Wates delivers improved profits and record order book again
Wates delivers improved profits and record order book again
Company reports increased profit for year ended 31 December 2018, with forward order book of £5.4bn.
- £114.2m cash balance
- Significant endorsement from banks, with £120m of funding secured to support future investment
- Significant investment in residential development projects across the UK in 2018
- Profit before taxation[1] up 1% to £35.9m (2017: £35.7m)
- EBITDA of £48.0m, up 1.7% (2017: £47.2m)
- Record order book of £5.4bn (2017: £5.1bn)
- Turnover[2] at £1.601bn (2017: £1.62bn)
- Net assets up7% to £135.8m (2017: £119.4m)
The Wates Group, one of the UKs largest family-owned construction, development and property services companies has reported increased profits for the year ending 31 December 2018, with a record order book of £5.4bn heading into 2019.
Turnover for 2018 was within 1% of the previous year at £1.60bn and the Groups operating margin increased to 2.4%. The Group made significant new investments in its residential developments businesses (£55.6m) and its commercial property portfolio (£10.0m) and increased the contributions it made to its defined benefit pension scheme. The Group maintained a strong cash position throughout the year, finishing 2018 with £114.2m and received a significant endorsement from its existing banks and from a new bank who, together, have committed to a bigger and extended £120m facility.
There was a 9% reduction in Construction turnover, a residual effect of the deceleration in the market in the quarters before and after the EU Referendum. However, performance across the Groups other key sectors of residential development (which grew by 11%) and property services (up 8%) improved on the back of key contract wins in regeneration and social housing.
Highlights of 2018
- Profit before taxation up 1% to £35.9m
- EBITDA up 1.7% to £48.0m
- Record order book of £5.4bn
- Industry-leading health and safety performance, with an accident incidence rate 77% below the construction industry average (as reported by the HSE)
- Turnover steady at £1.601bn
- Strong growth in Property Services (up 8%) and Residential Development (up 11%)
- 8 million hours worked
- Residential Developments turnover increased by 11% to £233.3m
- Property Services turnover was £514m, up 8% from 2017
- Construction turnover was £849m
- Key contract wins with both new and existing clients including Scape Procure, Marks & Spencer, the refurbishment of the Chalcots Estate for the London Borough of Camden, the Department for Education, the Ministry of Justice, the Parliamentary Estate, MEPC, Quintain and Royal Mail
- Over 7,000 new homes under construction in 2018 including senior living, student accommodation and high-density, city centre housing
- Wates Residential entered into a £1bn joint venture partnership with Havering Council to regenerate 12 Council estates across the borough over the next 12-15 years
- Sold the first new homes built as part of Wates Residentials Cardiff Living partnership with Cardiff Council to build 1,500 homes across the city
- Working with Homes England, Wates Residential was awarded a contract to build 200 new homes at Daedalus Village in Lee-on-the-Solent, regenerating the historic former Royal Navy Air Station site.
- Wates Developments sold its Lindfield land interests, received the go-ahead for 1,500 homes in Bicester with Redrow Homes and recorded five new joint ventures at Royston, Chalgrove, Barrow Gurney, Walberton and Bricket Wood, totaling 854 new homes.
- Homes England acquired the North Burgess Hill site from Wates Developments to accelerate the development of 3,000 new homes and Ford residents in West Sussex voted for our proposal for 1,500 homes the largest ever Neighbourhood Plan allocation
- Over 500,000 homes maintained in the social housing sector, with facilities managed at more than 350 commercial properties
- 177 management trainees and apprentices employed during 2018
- £5.5m spent with Social Enterprises in 2018 (2017: £2.7m)
- 84% occupancy across all premises in the Needspace? portfolio
David Allen, Chief Executive, the Wates Group, said:
These are really encouraging results. Weve delivered another year of increased profits by continuing to concentrate on working in the sectors and geographies where we have proven expertise and for customers with whom we enjoy positive, effective relationships.
Over the past year weve been reflecting on what really matters to us and how we want our business to be in the future. We believe we have a responsibility to work together with our customers, suppliers and everyone involved in or affected by what we do – to inspire better ways of creating the places, communities and businesses of tomorrow.
Weve entered 2019 in great shape, with a record order book and significant backing from our banks to support the investments we want to make in our future. So, were excited about what lies ahead for the Wates Group, whatever external pressures the next few months might bring.
[1] before deducting share of joint ventures and associates tax
[2] including share of joint ventures and associates
