The credit crunch and global recession was bad news for most businesses – but not for Causeway Data Communications. With property values in meltdown, there is a good profit to be had for a company producing software that provides accurate, but affordable, property valuations.
Selling software to banks to provide up-to-date values on the homes on which their loan books were secured has become a lucrative development. Yet it is a departure for a company that was initially focused on providing low cost valuations for property taxes.
Causeway Data Communications (CDC) emerged as a spin-off company from Ulster University’s Coleraine campus in 1997. Adrian Moore is managing director of the company, on secondment from the university, where he remains professor of geographic information science.
The genesis for CDC came from a research bid put in by Moore and Ulster’s professor of telecommunications, Gerard Parr. The bid attracted favourable attention within the university, which was keen to increase commercial income, including through the creation of spin-off companies. The university, though its UUTech company, remains a minority shareholder in the company.
At first, CDC provided consultancy services on using computerised systems for property valuations. But in 2002, the company changed direction and moved into the production of its own software. This led to a prolonged phase of major growth.
Its first major contract was to Northern Ireland’s Valuation and Land Agency, selling software that enabled the VLA to conduct computer-assisted mass appraisals of property values. These, in turn, became the basis for local rates bills. In the previous valuation, in the 1970s, valuers and estate agents were employed to trawl round manually, looking at every property to produce individual valuations.
Following the commercial success of this product, CDC looked to external markets. The most lucrative of these has been the United States, where every county (small local area) has to conduct property valuations on a frequent basis. Having software to conduct mass appraisals cut costs substantially and CDC has made big inroads into this market over the last four years. Now this important market is serviced on behalf of CDC by a large IT company, enabling CDC to focus on product development.
A fresh application for CDC’s software fell into its laps with the global financial crisis. The collapse in banking confidence and inter-lending was, to a large extent, caused by a lack of confidence in the underlying value of the securities on which financial institutions loaned money. In particular, it was unclear how much the properties were worth on which sub-prime home loans were awarded.
CDC’s software had an obvious application in providing the answers. Consequently, property valuations for home lenders – on new and old mortgages – has become the fastest growing part of CDC’s product range.
“We see this as an opportunity for us going forward,” explains Adrian Moore. “We will be growing the business in the next 12 months and making a push in that market place.”
CDC is well positioned to achieve that surge in the next phase of development. It is now in advanced negotiation with a major institutional investor to finance substantial expansion of turnover and staff. The company already has seven staff and will soon look to increase this.
With the University of Ulster’s Coleraine campus on its doorstep – literally, as the company is situated in the University’s technology park – and relevant masters courses provided by the university, finding highly qualified graduates to work for the company has not been a problem.
The irony is that as the value of the world’s assets plummeted, the value of this company – which values those assets – has multiplied.