2022 financial results show our highest-ever turnover
Record forward order book expected to propel Group to further growth
- Profit before tax of £33.7m on our highest ever turnover of £1.89bn
- £2.8bn of new work during 2022, finishing the year with record £8.35bn forward order book
- Forward order book has increased in every single one of our main divisions
- £153m of net cash and an undrawn revolving credit facility of £90m
- Despite strong inflationary pressure, interest rate rises and other economic headwinds, we have rounded out our 125th anniversary year primed for growth
We reported a profit of £33.7m on our highest ever turnover of £1.89bn, up 17% on last year.
We secured £2.8bn of new work during 2022 with a record forward order book of £8.35bn, up 17% from 2021, which was itself a record year for turnover.
Against strong inflationary pressure, interest rate rises and other economic headwinds, we rounded out our 125th anniversary year with order book and profit up across every one of our divisions and net assets of £162m. We ended the year with £153m of net cash, with a £90m undrawn bank facility, and as a UK-based employer, we increased our total tax take on behalf of the Exchequer from £233m in 2021 to £313m in 2022.
During 2022 we maintained our industry-leading health and safety performance and our commitment to creating real social value in the communities where we deliver projects. This was the second full year of our five-year social value strategy and the company generated £163m in social value whilst also spending £7.2m with social enterprises. We also continued moving toward becoming a net zero operator, continuing to play a key role in upgrading the energy efficiency of the built environment.
Operations across our business performed strongly. Our construction business won £1.32bn of new work, and turned over £958m, up 24% from last year, with a highest-ever average project size of £43m. This included projects completed during the year such as the Sandwell Aquatics Centre, which played host to the swimming events at the Birmingham 2022 Commonwealth Games and will now benefit the community of Sandwell for decades to come. We also completed over £100m of work on our largest-ever construction project, the c.£500m Envision AESC Gigafactory in Sunderland, which will make batteries to meet the growth in demand for electric vehicles.
Turnover in our residential business increased by £42m, taking it to £310m during 2022, a rise of 16%. We marked the year with a number of industry awards for our work with Cardiff Council, providing low-carbon, energy efficient homes, including many built offsite. Meanwhile, our Developments group turned over £123m, up by 15%, and held £148m in invested assets. Our portfolio of development investments in joint ventures performed well and new deals were created through our Partnerships business.
Our property services division increased turnover across its three businesses to £499m, with a forward order book of £1.9bn. We launched the Wates Retrofit offer, providing zero-carbon retrofit services to domestic and commercial properties, and 2022 was the best year yet for our specialist fit out and refurbishment business, which retained all its key customers and won or extended places on some of the market’s biggest public and private sector frameworks. One of these is the Ministry of Justice’s Construction Services Framework that will see us work on projects worth between £5m and £30m. Our facilities management business also went from strength to strength, having its best-ever year, winning new contracts and expanding work with existing customers.
These results in our 125th year represent a really strong performance in the context of a challenging economic environment. Each of our divisions have contributed strongly to profitability and I am delighted to see such consistency across the Group.
2022 saw us continue our upward trajectory on turnover, reaching £1.89bn the highest in our history. This high figure reflects the strong and stable family governance, hard work of people across the business, the scale of our ambition, our proven capability to manage large scale projects of strategic national significance, and our customers’ confidence in our ability to deliver for them, particularly in the public sector.
We are in a strong, resilient position, with profitability across all our divisions, another record forward order book, and a solid cash balance. These results are a testament to the efforts of everyone at Wates, and my particular thanks go to Philip Wainwright for his sterling performance as Interim Chief Executive. He has left a firm foundation from which I hope to continue growing this remarkable business.”
Chief Executive, Wates
2022 Annual Review
Group Environmental Sustainability Plan
Sustainability is a strategic issue for us, and we regularly evaluate the resilience of all our investments and activities through this lens.
