Wates margin hits 2.4% despite construction turnover dip
A strong performance in its residential development arm has boosted Wates Group’s pre-tax profit by 1% and its operating margin to 2.4%, despite a decline in its construction revenue.
The company reported turnover flat at £1.6bn for the year to 31 December 2018, with an improved profit before taxation of £35.9m. EBITDA was up 1.7% to £48m.
The family-owned firm also celebrated a record order book of £5.4bn for the year, up from £5.1bn in 2017.
While construction turnover fell 9% to £849m in 2018, which the company blamed on a decline in the market in the quarters before and after the EU referendum, it recorded an 11% rise in its residential business to £233.3m and an 8% increase in its property services arm to £514m on the back of contract wins in regeneration and social housing.
It also pointed to a strong cash position throughout the year, finishing 2018 with £114.2m and a new £120m banking facility from its lenders.
Wates invested £55.6m in its residential developments businesses during the course of the year, and another £10m in its commercial property portfolio. It also doubled the amount it spent with social enterprises in the year, to £5.5m.
Chief executive David Allen said: “These are really encouraging results. We’ve 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 we’ve 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.
“We’ve 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, we’re excited about what lies ahead for the Wates Group, whatever external pressures the next few months might bring.”