Wates’ profit trebles on back of reorganisation

Wates has reported strong growth across the company in 2006, two years after it restructured itself into five divisions.

The group’s pre-tax profit almost trebled to £31.4m for the year ending December 2006 compared with £10.6m the previous year. Turnover rose 29% to £863m. Paul Drechsler, Wates’ chairman and chief executive, said his aim was to double turnover by 2012.

Wates is divided into affordable housing, fit-out, development, construction and retail. All performed well, Drechsler said.

He said Wates had avoided the problem contracts suffered by rivals by focusing on “the right customer, the right project, the right procurement and the right approach to risk”.

He added: “Most of the time when projects go wrong, it’s down to risk management and a poor early decision.”

The best performing part of the business last year in terms of profit increase was Wates Interiors, which focuses on office fit-out and refurbishment.

Pre-tax profit rose 90% on a £76m turnover.

Construction remains the biggest part of the group, with a £426m turnover. Pre-tax profit rose last year by 39%. Wates is on the national prisons framework and is also hoping to enter the Building Schools for the Future (BSF) programme.

He said Wates would be keen to work alongside “enlightened” councils, such as Birmingham, Manchester and Westminster, on BSF. Wates has just completed the £30m repair and refurbishment of Birmingham Town Hall for the city council.

Seventy-nine per cent of Wates’ work last year was repeat business and Drechsler aims to increase that to 90% by 2010.