• Pre-tax profit at £21.1 million (2010: £26.6 million)
• Turnover past £1 billion barrier at £1,052 billion (2010: £989.5 million)
• Net 2011 balance sheet of £144.7 million (2010: £142.9 million)
• Cash and liquid investments at £66.7 million (2010: £62.2 million)
• Secured forward order book at £1,185 billion
• 77% of Group’s budgeted work secured for 2012
• Energy Services secures major contract
• Balanced workload between public and private sectors
Group chief executive Rick Willmott says:
“While it’s a substantial milestone in our 160 year history to become a £1 billion turnover company, our reduced profit for 2011 also reflects the tough market we are in where margins are now being squeezed. The lack of funding in the public sector together with a lack of confidence in the private sector is placing pressure on workload volumes. That said, our strategy to focus Willmott Dixon on new areas of growth, especially in the green economy, to re-balance our work equally between public and private sectors and develop a pipeline of opportunities in our development division Regen, which will also benefit our Capital Works division, is gaining real traction.”
Talking about the first major contract for the recently launched Energy Services brand, Rick said, “I’m delighted we’ve secured a £17 million contract to manage the retrofitting of 2,000 homes in Wales for the Welsh Assembly that will take hundreds of families out of fuel poverty. This follows our selection by DECC to be a Pioneer Green Deal Provider, which goes live in the autumn, and reflects our investment in the development of processes and skills to play a significant role in improving the energy efficiency of property through mechanisms like the Green Deal.”
Talking about the three operating divisions, Rick says:
“While our contracting, housing and interiors’ companies are maintaining market share, it remains a tough environment with reduced availability of work and increasing margin pressure.
“We are active on a number of major frameworks including Scape where our standardised concept Sunesis, developed in partnership with Scape to cut the cost of new schools, has already created over £100m of inquires, with many projects now at planning stage and a number under construction. We intend to launch a leisure sector version of Sunesis this summer as innovation is key to delivering ‘more for less’ to our customers in this competitive market.
“Sustainability know-how is also an important differentiator. Two examples are our role building one of the UK’s largest Passivhaus residential developments in Camden and first zero carbon ‘in use’ school, Ashmount Primary School in Islington. Our knowledge of building sustainable, energy efficient property is something that more and more customers want to talk to us about as it creates real value, such as our role in creating the first BREEAM outstanding health facility, in Sunderland, to reduce operating costs.
“Our work is balanced 70/30 between public and private sectors and what clients appreciate is our ability to blend skill-sets on large projects, something best illustrated by our project to build Woolwich Central, where we are using our contracting, house building and interior fit-out skills to deliver a £86 million project for Spenhill that includes a 80,000 square foot Tesco superstore and 259 apartments. Similarly, the scale and scope of our interiors work is increasing, exemplified by our £10 million contract to fit-out a new eight-storey building for the London School of Economics.”
“We’ve been diligently creating a £500 million pipeline of opportunities through our Regen development company, providing high quality project opportunities for our Capital Works division.
“We are currently regenerating Dee Park estate in Reading over eight years to provide over 700 homes as well as developing over 100 homes at Brenley Park in Mitcham, with both showing strong sales through a combination of good location and sensible pricing. Our ambition and skill-set to undertake mixed-use development is further underlined by our position as preferred bidder with Morrisons to develop a 1.5 hectare site in Walthamstow town centre into retail and residential use. We also secured the £60 million residential element of a regeneration in Greenwich as part of a development agreement with Cathedral Group Plc and Development Securities Plc which will be on site during 2012.
“We want to work in partnership with local authorities to help them realise the asset value and economic potential of their land. We have put a concerted effort into developing a model for the private rented sector that can help local authorities and private land owners get the best use of land to generate much needed income.
“Our goal is to establish a portfolio of homes for market rent in joint venture with land owners and we are in detailed talks with Birmingham City Council, which this year gained cabinet approval to join the LLP we have created with WM Housing Group to build 400 homes near the centre.”
“Our repairs and maintenance company Partnerships had one of its most successful years, securing long-terms contracts with Home Group, Affinity Sutton, ACIS and Guinness South. We are now responsible for the maintenance of over 150,000 homes across the country and believe that our investment in skills development, systems, processes and technology, matched with our focus on working closely in local communities to create jobs through initiatives like apprenticeships, is creating real value for our clients.
“We have also launched our Energy Services company to focus on the tremendous opportunity to reduce energy costs in property through initiatives like the Green Deal.
The first major contract, awarded this month, will see Energy Services manage the retrofit of 2,000 homes in mid and north of Wales in a three year programme. Our role on this ERDF funded Arbed programme includes managing the surveying, designing, costing and delivery of work to individual homes as part of Wales’ strategic energy performance investment programme to reduce the carbon footprint of its housing stock and future-proof homes against rising energy prices. Our work last year on one of the UK’s first Green Deal pilot projects to retrofit private homes in South Cambridgeshire also gave us an enormous amount of learning we are taking to this new project.”
On the subject of Willmott Dixon’s sustainability aspirations, Rick says:“We are totally committed to being a company that is sustainable in everything we do. I’m pleased to say that in 2011 we diverted 96% of our site waste away from landfill and this strategy means that since 2008 we have saved £2.8 million in potential disposal costs and landfill tax. Our strategy to reduce carbon emitted by our fleet of transport saw the company paying out £77,000 in incentives for staff choosing more carbon efficient cars, with 10,000 miles claimed through our bicycle mileage reimbursement scheme.
"Being sustainable makes good business sense; we estimate that proactive interventions through our Carbon Management Plan to reduce the cost of energy use in our business will reduce our predicted energy costs in 2014 from £13 million to below £10 million.
"Looking to the future. With public sector clients now going through severe budget cuts and private sector confidence fragile outside London, UK contracting is in the midst of the recession it’s been predicting since 2010. Falling work volumes combined with acute margin pressures will see our industry face the hardest phase of the downturn as work procured now will define performance over the next 2-3 years. Willmott Dixon will meet this challenge by sticking to its core principles of being a sustainable, diversified business that develops its people and invests in smart initiatives to meet our customers’ needs for better value and rationalisation of assets.”