqm block, you’ve got a big block – and the price of land is much more expensive too.”
Understanding the evolving property market is an understated strength of the Simonds family. They’re in-depth knowledge of construction and empathetic comprehension of what home buyers want, were key characteristics that enabled them to construct quality homes with an element of design flare.
The Boy Wonder
Like his father before him, working at Simonds was all Rhett ever wanted to do.
“I finished high school and then decided to go to university to study commerce. At the same time as that however, I was working six-month stints at Simonds, each time in a different department. I wanted to understand the complexities of every sector, from cost accounting, to supervising, to sales and marketing.”
Following the degree, Rhett found his place in the sales and real estate division, where he worked studiously for several years. Fresh eyed and keen to contribute, Rhett decided it was time that Simonds took a step back and view how the industry at large was evolving the sales process. A quick analysis revealed, not at all.
“We noticed that the sector was still being sold in the same way it had been for many years. That’s when we had a look at moving into other sales channels, rather than just focusing on a retail display home way of selling. That’s when we progressed into wholesale or what we call the investor market.”
Rhett’s youth has long been one of his greatest assets. He is praised for inheriting his father’s and grandfather’s work ethic, but beyond that, he’s praised for taking Simonds into the 21st century.
My Simonds is just one example; a new technical capability spearheaded by Rhett that allows the customer to jump online and follow the progress of their home.
“It’s a modern frontier.” Rhett beamed proudly, “It allows them to feel more connected and involved along the entire way which means there’s a greater level of satisfaction at the end.”
All three gentlemen are quick to point out that Simonds has consistently been a ‘first mover’. This is true whether discussing their superior quality of display homes or their consistent adoption of new technology, as Rhett recounted.
“It’s exciting but the truth is, we’ve got to act like this. The whole property development process is evolving beyond the traditional bricks and mortar. Advancements in technology are bringing the modern purchaser into a more educated sphere and that means we’re having more complex and specialised conversations with our customers. It’s an enjoyable progression for both sides of the discourse.”
Currently Rhett operates under many different hats. One of his more significant roles is that of joint CEO of the Simonds Homes business. This is a modern approach to the Executive position that puts himself and Kelvin Ryan in alternating two-week periods of control.
During the two-week ‘spare’ time that Rhett isn’t acting CEO, he is often to be found in the family office; more officially known as Simonds Consolidated. This overarching entity holds the family assets across several predominantly property focused investments and was born out of the controversial public listing of their once private family business in 2014.
The float that didn’t go to plan
It was a rocky time in late 2014 following the floating of the Simonds business. The company listed their IPO at $1.78 a share, delivering the Simonds family a windfall of around $151 million. In the two years that followed, the share price started dropping dramatically and has sat around 35 cents for the past four years.
“Our intentions were to draw a line in the sand,” Rhett noted, “we were a family own-and-rent building company that was becoming quite diverse with other interests. The prime purpose behind the IPO was to float Simonds Homes and to set up Simonds Consolidated, keeping them, both neatly separated.”
There was certainly some difficulty as the Simonds men adjusted from their private family business to their new publicly listed one. However recent reshuffles of the board and CEO positions have seen a boost in both profits and confidence.
On the rise with sights set even higher
In mid-2018, following the appointment of Kelvin Ryan to CEO, the group announced that they had doubled their previous year’s profits and were seeing signs of improving margins and market share as well. The following year saw the company perform strongly again, defying soft market conditions to post a 13.6% rise in market revenues from the year before.
“We made a comment eight months ago that come Christmas time everything will be back to normal, while all around us everyone was saying, no it’s going to be three years.” Gary stated proudly.
“I couldn’t see it because the interest rate was low, and we’ve got strong employment. So, we prepared ourselves to be back to normal at Christmas time – and it’s proved to be a wise move.”
Once again, their intelligent reading of market conditions and ability to meet buyers with congruent products brought the Simonds brand back into favourable light. While not forgotten, the complications of their bumpy pubic listing are behind them. The ambition and strong work ethic that Simonds has long been famous for has set them back on the right track.
If you understand your customers, you’re going to find work
“The work is there,” Mark said, “It’s just whether you’ve got the right product to meet all markets.”
And that’s exactly what Simonds have worked hard to achieve. At the top end, Simonds offer their Prestige Range, with a number of luxury homes uniquely designed that sell for $13 to $20 million plus. At the bottom, it’s about understanding housing affordability.
All three gentlemen recognise housing affordability as a genuine problem for many Australians, with Rhett stating the sector forms a significant component of Simonds’ future residential development plans.
“As a family, we’re striving to make it easier for young Australians to get into homes. My grandfather pretty much built the business around this idea – as he likes to put it ‘to put kids into homes’.”
It’s still all about family
Mark put it well when he said, “People are not just giving us their life-savings, they’re putting their trust in us. We don’t take that lightly.”
If you move the market sensibility and the construction expertise aside, Simonds’ great strength is its sincerity and empathy towards its customer base. Their recognition of the level of significance that face each buyer in each transaction should not go underappreciated.
They have maintained their core family values across their 70 plus years of building homes and have become one of the strongest builders in the country as a result. Simonds truly does represent a worthy example of how empathy and ambition are not antipodes and can be jointly beneficial on the road to success.
It’s a sentiment that echoes in Gary’s assertive parlance as he closes the conversation with Development Ready.
“It wasn’t me that made Simonds. It wasn’t my son, or even my grandson. It was all the people who have worked with us over the past 70 years. We’re comfortable where we are but it’s not where we’re going to end up. We’ve still got a fair way to go.”