Wates Group reports highest-ever turnover of £2.18bn

Despite a challenging external landscape of high inflation and interest rates, and disrupted supply chains, Wates Group has reported the highest-ever turnover and underlying profit in its 127-year history.

With turnover of £2.18 billion, an increase of more than 15 per cent on last year, the Group has exceeded the £2 billion mark for the first time, alongside a profit before tax of £46.2 million. The company also ended the financial year with a record forward order book of £8.54 billion. 2023’s financial results mean that Wates has delivered PBT (profit before tax) consistently, every year, for over two decades.

The Group also reports it has made significant investments during the year, resulting in a lower net cash position than in 2022, of £138 million. This included continued investment in its House Building Joint Ventures portfolio. The Group’s £90 million revolving credit facility remained undrawn at the year-end. The company also increased its total tax take on behalf of the Exchequer to £387 million – a 23 per cent increase on last year.

During the year, the Group also delivered two of its 2025 social value targets ahead of schedule. The Group’s strategic spending with social enterprises, which multiply the company’s impact in communities where it operates, reached £31 million since 2020, exceeding the original 2025 target of £25 million.

Wates also delivered triple its 2025 target for engagement with the sector’s future skills pipeline, supporting 80,000 young people in primary and secondary schools to consider a construction career since 2020, against an original target of 25,000.

In the same year as it delivered record turnover, the Group reduced its scope 1 and 2 emissions by 45.3 per cent against a 2019 baseline. This compares with its near-term (2030) science-based target of 46.2 per cent. The Group also had its long-term (2045) greenhouse gas emissions target validated by the Science-Based Targets initiative (SBTi) and, at the end of 2023, appointed Cressida Curtis to the new role of Group Sustainability Director.

Across the business, results were strong.

The Property Services business increased turnover to £545 million in 2023. The housing maintenance business, Living Space, launched a dedicated healthy homes team and cemented its position as a leader in social housing retrofit by working with 17 social landlords to secure  £100 million of Social Housing Decarbonisation Fund (SHDF) Wave 2.1 funding.  Its specialist fit out and refurbishment business, Smartspace, retained all its key customers and secured its two largest-ever contracts, both with repeat customers.

The Facilities Management business also increased its turnover by 19.2 per cent, with most of the growth coming through contract renewals and extensions. It secured a notable contract with Yorkshire Building Society, and extended its next generation maintenance partnership with JLL.

Wates’ Construction division reported £1.17 billion turnover, up 22 per cent from last year, and secured £1.1 billion in new work, with a highest-ever average project value of £48.3 million.

Turnover in the Group’s Residential business increased by £13 million on 2022 figures, to reach £323 million, delivering 276 homes over the year with more than 3,000 homes under construction.

The Developments Group continued its strong performance in 2023. It secured its highest-ever profit before tax, alongside a turnover of £147 million, an increase of 16 per cent on last year. This represents one of its strongest results in two decades.

Eoghan O’Lionaird, Chief Executive Officer, Wates Group, said: “Despite a challenging external environment, we delivered a strong performance last year. Whilst it’s great to pass the £2 billion turnover mark, it’s just as encouraging to see an increase in profit. Our stable family governance and clear purpose have provided a firm foundation upon which we continue to go from strength to strength.

“We are in an excellent position, with profitability across all parts of our business, a solid cash balance and a positive tangible net worth. Our record forward order book demonstrates our customers’ confidence in our ability to deliver projects of all types and sizes. This confidence is hard-earned, with Wates delivering profit before tax every year for more than two decades.

“We are also just as proud of our contribution to society as we are of our bottom line. I’m delighted that in 2023 we exceeded some of our social value targets set for 2025. We have now been able to set even more ambitious targets to increase spend with social enterprises and engage more young people in the great work we do, to make sure everything we do brings benefit to the communities we serve.”