Willmott Dixon sets sights on Scotland as profits soar

Aaron Morby 9 years ago
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Willmott Dixon is looking to expand into Scotland for the first time and also open a new regional business centre in the south.

The growing construction and housing group saw turnover jump 24% to £1.2bn last year, helped by a contribution of more than £100m from its fledgling development business.

Latest results for the private company’s performance in 2014 show Willmott Dixon’s construction division drove a 61% rise in group pre-tax profits before amortisation of goodwill to £26.1m, ranking  among the best years ever.

Cash and bank balances also improved to £76m from £70m previously.

But the performance of the housing division was marred by legacy contract issues and lower than expected completions at the new Regen housing development business.

Rick Willmott, group chief executive, said: “We are giving serious thought to expanding after an exceptional performance from our construction division.”

The builder presently operates out of five local company offices and is looking at plans to move north and fill out an area in the south as it approaches optimal unit turnover of £175m in some regions.

“We have never had a business unit in Scotland and there is also now scope for a local company office in the Mid-south of England covering Hampshire, Dorset, Wiltshire and Berkshire,” said Willmott.

Much of construction’s growth came from education work.

He said that Willmott Dixon’s off-the-shelf Sunesis  school design was winning over more councils with 23 orders for schools that are creating 9,000 new places at significant cost and time savings for local authorities.

Developer Berkeley Homes has also looked at the system to fast-track s106 requirements for primary schools in wholesale housing schemes.

Willmott said more than 120 suppliers had taken up its EarlyPay supply finance model introduced last year with £120m of spend now being directed through the scheme.

The construction arm’s forward order book now stands at £556m with a further £253m in exclusive negotiation.

Divisional trading

Public and commercial

  • Construction: turnover £753m; 2013 £636m
  • Interiors: £74m; 2013 £50m

Residential

  • Housing: turnover £279m; 2013 £197m
  • Regen: turnover £113m; 2013 £32m

Support Services

  • turnover £143m; 2013 £121m

Willmott said that despite market-wide problems with costs on major housing contracts, the reorganised residential division, bringing together construction and development, offered the greatest potential for longer term growth.

He added that while the majority of housing workload remained in the south, Willmott Dixon had used its Birmingham office as a springboard into the North West and Liverpool.

Longer term Willmott said the housing business would expand north, targeting Bristol, Birmingham, Manchester and Leeds.

At the Regen development business an insufficient pipeline of future sites is expected to hamper sales and completions this year.

“But from 2016 onwards, we expect to see the number of homes sold rise from more than 300 to 600 by 2018,” he added.

“We see the opportunity for strong synergies in bringing our housing construction and homes for sale and rent businesses together.

“It gives us accurate cost advice when buying land and on major Regen schemes we have flexibility over building for sale or private rent.

“Overall more than 2,500 homes are now in development for market sale and private rental.”

 

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