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Wates continues to demonstrate resilience and strength in challenging market
Turnover increases 7% to £1.2bn with underlying pre-tax profit of £29m*
- Total turnover up to £1,194m (2011: £1,117m)
- Underlying pre-tax profits* of £29.3m (2011: £32.9m)
- Group margin* at 2.7% (2011: 3.2%)
- Restructuring costs incurred £4.9m (2011: nil)
- Group net cash £121.3m (2011: £132.1m)
- Net assets increased to £70.2m (2011: £64.3m)
- Order book remains robust at £1.6bn (2011: £2bn)
*Underlying pre-tax profits and margin are stated before re-structuring costs of £4.9m (2011: nil) and profit on sale of investments £1.3m (2011: £7.2m)
London, Monday 25 March 2013: Major UK construction services and development company the Wates Group (Wates) reports a solid financial performance for the year ending 31 December 2012, with turnover increasing 7% to £1,194m (£1,117m in 2011) and underlying pre-tax profits of £29.3 million (£32.9 million in 2011).
2012 saw Wates complete some major projects including the Doncaster Civic Centre (named the Chartered Institute of Building’s ‘Building of the Year’), Dixons Allerton Academy, Inspire: Luton Sports Village, Marcol House, in London’s Regent Street, affordable housing developments in Kirklees and Oldham; refit almost 30,000 homes and deliver over 1,000 retail and commercial fit-out projects such as the American Express Headquarters in Brighton.
Wates ended the year with a robust forward order book of £1.6bn and a cash balance of £121.3m. The Group’s long-term and responsible stewardship contributed to a 9% increase in net assets in 2012 to just over £70m (£64.3m in 2011), and £77m capital employed in land and property assets with no debt commitment.
Paul Drechsler, Chairman and Chief Executive of the Wates Group, said:
“As a wholly family owned business, Wates’ long-term goal is to hand over a business of increased value and standing from one generation to the next. Fundamental to this is our strong, resilient balance sheet, built over many years by strategic long-term investment and a year on year focus on sustainable profit delivery. Our 2012 results demonstrate the benefits of such an approach.
“Reduced demand for construction, some unsustainable pricing by competitors and an increasing number of supply chain failures combined to create the most demanding trading conditions in 2012. This, together with some operational challenges, placed pressure on our margins in the construction business. Despite this, our turnover increased again to £1.2bn, another year of growth. Underlying pre-tax profits were solid at £29.3m, down from £32.9m in 2011.
“Underpinning our financial stability is the diversity of our portfolio. Our businesses work in varied sectors such as residential development; housing; education; local authority work; heritage projects; responsive maintenance; retail and interiors, reducing our exposure to fluctuations in any one part of the construction market.
“Our financial position and commitment to deliver on time and on budget is crucial to our customers, who, in the current economic climate, are placing more emphasis than ever on reliability and the added value that Wates can bring to projects through our community and sustainability activities. 65% of our work in 2012 came from repeat customers and we are pleased to work with some major organisations and household names such as John Lewis Partnership, Lloyds Banking Group, American Express, the Education Funding Agency, the Metropolitan Police and the Ministry of Defence, East Thames Housing, and Dolphin Square, delivering exceptional projects across the board.
“2013 has got off to a more positive start for the construction industry, with housebuilding in particular seeing some recovery; we believe there are great business opportunities for Wates in what will continue to be a challenging and uncertain market. Our priorities will remain; safety, profitable growth, value for customers and using business growth to transform society.”
- ENDS -
Notes to Editors
Established in 1897, Wates is one of the UK’s largest family-owned construction services and development companies employing over 2367 people. In 2011 Wates received a Queen’s Award for Enterprise in Sustainable Development, was the Winner of BITC Company of the Year award and attained Investors in People Gold status.
For further information please contact: Gareth Coombes-Olney, Group Communications Director
Email: Gareth.Coombes-Olney@wates.co.uk / 07825 202 293
To view the turnpage version of Wates 2012 Annual Report and Summary Financial Statement
To download press release as a pdf version