2016 was another strong year in the development of the Wates Group. The business has experienced growth of 20% from 2015, and now enters 2017 with 3,931 people and a forward order book of £3.6bn.
DELIVERING ON OUR STRATEGY
The Group has successfully integrated SES (Engineering Services) Limited and the trade and assets of a number of construction projects from Shepherd Construction Limited which were acquired in 2015 and have established Wates as a major player in the industry, validated by the award of ‘Major Contractor of the Year’ at the 2016 Building Magazine Awards. This award reflected the improvement in fortunes in our Construction business, particularly in London, which has resulted in an average project value of over £22m in 2016, compared to around £15.8m per project the previous year.
Wates in 2016 now has a more geographically balanced construction business, with a specialist mechanical and electrical engineering capability, and a non-domestic property services offering growing in both reputation and capability.
Our priorities for 2017 and beyond stay true to our long term strategic goals, putting the right systems, processes and people in place to secure our long-term growth strategy on a sustainable basis. This is particularly pertinent to our Construction business, where we are introducing a balanced portfolio across both public and private sector clients, which we believe will provide greater stability in the face of expected headwinds in our sector over the next two years. The recent appointment of Wates on to the Scape National Construction framework for the delivery of public sector projects, reflects this emphasis, and will be reported on in our 2017 accounts and reports.
STRONG PERFORMANCE
Group turnover, including the Group’s share of joint ventures’ and associates’ turnover, was £1.53bn. This is a 20.4% increase year on year. Profit before tax was 17.1% up on 2015 at £35.5m. The Group’s gross cash increased by 50.4% to £191.6m.
Despite challenging market conditions, the consistency of the Group’s performance demonstrates its excellent capabilities and resilience in delivering for its clients.
INVESTING IN NEW HOMES
Wates has a proud history as a home builder, and in 2016 we cemented our position in the residential sector, not only through the building of homes, but also through our continuing work as one of the country’s leading providers of housing maintenance. We maintained 500,000 affordable homes through our Property Services business (Wates Living Space); Residential Developments delivered 721 homes with 1700 planned for 2017; a further 1,198 residential units were in progress by Construction and we established our credentials as a specialist provider of homes for senior living; 100 apartments were completed in 2016 with this number set to increase to 870 in 2017.
THE JOURNEY TO ZERO-HARM
Keeping people safe from harm and creating a healthy and safe environment wherever the Group operates remains Wates’ number one priority. Since the introduction of a Group-wide zero harm campaign in 2016, we have seen a marked reduction in incidents: in 2016 the Group‘s RIDDOR AFR was down 47% from 2015 at 0.062; we achieved a 73% reduction in Dangerous Occurrences, and a 28% reduction in our lost time injury rate.
BUILDING COMMUNITIES
The Group’s sustainability agenda, Reshaping Tomorrow, and its Delivering the Promise programme, underpinned by its Operating Framework, ensure that it performs consistently for its client to the highest standards of quality and safety, while ensuring the actions we take today impact positively on tomorrow.
The Group has a deep commitment to the communities in which it works. Its financial stability, family ownership and long-term commitment to the construction industry enable it to make a tangible and positive difference to the environment and to communities now and for future generations.
In 2016, we were awarded the Queen’s Award for Enterprise: Sustainable Development for the second time, in recognition of our work supporting communities.
The Group has continued its partnership with The Prince’s Trust to help disadvantaged young people develop the skills and identify opportunities for employment. Our people raised £75,000, contributing to a total of £172,000 donated over a three year partnership. Through its volunteering schemes and with the very welcome support of Wates Giving, our people gave 6,500 hours across 72 projects to support the communities in which we work.
We exceeded our target for the year for spending with Social Enterprises, with £2.13m spent. Nearly 75% of our sites used a Social Enterprise in 2016, and 646 of our supply chain attended the Supply Chain Sustainability School during the year.
The Group supports employment and training especially for those facing significant barriers to employment. In 2016 the Group delivered the Building Futures programme for 115 people with funding from Wates Giving, with 2016 seeing the 1000th person completing the programme. The Group also aims to engage with over 10,000 young people and promote the built environment through activities, which include World of Work Tours, Careers Events and Open Doors.
2017 AND BEYOND
With a forward order book of £3.6bn, a strong and stable financial position and a clear strategy for growth, the Group is positioned well for the future.
Andrew Davies
Chief Executive