Willmott Dixon warns of covid-19 impact on project prices
Willmott Dixon has warned that the impact of the covid-19 pandemic is likely to continue to push up project prices and impact programme timings, as it revealed its financial results for 2019.
The company, which has managed to keep all of its sites open during the coronavirus lockdown, reported turnover of £1.25bn in 2019 (down from £1.32bn), and a decline in pre-tax profit to £31.3m, down from £38.6m. The company’s profit margin for the year declined slightly to 2.5%, down from 2.8%.
The firm’s construction arm accounted for £1.1bn of its annual turnover, down from £1.2bn the year before, while its interiors business recorded a turnover of £149m, up from £125m.
Meanwhile, Willmott Dixon, which procured 75% of its turnover via frameworks, had £93.1m of cash in the bank as of the end of the financial year.
But Willmott Dixon’s group chief executive Rick Willmott warned that there would nonetheless be an impact to the business from the coronavirus pandemic. He said: “While we have a healthy forward order book that stands at over £1bn, it’s inevitable that some projects may be delayed or postponed owing to the current economic situation created by covid-19.
“My message to customers is that we are an industry that is very good at solving complex problems. We have shown in our response to the pandemic that we can adapt our processes to continue building safely and deliver the important infrastructure that will be a driver for future economic growth.
“I think we need to be realistic that output reductions linked to social distancing measures, coupled with a possible lag in the supply of some materials from overseas, will inevitably have a continued impact on project prices and programme timings in the short to medium term. We are working closely with our supply chain partners and customers to mitigate this as much as possible, while ensuring that projects starting this year now take into account the likely covid effect.”
He also thanked the company’s staff for the way in which they have adapted to the crisis. Willmott said: “It’s been a phenomenal team effort from our people as we have adjusted our business to maintain operations during covid-19, one that has required a high level of resourcefulness. Our people quickly embraced the changes required to adhere to the Construction Leadership Council’s Site Operating Procedures, with projects and processes reconfigured to provide a safe working environment for our people and supply chain partners, whose support has been brilliant over the past few months.
“Our sites have remained open throughout, using adaptations like one-way systems for circulation, GoPro technology to capture progress, motion activated voiceover systems to remind people to abide by social distancing and staggered breaks and lunch times, with clear signage for social distancing in canteens. We now expect all sites to remain open, although covid-19 related safety measures and availability of materials will mean that output levels will be reduced compared to before the pandemic. While this will inevitably impact upon pre-pandemic expectations in terms of timescales and budgets, I really appreciate how supportive our customers are being on this issue.”
Top image: Rick Willmott