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Profits dive at Willmott Dixon

22 Jun 16 Willmott Dixon has reported a strong rise in turnover for 2015, despite a 29% drop in house-building revenue, but a substantial drop in profits.

Group chief executive Rick Willmott
Group chief executive Rick Willmott

For the year to 31st December 2015, privately owned Willmott Dixon made a profit before tax and amortisation of £15.8m, down 39% on 2014’s figure of £25.9m. Turnover was up 5.6% to £1.33bn (2014: £1.26 bn).

Parent company Hardwicke Investments Ltd reported pre-tax profit of £4.42m (2014: £16.90m).

Group chief executive and majority owner Rick Willmott said: “It’s been rewarding to see our continued growth across all our core activities, although as we come out of what has been a tough period for our industry, this is reflected by slightly reduced profits compared to 2014.”

There is no conclusion yet to attempts to offload the facilities management businesses, which contributed £151m to 2015 turnover (2014: £143m). Rick Willmott said: “In February, we announced our intention to find a new home for Support Services that we believed would provide it with the best opportunity for future growth within an organisation that offered a greater support services focus.

“The last few months have seen a thorough process to identify a potential partner for both Willmott Dixon Partnerships and Willmott Dixon Energy Services.  Productive dialogue continues and a decision on the best way forward will be taken shortly.”

At year-end the group’s net balance sheet stood at £174.1m (2014: £164.4m) with cash and liquid investments of £80.2m (2014: £76.1m). As of March 2016, the secured forward order book was worth £1.5bn (at March 2016).

Mr Willmott provided a division-by-division commentary on his company’s 2015 performance.

Construction: turnover £866m (2014: £753m)

“Construction continues to be a ‘stand out’ business for us as a national provider of an exemplary array of built environment assets in public and private markets.  Chief operating officer John Waterman has quickly stamped his mark and style on the company and is now turning his attention to creating a further outlet for our work with more growth geographically.

“Much of our workload is generated through public sector procurement frameworks, established to ease and speed the delivery of cost effective public sector assets.

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“Construction has over 80% of its turnover for the next 12 months secured including a multitude of projects in the pre-construction phase, suggesting that the general construction market remains relatively buoyant.

Interiors: turnover £74m (2014: £74m)

“With shorter duration projects the ‘norm’ in the fit-out sector, our Interiors team has been challenged to respond by meeting two important targets – a fully secure order book for each following three month period and an 80% secure target for each following six month period. Inevitably this approach drives the need to include larger, longer duration projects in the portfolio of contracts, with the intended consequence of providing an ‘anchor’ and additional stability to a business.

“The £20m, 52-week duration project to re-fit offices at One Puddle Dock at Blackfriars for Network Rail is an example of a fantastic ‘anchor’ project for a great client. As is the £20m fit-out of the new home of the world renowned Design Museum in Kensington, a high profile project that will demonstrate extraordinary quality of design and material selection befitting of the museum and the listed building it will occupy.

“Interiors is increasingly finding its workload outside central London, particularly so being a national framework partner on the ‘roll-out’ programmes of both Travelodge and Barclays.

“The continued successful progress of Interiors is hugely encouraging; its predicted future growth in the southeast alongside Construction’s national presence will see the group’s annual contracting volumes in excess of the £1bn mark.”

Willmott Residential: turnover £231m (2014: £325m)

“The recent grouping of all our residential activities within Willmott Residential underlines our serious commitment to grow in a sector where we can make a real difference in estate regeneration by accelerating the simultaneous development of homes for sale and private rent alongside our role as a volume contact builder of homes.  The three elements of Residential, Prime Place, Be:here and Willmott Partnership Homes, provide scale, differentiation and diversity in the wider housing market; whilst at the same time bringing coordination, collaboration and synergies internally. 

“Our development businesses, Prime Place and Be:here, have become established in their respective open market sale and private rent markets in London and the southeast and have the capability and track-record to deliver both products integrated within flexible multi-tenure  developments.  During 2015, we have added to our overall development pipeline, which now stands at around 5,000 homes.”

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