ARCHITECTURAL design firm Coda Studios is looking to expand its horizons by buying a business in Leeds.
David Cross, managing director, said the Sheffield-based firm is on course to hit £1m in turnover this year, approaching the figure it recorded at its peak, before the 2008 crash.
The company has just bought AC Liani, an architectural practice in Sheffield with a turnover of £200,000 to £300,000, marking its first acquisition.
The firm’s two staff members have moved to Coda Studios’ office. “It’s a classic merger to strip out costs and diversify”, said Mr Cross.
Leeds is next on the agenda, followed by Manchester and the Peak District National Park.
Mr Cross, the majority shareholder and founder of the business, said: “Acquisition wise we want to move into new markets, so we want to move into Leeds.
“Our classic business market has been Sheffield City Region.”
The company may set up a small office in the city before buying a business, but Mr Cross said that “the bigger picture is an acquisition or merger with a like-minded practice with the same vision and values”.
He added: “We’ve got some really good connections in the legal sector, in the commercial property sector and the banking sector.
“We’ve got a lot of traction. That’s what is making us look at Leeds seriously.”
Coda Studios, which has a current turnover of around £600,000, has recruited six people this year.
“We would expect this year to break £1m, that’s the target”, said Mr Cross, who added that the business is profitable.
“What we do see is potential in the market”, he said.
“I think housing will spearhead the economy’s recovery full stop.
“So the recession will continue until we start building houses again.
“And that will change when mortgage availability changes and when developer finance changes, because ultimately housing is a massive part of our economy.”
He added: “The private rental social sector we believe will be a massive growth market.
“We think social housing will struggle because of cuts.
“Social housing providers are slow, expensive.
“Private developers are quick. So I think we’ll see a growth in private developers developing social housing.”
Mr Cross said that people are “getting creative” with finance, adding: “The last few years we’ve been creative in terms of finding investors.
“I think this year we’ve unlocked £10m for Sheffield already. And we’ve got another £15m to come this year for Sheffield alone.”
Coda Studios, which is in its 10th year of trading, grew year-on-year from its inception until the financial crisis hit in 2008.
Mr Cross said: “I think we averaged over the four years of growth a new member of staff every three or four months.
“Business kept coming. Obviously we were in a property boom, so I guess it was reasonably easy to run a business.”
At its peak, Coda Studios had a headcount of 25 with a turnover of £1.2m. “We were on for about £1.6m by the time it crashed”, said Mr Cross.
He recalled: “We had our biggest party ever Christmas 2007. We bought loads of new furniture and January came and it all just fell off the cliff.
“The world ended. And we scrabbled around.
“We had some high profile clients go under, we lost quite a lot of fees, bad debts. We weathered it. We put our own money back in.”
The business lost 74 per cent of its turnover in 2008.
But the company has managed to survive the tough times and now has “a massive order book”, said Mr Cross.
Headcount has climbed back to 19, from a low of 12.
“We have diversified, we have grown into new sectors, rail, leisure, education, industrial, interiors, student, office, social housing.
“We’ve recruited some really good people since as well.”
He added: “I think our saving grace to survive the recession was that we actually bought our own properties.
“We always got the mortgages on capital repayment, we put big deposits down, we bought them for the long-term not the short-term.
“So we had a decent amount of equity when the crash came, we had a decent portfolio.”
He added: “We think we’ve got a unique offer. We are not classic, traditional architects.”
The business tailors its services and fees to each client, its employees are “super software literate” and it “doesn’t have layers of bureaucracy”, said Mr Cross.