Wates soars to £40m record operating profit

Aaron Morby 2 years ago

Family-owned building contractor Wates has reported its highest-ever operating profit of £40m after a bumper year of orders.

Allen says that while there are concerns about inflation and competition for materials and talent, key markets offer opportunities for strong growth ahead in housing and the push for net zero
Allen says that while there are concerns about inflation and competition for materials and talent, key markets offer opportunities for strong growth ahead in housing and the push for net zero

The business secured £2.3bn of new work last year seeing its forward order book swell 7% to a record £7.1bn.

David Allen, chief executive, said Wates Group was entering its 125th year primed for further growth and setting ambitious sustainability targets.

He said: “We see construction growing by £100m this year and more again in 2023 as major project wins like our advanced car battery gigafactory project move to full construction.

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.”

Despite the challenges of last year, Wates’s regional expansion and major framework wins saw total group revenue rise 12% to £1.6bn, generating a 5% uplift in pre-tax profit to £37m.

Allen said Wates’ growth strategy was supported by significant new investments in residential and developments businesses, and by investments in data and modern methods of construction.

He said: “While there are concerns about the impact of inflation and competition for products, materials and talent, the group’s key markets, such as the housing sector, continue to offer lots of opportunities for profitable growth.

“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 meet their sustainability goals… mean we’re looking forward to the future with confidence and excitement.”

Operating margin across the Wates Group rebounded from the Covid-impacted 0.3% in 2020 to 2.5% last year.

Across the key operating divisions, Wates Construction cemented its place as a major schools and offices builder, while expanding into healthcare sectors.

This saw it generate a £19m pre-tax profit from a turnover up 51% at £772m.

Wates Property Services increased turnover by 14% across its three divisions to £476m, with its facilities management business, Wates FM, experiencing the best trading year in its history.

Wates Residential increased its revenue by 75% to £268m, while lifting its headcount by nearly 100 staff. 

The group saw average net cash improve strongly from £88m to £130m in the rebound year.

Latest news

Building engineering services workers accept 7% pay rise

Two-year deal includes a 3% hourly rate rise from October 2024.
2 hours ago

Inland Homes files for administration

Questions remain over house builder's last two years of accounts
24 hours ago

Council orders developer to tear down tower blocks

Comer Homes told to demolish occupied towers in Woolwich after planning row
1 day ago

Bouygues UK restructure sees CEO exit

Contractor restructures as Rob Bradley retires
1 day ago

Fit-out firm BW Workplace returns to profit

London and south east fit-out firm sees revenue rebound 50% to £216m
9 hours ago

Tarmac fined £1.275m after quarry death

26-year-old Luke Branston died during maintenance work at Leicestershire quarry
10 hours ago

Galliford Try targets multi-rise affordable housing

Firm fills new role of director of affordable homes
10 hours ago

Barratt to demolish more homes with faulty foundations

Number of homes to be demolished on Cambridge estate rises from 36 to 83
1 day ago

Steel contractor William Hare edges back to break-even

Revenue slides a quarter to £165m as firm records £108,000 profit
1 day ago

Willmott Dixon fails to agree final price for Newcastle leisure job

City council looks for new contractor as budgets under pressure
1 day ago

Bidding to start for civil service’s second home in Darlington

Government Property Agency will invite bids in Q4 for major new Government office complex
2 days ago

Arup and Aecom on board for £1bn Lincolnshire powerline

New high voltage overhead line and substations from Grimsby and Walpole
2 days ago

Plan in for Stansted airport terminal extension

Original Foster design will be replicated in 54m extension towards airfield
1 day ago

Clients consider options after Westridge collapse

£64m turnover contractor now in hands of administrators
2 days ago

Plans in for 800-bed Leeds student and retail scheme

Major scheme will replace The Core shopping centre in the city
3 days ago

Eric Wright Construction returns to profit

Construction division back in the black as strict contract selection pays off
2 days ago

Balfour boss Leo Quinn backs rainbow lanyards

Chief executive vows "visible leadership" on diversity drive
2 days ago

McAleer & Rushe awarded £60m Barking flats job

Work to start in November on near 200 rental homes project
2 days ago

Lancashire Council awards £300m building framework

Carefoot and Conlon secure spots for major building jobs
2 days ago

Housing contractor Real LSE files administration notice

Real LSE part of group formed in 2021 following acquisition of Rydon contracts
3 days ago

ISG clinches £155m Cat D prison expansion

Firm to deliver 780 new places at three existing prison locations
3 days ago

27-storey Salford student tower approved

540-bed student block to be built on former site of McDonalds' regional HQ
3 days ago

Morgan Sindall £48m Dumfries school job approved

Building work to start before the end of 2023
3 days ago

Pagabo starts race for £1.6bn decarbonising frameworks

Two frameworks are anchored by Great Ormond Street Hospital and Hull City Council
3 days ago

Former HS2 chairmen blast plans to scale back scheme

Fears grow for future of UK's biggest construction project
3 days ago

Redrow plans 1,400 home garden village in Rochdale

Construction on first phase could start next year
3 days ago

Bouygues/Murphy JV tipped for £2.3bn Thames tunnel job

Frontrunner emerges for Lower Thames Crossing 4.2km tunnel job
6 days ago

Subbies facing squeeze as main contractors tighten belts

Pay disputes increasing as suppliers fear major contractors returning to "bad old ways"
6 days ago

Portview takes control of Fulham Buckingham stand

Fit-out specialist steps in after main contractor failure
6 days ago

Firefighters probe cause of Leeds modular scheme blaze

Fire broke out in timber frame office job at Citu's eco development
6 days ago

Contractor services