Wates achieves highest ever operating profit
Group’s 2021 financial results best in a decade
The Wates Group has reported its highest ever operating profit of £40m. The business secured £2.3bn of new work during 2021 and ended the year with a record forward order book of £7.1bn, up 7% from its previous record in 2020.
- Wates Group achieves highest ever operating profit of £40m
- Group secured £2.3bn of new work during 2021, finishing the year with record £7.1bn forward order book
- Group enters 125th anniversary year primed for growth and powering forward with ambitious sustainability targets
As the Group entered its 125th anniversary year, it reported a leap in pre-tax profits to £37.4m (up £35.7m from 2020, and £1.2m (3%) higher than 2019) and EBITDA of £51.1m from turnover of £1.63bn (up 12%). It ended the year with £228.7m in cash, (up 6% from 2020) and net assets at £177.1m (up 25%). As a UK-based employer, the Group increased its total tax contribution to the Exchequer from £107m in 2020 to £233m in 2021.
Throughout the year, Wates strengthened its commitment to environmental sustainability, cutting carbon emissions by 53% (since 2019). It also continued to give back to the communities where it operates, generating £116m in social value over the course of the year. The Group will shortly be announcing details of a significant new sustainability-linked loan facility.
All the Group’s divisions performed strongly. Wates Construction generated pre-tax profits of £18.7m from a turnover of £772m (up 51%), cementing its position as a leader in the provision of new schools, offices, leisure facilities and homes while expanding its offer in new sectors including healthcare.
Wates Residential increased its turnover by 75% to £268m, as well as boosting its headcount by nearly 100 employees. Wates Developments saw its turnover jump 65% to £107m, generating £12m in pre-tax profits. This performance reflected the Group’s increasing investment in development activities.
Wates Property Services increased turnover by 14% across its three divisions to £475.9m, with its facilities management business, Wates FM, experiencing the best trading year in its history. Specialist fit-out and refurbishment contractor, Wates Smartspace, won more than £150m in new work. More than 50% of Smartspace’s work is now for public sector customers. In 2021, this included a series of important projects for the Ministry of Justice (MoJ) and the Department for Work and Pensions.
“I feel enormous gratitude for and pride in what the team here at Wates achieved in 2021. It is incredible that in a year that was frequently – and for extended periods – very challenging, we continued to work safely and produced the highest operating profit in Wates’ 125-year history.
What we’ve accomplished shows that our strategy of focusing on the performance priorities that will help us achieve our goals of being more trusted, sustainable and progressive – is working. This strategy is supported by significant new investments in our residential and developments businesses, and by the investments we’re making in data and modern methods of construction to enable us to offer market-leading services to all our customers and partners.
Despite the economic and political pressures that are affecting everyone right now, the strength of our performance in 2021; the size of our order book; our proven ability to help customers and partners meet their sustainability goals; the clarity of our strategy; and the quality of our amazing team mean we’re looking forward to the future with confidence and excitement.”
Chief Executive, the Wates Group
Financial performance and productivity
- Record operating profits of £40m (up £35.4m), PBT at £37.4m (up £35.7m), EBITDA at £51.1m (up £36.4m)
- Record order book of £7.1bn, up 7% from 2020(£6.6bn)
- Group turnover at £1.63bn (up 12%) from £1.45bn
- Cash at £228.7m, up 6% from 2020and net assets at £177.1m (up 25%)
- Operating margin increased from 0.3% (2020) to 2.5% in 2021 (2.4% in 2019)
- Total tax contribution to HM Government of £232.7m
- £2.3bn in new work secured during 2021
- 33 projects completed across Wates Construction Group including the Royal College of Surgeons in England
Health, safety, and wellbeing
- Industry-leading health and safety performance, with a RIDDOR AFR (Accident Frequency Rate) of 0.05 and accident incidence rate 60% below the construction industry average (as reported by HSE)
- 22 million hours worked with 631 sites under construction during the year
- Continued investment in employee psychological wellbeing with 226 Mental Health First Aiders trained and 594 colleagues offered personal resilience training
- 85% of all energy demand from renewable sources with 66% reduction in CO2 emissions since 2016 (baseline year)
- Location-based Scope 1 and 2 emissions measured in tonnes of CO2e reduced by 53% since 2019
- Work began on building the first of six zero carbon by operation schools in North West England for the DfE
- Wates Residential completed the first in a series of zero carbon, passivhaus-standard homes and modular built homes for Cardiff Council as well as 214 homes with renewable technology and smart energy management systems to reduce energy demand and cut fuel bills
- After undertaking zero-carbon retrofit inspections for social housing property owners, Wates Living Space has built a pipeline of future work worth £27m
- Wates Smartspace has been working with Lloyds Banking Group to introduce sustainable technologies across their branches and offices nationwide
- Wates Construction launched the Decarbonising Health Estates Partnership alongside Arup and HKS architects to support the NHS in developing and implementing decarbonisation strategies
- Key contract wins included the design of Envision AESC’s £450m advanced car battery gigafactory in South Tyneside and Sunderland; appointment as pre-construction stage partner for the British Library redevelopment at Boston Spa; and an eight-year housing maintenance contract with Lambeth Borough Council
- Wates Construction was appointed to the Ministry of Justice’s £1bn New Prisons Programme, supporting its drive to create 20,000 new prison places by the mid-2020s
- Wates Construction maintained its status as the DfE’s leading schools’ contractor, being appointed to the DfE’s new £7bn four-year schools building framework
- Wates FM won new work with the Wellcome Trust to provide engineering operations and maintenance services at the Wellcome Genome Campus in Cambridge
- £115.9m generated in social value, through education, employability, and community development projects and in support for social enterprises. Over 12,000 young people actively engaged in skills, training, and work experience opportunities.
- £6.8m spent with social enterprises in 2021
Homes and properties
- Over 500,000 homes maintained in the social housing sector, with facilities managed at 325 commercial properties
- Over 7,500 new homes under construction in 2021 including senior living, student accommodation, social housing and high-density, city centre housing
- Over 12,700 homes in Wates Developments’ pipeline, of which 3,000 are seeking planning consent on 14 sites
Greater inclusion and diversity
- Flexible working principles applied across all business areas, building on the industry-leading Family Leave Policies introduced in 2020, to make our workplaces more inclusive and to foster greater diversity in the team
- As part of the Group’s determination to be actively and consistently anti-racist; more inclusive and diverse, we held our second annual Inclusion Month in October, with over 1,100 colleagues actively engaged in activities. We also attended Birmingham Pride.