Chief Executive's Review

2017 was another strong year for Wates Group. The business grew by almost 6% from 2016 and enters 2018 with 3,863 people and a forward order book of £5.1bn.

David Allen


This success has come during one of the most turbulent and challenging years for our industry. The tragedy of Grenfell Tower will continue to be felt for many years. 2017 also saw a number of key competitors suffer substantial losses and the ultimate collapse of Carillion. Against that background, Wates’ determination to focus on long-term sustainability, to invest in the continued development of its people and to build collaborative client relationships, has enabled us to outperform the market. Results across all business units were encouraging. Our priorities for 2018 and beyond stay true to our long term strategic goals, putting the right systems, processes and people in place to allow us to serve all our customers on a sustainable basis.


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, there has been a marked reduction in incidents. In 2017 the RIDDOR Accident Frequency Rate was down 22% from 2016 at 0.047. We achieved a 41% reduction in Lost Time Injuries Reported and our health and safety performance led the industry, with an accident incidence rate less than half the industry average.


Group turnover, including the Group’s share of joint ventures’ and associates’ turnover, increased by 5.9% to £1.62bn. Profit before tax, and before taxation of joint ventures and associates, was 0.7% up on 2016 at £35.7m. Net assets increased by 68.9% to £119.4m. Despite challenging market conditions, the consistency of the Group’s performance is evidence of its excellent capabilities, resilience and success in delivering for our customers and partners.


Nearly 80% of turnover is derived from frameworks and partnerships and in 2017 the Group was appointed to two major public sector frameworks, for Scape Procure and for the Education and Skills Funding Agency. Both appointments supported our goal of growing a balanced portfolio of public and private sector clients and will contribute to our pipeline of work in 2018 and beyond.


People are at the heart of the Group’s success. We remain committed to investing in our people’s continued professional development. This was recognised by the award of Investors in People Gold accreditation for the third successive, three-year period, heralded as a ‘remarkable achievement’ by the IIP assessors.


Wates has a proud history as a home builder. In 2017 it continued to strengthen its position as both a leading residential developer, and one of the country’s leading providers of housing maintenance. Over 5,000 new homes were built, including city centre flats, new build houses, retirement homes and student accommodation units. The Group maintained in excess of 500,000 properties in the social housing sector, as well as managing facilities on more than 500 non-residential buildings through Property Services.


The Group’s award-winning sustainability programme, Reshaping Tomorrow, and its Delivering the Promise programme, underpinned by its Operating Framework, ensure that it consistently delivers the highest standards of quality and safety, while ensuring the actions it takes today impact positively on tomorrow. The Group’s 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 the communities in which it works.

It was recognised as Organisation of the Year at the 2017 UK Social Mobility Awards, for its work supporting communities and particularly its support for Social Enterprises (SEs). With spend of £2.65m the Group exceeded its target for the year for spending with SEs. The Group extended its partnership with The Prince’s Trust for another year, helping disadvantaged young people develop skills and identify opportunities for employment. Through donations from our people and support from Wates Giving, over £360,000 was donated over a four-year partnership. Reshaping Tomorrow Week was another success, with Wates people volunteering 10,700 hours across 93 community projects. The Wates Family Enterprise Trust also made grants to fund many of these activities. The 100th Building Futures Programme, supporting adults furthest from the labour market into employment, training or education took place in 2017. Over 150 people were supported, with over 50% moving into education, employment or training. The Group pioneered an industry/school engagement programme #ThinkBuild, in partnership with Career Ready and Arcadis, reaching over 3,000 students through Insight Days, work experience or site visits, and launched its first industry summer camp for those from disadvantaged backgrounds.


With a forward order book of £5.1bn, a strong financial position and a strategy for disciplined sustainable growth, the Group is well positioned for the future.


David Allen
Chief Executive