Wates poised to grow with record forward order book and rising net cash balance
The Wates Group secured £2.4bn of new work in 2020 enabling it to end the year with a record forward order book of £6.6bn, up 13.5% from 2019.
In one of the most challenging years in its 124-year history, the Group delivered EBITDA of £14.7m and pre-tax profits of £1.7m (after exceptional costs of £11.4m) from a turnover of £1.45bn. It ended the year with £215.9m of cash (and £161.6m of net cash, which was £50.8m up on 2019) and, in addition, has access to an undrawn £120m revolving credit facility.
The Group accessed £50m of bank funding through the Coronavirus Large Business Interruption Loan Scheme and received £7.7m of income from the Coronavirus Job Retention Scheme. As a UK-based employer, the Group made a total tax contribution of £107m to the Exchequer.
Wates Residential increased its turnover by 21.1% and accounted for 52% of all work won across the Group, including its appointment as development partner for Harrow Council’s £600m, 1,500-home regeneration scheme.
In November, the Board approved plans to invest significantly in its housing businesses and in the measures needed to improve the environmental sustainability of the Group’s operations.
The business adapted quickly and effectively to the restrictions imposed as a result of the pandemic, with site productivity in the final quarter of the year approaching pre-pandemic levels, creating real optimism for 2021 and beyond.
We began 2020 with enormous optimism, having just achieved the highest level of profits the Group had generated for almost a decade and a record order book. Within three months, the pandemic left us facing a battle for survival. That we finished the year with a positive result is a credit to the remarkable efforts, resilience and adaptability of everyone at Wates.
The pandemic challenged us to work in different ways and to adapt. We reorganised our business to focus on helping to tackle the UK’s housing shortage, supporting the public sector to build back better and investing in the modern methods of construction that will enable us to meet our customer’s needs in the future. Together, we have set the business up to succeed and we remain committed to our goal of becoming the most sustainable, trusted and progressive business in the sector.”
Chief Executive, the Wates Group
ANNUAL ACCOUNTS AND REPORTS 2020
- Industry-leading health and safety performance, with a RIDDOR AFR of 0.038 and accident incidence rate 67% below the construction industry average (as reported by HSE)
- 81% of all energy demand from renewable sources with 56% reduction in energy consumption
- 26.8 million hours worked with 713 sites under construction during the year
- Record order book of £6.6bn, up 13.5% from 2019
- Cash at £215.9m, up 52% from 2019
- Net cash of £161.6m (up £50.8m or 45.8% on 2019)
- £1.8bn in new work secured from onset of pandemic (£2.4bn won during 2020 as a whole)
- Group turnover at £1.45bn (down 11.3%)
- Maintained continuous working throughout the pandemic, other than one pause in operations for less than three days in March 2020. Site productivity restored to 94% by December 2020.
- Maximum of 1,400 employees furloughed during first UK-wide lockdown, with no colleagues remaining on furlough from October
- Pay cuts imposed for colleagues working during the first three months of lockdown were reimbursed in full in February 2021 salaries
- 268 redundancies following the contraction in the size of the business, equivalent to a 7% reduction in personnel
- Key contract wins with both new and existing clients including the Department for Education, the Ministry of Justice, Harrow Council, MEPC and St Bart’s NHS Trust
- 38 projects completed across Wates Construction Group including schools and universities, police and fire stations, offices, and homes, as well as a 176-bed intensive care unit for The Royal London Hospital to boost response to COVID-19
- Over 5,400 new homes under construction in 2020 including senior living, student accommodation, social housing and high-density, city centre housing
- Wates Residential selected by Harrow Council as its development partner on a £600m regeneration programme to provide 1,500 new homes in Wealdstone
- Wates Group committed to zero carbon from its operations by 2025, as part of five-year environmental strategy, followed by launch of zero-carbon retrofitting service for social housing property owners
- £15.2m generated in social value, through education, employability, and community development projects and in support for social enterprises. Presented with award for Private Sector Leadership at the National Social Value Awards. Over 11,000 young people were actively engaged in skills, training, and work experience opportunities.
- £7.6m spent with social enterprises in 2020, with the Group surpassing its five-year target of £20m, 12 months early
- Industry-leading family leave policies introduced, with increased maternity, paternity/partner leave, and the introduction of carers’ leave to encourage a more diverse workforce
- Over 500,000 homes maintained in the social housing sector, with facilities managed at 323 commercial properties
- Over 11,800 homes in Wates Developments’ pipeline, of which over 3,800 are seeking planning consent, across 13 sites