Tier one contractor Wates posted record annual turnover last year although its statutory pre-tax profit nosedived, its latest accounts show.<\/p>\n
The firm \u2013 ranked 7th in last year\u2019s CN100 index of top UK contractors<\/a> \u2013 saw its revenue (excluding joint ventures) rise by 9.2 per cent from \u00a32.1bn to \u00a32.3bn for the year to 31 December 2024.<\/p>\n Its statutory pre-tax profit of \u00a32.6m was down sharply on the previous year\u2019s \u00a344.9m. As a result, Wates\u2019<\/a> statutory margin narrowed from 2.1 per cent in 2023 to 0.1 per cent.<\/p>\n The margin would have been 1.5 per cent but for \u00a328.8m in exceptional items related to the transfer of pension liabilities, according to accounts released on Tuesday (8 April).<\/p>\n Group chief executive Eoghan O\u2019Lionaird<\/a> (pictured) described a \u201crobust performance in difficult market conditions\u201d, adding: \u201cThe business ended the year in a strong position with a solid cash balance.\u201d<\/p>\n Wates\u2019 cash holdings rose from \u00a3138m to \u00a3195.6m, including \u00a313.1m held in construction project bank accounts for future payments to designated suppliers \u2013 higher than the \u00a31.7m recorded in 2023.<\/p>\n No bank loans were taken out, compared with \u00a320m that was borrowed \u2013 and repaid \u2013 in 2023. Wates has access to a \u00a384m undrawn revolving credit facility, extended by six months in 2024.<\/p>\n Its forward order book grew by 1.2 per cent to \u00a38.64bn, with the construction division accounting for \u00a33.6bn.<\/p>\n Divisional turnover rose from \u00a31.18bn to \u00a31.27bn despite a \u201cchallenging economic environment\u201d, construction executive managing director Steff Battle said.<\/p>\n The division won work worth \u00a3804m and ended the year with 312 active sites.<\/p>\n Key wins last year included a regeneration project in Middlesborough<\/a> and the Victoria House life science hub in London.<\/p>\n Project starts included the 1,700-place HMP Gartree under the Alliance for New Prisons programme.<\/p>\n Provisions for liabilities \u2013 mainly remediation works \u2013 decreased from \u00a375.6m to \u00a353.2m. Directors estimated it will cost \u00a342.8m to complete remediation, with up to \u00a331.3m potentially recoverable from subcontractors.<\/p>\n Wates said the Building Safety Act presented both \u201ca future opportunity and a risk\u201d. It is focusing on \u201cestablishing the changes to our systems, processes and competencies needed\u201d to meet regulatory requirements, \u201cparticularly in relation to high-risk buildings\u201d.<\/p>\n Wates paid out \u00a318.9m in dividends last year, up from \u00a314.6m in 2023. Average monthly headcount grew from 4,321 to 5,192, with a wage bill of \u00a3330.1m, up from \u00a3282.5m.<\/p>\n Looking ahead, O\u2019Lionaird highlighted the purchase of property repairs firm Liberty Group last October as significant.<\/p>\n \u201cWe don\u2019t make a lot of acquisitions but this is an important one,\u201d he told Construction News<\/em>. \u201cWe think the age of conversion from gas to electric heating\u2026 is upon us.\u201d<\/p>\n O\u2019Lionaird also foresaw expansion in the fit-out market, especially in London. Wates set up a new fit-out division last November<\/a> to target the capital\u2019s commercial market.<\/p>\n The move was \u201copportunistic\u201d, O\u2019Lionaird said. \u201cWe haven\u2019t been active in the commercial fit-out market in London, but it\u2019s a market where we see growth.\u201d<\/p>\n A 20-strong team, led by ex-ISG executive Lee Phillips, did not generate revenue last year \u201cbut will support entry into new markets from 2025\u201d.<\/p>\n Wates acknowledged \u201cuncertainty in the global political and economic environment\u201d, particularly regarding tariffs imposed by the Trump administration<\/a>.<\/p>\n O\u2019Lionaird said it was \u201cvery clear\u2026 that tariffs will be good for nobody. But the direct impact on our industry and Wates remains to be seen\u201d.<\/p>\n He added that he did not expect a significant impact since most materials Wates uses are from the UK, Ireland or Europe.<\/p>\n \u201cBut we have to be realistic that tariffs may have an impact in the broader economy\u2026 and we\u2019re hoping and expecting that the [UK] government will continue to find ways to reach an accommodation.\u201d<\/p>\n