The Environmental Sustainability Plan announced today alongside the results, represents an evolution of the goals set by us in 2020, reflecting an improved understanding of the science behind addressing climate change and the actions necessary to drive the greatest impact within an achievable timeframe.
Last year, our near-term greenhouse gas emissions reduction targets were validated by the Science Based Targets Initiative.
Financial performance and productivity
- Profit before Tax of £33.7m.
- Record order book of £8.35bn, up 17% from 2021(£7.1bn).
- Group turnover at £1.89bn (up 17%) from £1.63bn.
- Net cash at £153m, and net assets at £162m.
- Total tax contribution to HM Government of £313m (up 34%) from £233m.
- £2.8bn in new work secured during 2022.
Key contract wins in 2022 included:
- Signing and beginning work on the c.£500m contract to design and build Envision AESC’s advanced car battery gigafactory in Sunderland, which will boost growth in electric vehicles in the UK and will help to create around 4,500 jobs in the North East. This is the largest single contract in our history.
- Securing a place on the Ministry of Justice’s new five-year Constructor Services Framework which will deliver property estate activities including new build, refurbishment, maintenance, and minor works. Work will be on projects worth between £5m and £30m.
Health, safety, and wellbeing
- Industry-leading health and safety performance, with a RIDDOR AFR (Accident Frequency Rate) of 0.04 and an Accident Incidence Rate (AIR) of 84 down from 110 the previous year.
- This marks the seventh consecutive year in which we have outperformed the industry average on the AIR as recorded by both the Health and Safety Executive (HSE) and Build UK.
- 23.4 million hours worked with 683 sites under construction during the year.
- 28 Mental Health First Aiders trained in 2022 growing the business-wide network to 307. An additional 98 people trained in Mental Health First Aid from across the supply chain and client partners.
- At the end of 2021 we pledged to reduce by 10% the number of mental health absences related to work through a programme of training, promoting the support available to staff, and better management of workplace pressure. In the 12 months from January 2022, there was a 20% improvement from 2021.
Sustainability and net zero
- Building net zero homes our Cardiff Living programme is delivering 1,500 homes for Cardiff Council over 10 years, as the Council increases its provision of affordable homes for local residents. The Aspen Grove low-carbon development incorporates 149 homes which make use of the latest low-carbon technologies. CO2 emissions will be around 90% lower than an average home and 80% lower than a new build.
- Retrofitting to decarbonise In Spring 2022, we completed one of the first Social Housing Decarbonisation Fund Demonstrator projects for Northampton Borough Council, adopting a truly collaborative approach to social housing retrofit. This work reduced the carbon footprints of homes and reduced annual energy bills by as much as £724.
- Building net zero schools We have completed a £10m net zero school in Rochdale, Greater Manchester. Littleborough Community Primary School is the first project to be completed as part of the initial tranche of net zero schools in the DfE’s School Rebuilding Programme, which will see us delivering two more projects at Lytham St Annes High School and Whitworth Community High School.
- £163m generated in social value, through education, employability, and community development projects and in support for social enterprises.
- As part of our five-year social value strategy we committed to spending £45m with social enterprises by 2025. We have exceeded that target already, with £45.6m spent in total, including £7.2m spent with social enterprises during 2022. We have now increased our target, aiming to spend £55m with social enterprises by 2025.
Homes and properties
- Over 500,000 homes maintained in the social housing sector, with facilities managed at 701 commercial properties
- Over 4,626 new homes under construction in 2022 including senior living, student accommodation, social housing and high-density, city centre housing
- Over 15,812 homes in our Developments’ pipeline, of which 3,000 are seeking planning consent on six sites
Greater inclusion and diversity
- In 2022 we were recognised for our work to make the business more inclusive and diverse, with national awards, including being listed in The Times Top 50 Employers for Women; the Construction News Award for Diversity and Inclusion Excellence; and two Working Families Best Practice Awards, in recognition of its flexible working principles and initiatives.