Willmott Dixon has reaped the rewards of focussing on its core construction and fit-out business with another jump in profits and turnover.
In its first full results since the demerger of Be Living and Fortem subsidiaries at the beginning of 2017, Willmott Dixon has reported a 14% jump in pre-tax profits to £35.5 million for the year to December 31 2017 on turnover up to £1.3 billion from £1.22bn.
Group chief executive Rick Willmott believes the simplification of Willmott Dixon’s business model will be replicated throughout the sector.
He said: “Since Willmott Dixon demerged Be Living and Fortem at the beginning of 2017, we’ve made great progress in our strategy to focus solely on our primary capability of being a constructor of choice for our customers. This is especially the case as we can provide access to procurement routes and solutions tailored to meet their needs for value and efficiency.
“The move to focus on our core business of construction and fit-out is consistent with what I think will be a general trend towards de-layering and simplification of business models in the construction sector. We have chosen to clearly structure our business around core competency, working with customers to ensure we deliver not only great capital projects but also social value and community benefit working through the best supply chain partners. It gives us the shape and balance to continue being well placed to respond to inevitable future changes in how our industry operates.”
Mr Willmott added: “One way we are moving forward in how we serve customers is our ability to add real value through long-term, repeat-business relationships through our place on major frameworks like Scape Group’s National Construction Framework and the Southern Construction Framework.
“This will be further enhanced by our recent selection by Places for People’s Procurement Hub as sole contractor on its newly created Major Projects Framework, which has the potential to deliver £2.5bn of construction work over the next four years.
“A big focus of our work through these frameworks is supporting SMEs and strengthening local economies, with our company able to take a collaborative approach to supply chain selection with each customer. For example, on our current work with Scape, around 80% of project spend is with companies based within 40 miles of the project, while 90% of overall project spend is with SMEs.
“In terms of best value for the public purse, single source frameworks also provide particular benefits in that they give customers a streamlined, consistent procurement process to gain access to experienced contractors already officially vetted for quality, durability and competitiveness.”
On being one of only six companies in the UK to win a Queen’s Award for Enterprise in the category of Promoting Opportunity through social mobility, Rick highlighted Willmott Dixon’s wider goal to strengthen society’s well-being.
He said: “I firmly believe we have a purpose beyond profit which is to use the culture and values of our organisation and the energy, passion and commitment of our people to improve the life opportunities of people.
“Last year, nearly 80% of our people took part in some form of activity that left a positive legacy in their community, with almost 50,000 work time hours spent on activities aimed at improving the life chances of people. This equated to over one% of our people’s work time devoted to supporting others, equivalent to £900 invested per employee and £1.95m overall. Through the Willmott Dixon Foundation, we aim to improve the life chances of 10,000 young people by 2020.”
Talking about how Willmott Dixon plans to tackle the diversity challenge in construction, Rick added: “Our future growth is reliant on attracting, retaining and developing the very best talent and for us that means properly addressing the gender gap. We are making big strides with encouraging more women to enter the industry by reaching out to millennials; 38% of Willmott Dixon’s 2017 management trainee intake – our future leaders – were women.
“However, we’re still missing out on a huge pool of untapped talent, and that’s why we aspire to achieve gender parity by 2030. Creating a more diverse workforce is a strategic priority for Willmott Dixon.”
Talking about other industry factors for the year, Rick said: “We are mindful of the challenges created by the effect of Brexit on our supply chain’s work force and the impact of exchange rate fluctuation on the costs of imported materials and products. However, we are confident these matters are better understood than twelve months ago and indeed ‘priced in’ to our workload assuming a ‘soft’ Brexit in 2019.
“We are also watching closely the possible on-going consequences and implications for the construction industry in the wake of the Hackitt Review and following the demise of Carillion.”