Highlights:
• Pre-tax profit at £15.7 million (2011: £21.1 million)
• Turnover at £1.03 billion (2011: £1.05 billion)
• Net 2012 balance sheet of 147.3 million (2011: £144.7 million)
• Cash and liquid investments at £68 million (2011: £66.7 million)
• Secured forward order book at £1.37 billion
• 85% of Group’s budgeted work secured for 2013
• Re-appointed to Scape’s new £1.25 billion Major Works framework
• Growth of development pipeline through Regen division
• New launched 4Life Academy will train 2,000 people a year

Willmott Dixon’s Group Chief Executive Rick Willmott says: “While our work volumes and turnover held up well in a tough market, our reduced pre-tax profit is a reflection of the tighter margins available across our core markets. What is vitally important is the progress we continue to make in creating a platform for new growth, including an increasing pipeline of development work through our Regen division, the wider take-up of our Sunesis standardised designs, and contract and framework wins by our Energy Services company that launched successfully in 2012.”

"Our recent successful re-appointment as sole contractor on Scape’s major works framework is a massive achievement with the capability of delivering £1.25 billion of work over the next four years. Equally importantly, as a result of the framework award, is opportunity for us to continue to drive down procurement time and construction costs for our clients, while also supporting local SMEs and job creation by association. Given the trading environment we continue to operate in, supporting the ‘local pound’ is one of the most important priorities for Willmott Dixon and with Scape our aim is that 60% of project budgets are spent on companies within a 20 mile radius of each site.”

Talking about the three operating divisions, Rick says:

Capital Works

“While turnover fell fractionally to £904 million over the year (2011: £966 million), as you would expect in the current trading conditions, our contracting, housing and interiors’ companies held their market share, while also making progress in new markets.

“By delivering our service through a network of strategically located offices across the country, our management teams remain close to our clients and that allows us to adapt quickly to local requirements, offering solutions and addressing their specific needs.

“Our repertoire of projects illustrates the diversity of work we’re undertaking. We’re in the latter stages of building a 17 storey mixed-use development in Woolwich for Tesco, while in central London our team is delivering a highly technical façade retention in Farringdon for City & Guilds. We’re also making excellent progress working adjacent to the East Coast mainline to build the Newcastle Police Headquarters, which involves a mix of new-build and refurbishment of Grade-2 listed property.

“Our Interiors company is taking on ever larger projects, such as the £10 million fit-out of a new eight storey building for the London School of Economics, showing how our skills can deliver one-off refurbishments for property clients or ongoing roll-out programmes to update estates, such as our work with Travelodge.

“In our housing company we continue to complete up to 2,000 new homes a year working for RPs, private developers and our own ‘self-generated’ developments for our Regen division. The development market is a growing one for us and we are creating a formidable track-record for building homes for sale as demand in the market picks up. We’re also on the HCA’s regional frameworks, giving access to £4 billion of housing development over the next four years.”

Regen

“We have assembled a team at Regen with considerable background in development, and their output clearly is visible over the last 12 months with a pipeline of work that will enhance work volumes and margin over the next few years. This includes being on site at Prime Place in Greenwich, where we are delivering a 183 unit, 11 storey residential development with a gross development value of £58 million. We also started a ten-year £250 million programme with Poplar HARCA to transform Aberfeldy Estate in Tower Hamlets with 1,176 new homes; the first 150 are on site now.

“We’re making progress with Westminster City Council on an innovative land deal to develop 120 homes on two sites that will see the council gain a £17 million multi-use leisure facility at no cost to the taxpayer. We hope to get planning for the first site by autumn.

“Another exciting development has been our work in the market to develop homes for private rent. Based on our extensive research of the more mature private rented sector in the US, and among renters in the UK, we created a company called be:here to develop 5,000 homes for private rent, the first of which we are close to announcing.

Our model responds to the review by Sir Adrian Montague of the private rented market which made a strong case for purpose built, professionally operated private rented homes. We expect some key announcements here during 2013.”

Support Services

“Turnover grew in 2012 to £110 million (2011: £83 million), reflecting new long-term contracts being secured at Partnerships, our repairs and maintenance company, and the traction being gained through our entry into the ‘retrofit’ market.

“We now repair and maintain over 170,000 for our clients, many of whom are local authorities. These long-term contacts give us tremendous scope to invest in the very fabric of a local economy, an example being our creation of the Willmott Dixon 4Life skills academy in Birmingham. This facility, which extends skills training to both our workforce and the wider community up to 2,000 others each year, has been endorsed by City & Guilds and the British Plumbing Employers Council to provide a wide range of NVQ level qualifications. It shows the legacy our company is prepared to leave in support of local employment as a result of long-term relationship with Birmingham City Council.

“This approach was captured in our recently published position paper Transforming Communities.

“Our Energy Services company is growing having secured contracts with the Welsh Government on a programme to improve the energy efficiency of homes in North and Mid Wales, working with E.ON Energy Solutions to install external wall insulation to homes in Nottingham, plus undertaking Green Deal property assessments on behalf of the Greater London Authority, with over 450 such assessments being given in recent weeks.”

Looking to the future

“It’s been a very tough two years for our industry, at every level, and we must ensure that our supply chain is sustained to ensure that there is capacity for growth when our markets improve. We are in the process of inviting our Category A subcontractors to use a newly developed web portal in order to gain direct access to our accounts payable records for full visibility of payment records and due dates. We have over 100 signed up already.

Through innovation, supporting the ‘local pound’ and adapting our service to meet the evolving needs of clients, Willmott Dixon will remain resilient in being a sustainable, diversified business that develops its people and invests in smart initiatives to deliver the intellectual quality our clients require.”