Karl Hick: Changing with the times

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Having jumped out of a plane, snowboarded down a mountain and tried his hand at tobogganing, Karl Hick has an appetite for pushing himself to the extreme. As CEO of Larkfleet Group, he uses the same philosophy to run the companies under his umbrella.

Enjoying a bit of competition, Karl has always been a sporty person and runs competitively. After graduating from university with a degree in chemistry before obtaining a qualification as a chartered accountant, he was unsure what he wanted to do in life – until he saw the perfect job advertised.

“I saw an advert in The Sunday Times that said a construction company wanted an international athlete who was also a qualified chartered accountant. I applied and became the FD.

“The chairman was particularly interested in athletics, so I had three days where I was Finance Director of the property division and I had two days off to train and race.”

When Karl was injured he worked full time at the office, but he became so indispensable that it wasn’t long before he was unable to go back to training. He moved on to a new company in the London Docklands, which acquired Spalding-based Allison Homes shortly after he joined.

“They asked me to go up to Spalding from London to integrate this house building company into their group ethos. At that time, no one had any computers, it was just manual typewriters. I had to computerise it all and try to get everyone into the modern way of life.”

When he was asked to stay on full-time in Spalding, he moved his life to Lincolnshire, but it wasn’t more than a few years before Allison Homes got into financial difficulty. “I did an MBO of the company and myself and three other guys bought it out with the help of HSBC. I then became the owner, at quite a young age, of a company that was in quite a bit of debt.”

Nothing broke Karl’s determination to make the company into a success, even when the recession hit in the early ‘90s.

“At that time, I survived on my wit, without the knowledge base I have now. I didn’t really know what I was doing because I was new to owning a business. Surviving a recession is hard enough anyway, but clearly, it’s difficult when you haven’t got the experience and you don’t know whether you’re making the right decisions or not.

“Somehow I managed to get through that process. I was in debt to the bank by a lot of money so it was quite difficult and everything was on the line because I’d put everything into it.”
Karl managed to build the company up, paying off the debt and gained a stable footing. He continued to build the company up around the Lincolnshire area until September 11th, 2001, when he sold the company on.

Photo: Steve Smailes for Lincolnshire Business

Photo: Steve Smailes for Lincolnshire Business

Building foundations

Unable to trade in the property market for a year, Karl looked for new income. With an interest in science, he ventured into the waste technology industry, building another company up and selling it on in that time.

“I learned a lot in one year and got into a completely different industry. I became an expert on that within a year. But I always had a love for the property market and it’s what I have naturally done well in, so I went back and set up Larkfleet Homes.”

Karl grew the business by buying land as well as a construction company. He then started to diversify into sustainability.

“It was just me and I could do what I wanted. Before I had other people to account to, so I just did my own thing. I decided I would do it differently, I got into a lot of affordable housing because the government at the time was putting a lot of money into it, so I became a specialist in that area.”

He moved into fabricating housing and dealing with cutting edge technologies and development in the industry and at the beginning of the century he had a lot of support provided in government grants.
Wanting to gain as many resources as he could, which would benefit the business, Karl bought a building materials group which specialised in timber frames.

“I set up a builder merchant so that I could control my supplied materials so I wouldn’t get caught out by price or shortages. Then the recession happened in 2008.

“That was difficult but I was quite prepared for it, having gone through the previous one. I knew what to do and how to keep the business going on.”

Photo: Steve Smailes for Lincolnshire Business

Photo: Steve Smailes for Lincolnshire Business

Playing to strengths

During the recession Karl would work on the projects the government were providing grants for, such as solar energy, creating Lark Energy, as well as concentrating on the affordable housing market.

“They have to keep the housing market moving at some stage and I applied for all sorts of different grants. I became an HCA investment partner, which allowed me to go directly to the Housing Association to get funding from the government to build affordable housing, which was the only thing being done then. That kept me going during the recession.

“I decided that the business that was the most advantageous at the time was the energy company because the government had launched lots of tariffs for solar. I formed that alongside it, thinking that would give me an income/profit stream whilst the housing market was on the decline.”

Karl built up Lark energy over five years to become one of the biggest solar PV developers in the UK. But in recent months, the renewables industry has seen some hard times with two companies in Lincolnshire going into administration.

He is determined however to play to the group’s strengths whilst keeping the solar trade going.

“In the renewable energy industry, which two years ago was the envy of Europe and probably the world, we had some of the best people in the world working here because the government policy was very pro-renewables.

“Suddenly, overnight it changed from being very pro to completely against everything. The last six months I have been in a kind of recession trying to think what we can do with the government completely against us.

“The issue is that the government is very pro-nuclear, pro-fracking, and they’re also pro-fossil fuels, which I disagree with. They are completely anti-renewables which is ridiculous.”
Fighting the system

Despite a changing government attitude to many of the focuses that Larkfleet Group has had to endure, Larkfleet Homes turns over around £60 million and Lark Energy (pre-changes) turned over close to £90 million, but that will be reduced.

At the age of 57, Karl has no plans to stop fighting for sustainable housing and renewable energy. “The good thing is, I’m used to adversity, I’m used to fighting, I’m used to being innovative and I’m used to dealing with unbelievably difficult circumstances. My process of trying to change into different areas is that I’ve got to do it quickly and I’ve got to be good at it.

“Whilst that’s been going on I have a very pro-government stance on housing. So whilst one of my businesses got me out of the last recession, the government has become very pro-housing. I’ve been able to build up my Larkfleet Housing brand a bit easier because I have got government policy very much in favour.

“To some extent, it’s quite a strange time for me. I have one business in the worst recession there’s ever been and I’ve got another one where I have policies very much in my favour. I find it very difficult where it can be so logical in one area and so illogical in the other.”

Karl anticipates that the government will do another u-turn in the next couple of years and will make sure that Lark Energy is still there when it does. In the meantime, he is working on new housing designs, of which Larkfleet Homes have just been awarded House Builder of the Year at the Construction News Awards.

“We’re quite innovative and we do things differently. I do a lot of things that no one would think of like the flood risk house, like my solar steam and like my show house at Bourne. I’m developing it with a battery storage and it’s going to have an electric car.

“I’m moving the business on to become more sustainable and I want to make sure that all of the energy that’s obtained in the roof can be used. The excess can then go into the heating elements, so nothing goes to the grid. It all goes into the house and maximises the ability for it to almost generate its own energy and actually provide the energy for someone to use their electric car.”

He is also currently working on new designs for solar steam energy, which he plans on introducing to countries with hot climates where villages are currently not connected to the electrical grid.

Karl’s new flood homes also tick all the boxes for innovation, designed to move above any rising water, so that when the occupants are able to return home after a flood, no damage has been done.

“It’s not about money with me. It’s about being successful and doing the right things. Money has never been a motivator. I just like what I do and I like to make a difference. I like to do things that are cutting edge and different to everyone else so I tend to not follow the market.”

This feature interview was first published in issue 90 of the Lincolnshire Business weekly magazine.