Construction contractor Willmott Dixon has published half-year results (unusually, for a privately-owned business) and they show the business to be trading at a profit.
After making pre-tax losses of 拢8.7m in 2022 and 拢14.4m in 2023, Willmott Dixon has made a pre-tax profit of 拢10.0m in the first half of 2024 (2023 H1: 拢1.3m loss).
For the six months to 30th June 2024, turnover was slightly down at 拢561.1m (2023 H1: 拢589.0m). Of this, 69% was taken via long term frameworks
Chief executive Graham Dundas, who took over from Rick Willmott in January, said that the results were ahead of the board鈥檚 expectations.
鈥淚鈥檓 pleased to start with the excellent news of a prompt and healthy return to profit for the business after a difficult 2023,鈥� he said. 鈥淲hile market conditions remain competitive, both profit and turnover are ahead of our forecasts, underlining my confidence in our ability to deliver profitable long-term growth.
鈥淭he first half of the year has seen a strong all-round performance from the group, with each of our subsidiary companies materially contributing to the profit delivered.
鈥淥ur strong start to the year is further illustrated by cash at the bank of 拢109.3m, with shareholders鈥� funds increasing to 拢166.0m (FY23: 拢158.8m). We have a robust, debt-free balance sheet and access to committed bank facilities of 拢30.0m, with an additional 拢20.0m accordion provision.鈥�
Dundas continued: 鈥淥ur secured order book and future pipeline has never been stronger, exceeding 拢3bn in total for the first time. Willmott Dixon agreed over 拢1.0bn of new orders by August and 98% of budgeted workload for 2024 is now contracted. This underlines both the high demand for construction work, and our success in overcoming the challenges of a tough macro-economic environment, such as the high inflation which delayed several projects over the last 18 months.
鈥淚n addition to a record secured orderbook, we also have preconstruction appointments on projects expected to deliver a further 拢1.5bn of work once successfully converted into main contract awards.聽 This growth in orders comes whilst remaining very selective in our bidding activity; our projects remain predominantly with valued repeat customers and in sectors where we have a proven track-record of success.鈥�
He said that the workload was balanced across core markets, particularly leisure, housing, regeneration, education, healthcare (new-build and fit-out) and heritage property restoration.
Dundas said that Willmott Dixon鈥檚 strategy of focusing on frameworks and selective bidding was key to the company鈥檚 success.
He explained: 鈥淭he recent demise of ISG was both shocking and sad; while we operate in a competitive industry, no one likes to see another company fail. Its failure does, however, further underline why our approach to risk and selective bidding remains crucial to our long-term success. We believe our repeat business and long-term relationships, as well as our stringent internal processes, are critical in this regard.
鈥淎longside the failure of ISG, the requirements of the Building Safety Act will see a further shift in customer mindset from 鈥榣owest bid鈥� to 鈥榖est quality鈥� in analysing tenders, with additional scrutiny placed on a company鈥檚 financial robustness.
鈥淲hile we await the new government鈥檚 spending review, scheduled for spring 2025, demand for capital projects at national and local level will continue to drive new opportunities. As these come out for procurement via our frameworks, we will only bid for projects where we have the right resources and capabilities to deliver.鈥�
He concluded: 鈥淥ur focus on operational excellence and healthy pipeline means we are on track for returning to full year profit in 2024 and growth in 2025. We are emerging as a stronger business with the challenges of 2023 behind us. However, while positive and cautiously optimistic, we are not complacent.鈥�
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