Wates Group proves resilient in the downturn as sales increase by 7pc

The family-owned business, which is behind Doncaster Council’s new £20m Civic Office building, said its underlying pre-tax profits were £29.3m for the year ending December 31, 2012. This represents an 11 per cent drop on the previous year’s figure of £32.9m.

Its underlying pre-tax profits and margin, of 2.7 per cent, are before re-structuring costs of £4.9m and profit on the sale of investments of £1.3m in its 2012 financial year.

Taking these into account, pre-tax profits amounted to £25.7m, down from £40.1m in 2011 – a 36 per cent decrease.

The group said it recorded a turnover of £146.5m in Yorkshire and the Humber in 2012.

Wates employs more than 2,600 people, after a decline in headcount of 283 in 2012, according to its annual report.

Phil Harrison, managing director for Wates in the Midlands and North, said: “It has been a tough year for the construction industry but we have met our economic challenges with adaptability and resilience to continue to deliver value for money for our clients.

“The 2012 results demonstrate our long-term focus on financial stability and sustainable business growth, giving our customers the confidence in our position as a responsible and trusted contractor.”

Paul Drechsler, chairman and chief executive of the Wates Group, said: “Reduced demand for construction, some unsustainable pricing by competitors and an increasing number of supply chain failures combined to create the most demanding trading conditions in 2012.

“This, together with some operational challenges, placed pressure on our margins in the construction business.”

This year has seen Wates complete the £10.7m rebuild of Campsmount Technology College in Doncaster. Current projects include the new £29m Dixons Allerton Academy and the £5m extension to BBG Academy, both in Bradford.

It is also currently delivering Kirklees Council’s Excellent Homes for Life project, which will see the creation of 466 new homes across the district.

Mr Harrison added that the business had had “a positive start to 2013”. Wates Group said in its 2012 financial results that its order book remains “robust” at £1.6bn.

Group net cash at the end of 2012 was £121.3m, compared to £132.1m in 2011, while net assets increased to £70.2m from £64.3m.