Willmott Dixon warns of continued project delays
The pandemic will continue to cause delays in the supply of building materials and construction timelines this year, the group said, as it reported an 11% annual drop in pre-tax profit for 2019.
“I think we need to be realistic that output reductions linked to social distancing measures, coupled with a possible lag in the supply of some materials from overseas, will inevitably have a continued impact on project prices and programme timings in the short to medium term,” Willmott Dixon’s group chief executive Rick Willmott said in a statement today.
The group’s pre-tax profit fell to £31.3m in the 12 months ending 31 December, with revenues falling 6% year-on-year to £1.24bn, according to the statement.
However, its cash position was up to £93.1m compared to £90.5m for the full-year 2018, and net assets were up 7% year-on-year to £183m.
Willmott Dixon is the main contractor on several projects in the North West, including the £120m Stockport Interchange, a major redevelopment of the town’s bus station, and a £9m teaching centre for Oldham College, among other schemes.
The group said it was in a “strong” position to weather market turbulence caused by coronavirus due to its £1bn project pipeline and robust turnover in its construction and interiors businesses.
Revenue for the construction business stood at £1.09bn, slightly down from £1.19bn in 2018, while the interiors business grew revenues to £149m from £125m the previous year. Across the group, repeat business account for two-thirds of orders in the 12 months to December.
Rick Willmott said the company has adjusted its business to maintain operations during the pandemic, with sites remaining open and additional health and safety measures in place. Despite this, he expects continued disruption to projects, and to the industry overall.
“While we have a healthy forward order book that stands at over £1bn, it’s inevitable that some projects may be delayed or postponed owing to the current economic situation created by Covid-19,” the group chief executive said.
“We are working closely with our supply chain partners and customers to mitigate this as much as possible, while ensuring that projects starting this year now take into account the likely Covid effect.”
The 2019 performance “has provided a good platform for our company to continue delivering projects for customers during the challenges created by Covid-19,” Willmott added.
“My message to customers is that we are an industry that is very good at solving complex problems. We have shown in our response to the pandemic that we can adapt our processes to continue building safely and deliver the important infrastructure that will be a driver for future economic growth.”