Last updated 19 April 2023
Wates Group
Wates is one of the UK’s largest and oldest privately owned construction groups. Founded in 1897 by Edward Wates and his three brothers, the group now works across a wide range of building sectors and turns over more £1.9 billion a year and employs 4,000 staff.
Financials
Turnover rose 16% in the 2022 calendar year to £1.89 billion (2021: £1.63 billion) and after trading in the red in 2020, profitability once again strengthened.
Wates registered a statutory operating profit of £36.2 million (2021: £35.3 million). At a pre-tax level firmed to £33.7 million (2021: £32.6 million loss).
To view the financials for Wates Group Ltd, visit Companies House and use Company ID 01824828.
Operations
Construction
Wates’ construction business is the largest part of the group and works across the private and public sectors and for many blue chip clients, ranging from Debenhams to the Royal Mail.
Wates works on major projects, particularly in London, including the £130 million Norman Shaw North scheme at the Houses of Parliament (Project ID: 19386217) and the £85 million 65 Fleet Street office and commercial development (Project ID: 19041786). The group is also on a number of long-term framework agreements in the public and private sector, including the £30 billion ProCure23 National Framework for Design and Construction (Project ID: 19450830) and the Ministry of Justice’s £4 billion programme for new prisons (Project ID: 15378582).
After a rise in 2019, construction turnover has subsequently dropped away but rebounded strongly to £958.2 million in 2022 (2021: £771.9 million).
Property Services
Wates Property Services was created in 2019 after a strategic review and focuses on housing and facilities maintenance. This division comprises Living Space, Facilities Management and the Smartspace business units.
Wates Living Space provides planned and responsive maintenance on social housing and maintains more than 500,000 homes in the UK for clients ranging from councils in Birmingham and Wolverhampton to RSLs such as Notting Hill Genesis.
This division was bolstered by the 2011 acquisition of affordable housing repair and maintenance specialist Linbrook Services which turned over £50 million a year and maintained over 100,000 properties. In November 2014, Wates acquired Purchase Group for £9.6 million.
Smartspace was known as Wates Interiors & Retail until March 2015, when it was rebranded Smartspace. This operation works across financial services, health, education and general public sector areas. Wates carries out fit-out work for many of the UK’s largest retail clients, including Marks & Spencer and GSK and the four high street banks, and has been shifting towards more public sector work for clients such as the BBC, HMRC and the Ministry of Justice.
In 2022, property services turnover at the group rose to £498.9 million (2021: £475.9 million).
Residential
Wates develops its own housing developments and also works for many registered social landlords, such as Genesis, Hyde and Southern Housing.
Wates is on a number of major social housing frameworks, such as A2 Dominion’s £900 million commercial contractor framework (Project ID: 20360660) and the £750 million Inspired Village framework to develop 50 new retirement communities (Project ID: 19185860). The group also works on major estate regeneration programmes including the £142 million redevelopment of Gascoigne Estate for the London Borough of Barking & Dagenham (Project ID: 21161151), the £91.2 million Ujima House development for the London Borough of Brent (Project ID: 19330577) and an £85 million regeneration of Brookhill estate in Greenwich, south London for Hyde (Project ID: 22005095).
Including shares of joint ventures, turnover in 2022 leapt to £310.3 million (2021: £268.0 million) as completions leapt to 739 units (2021: 400 units).
Development
Wates works with landowners and housebuilders to develop housing and controls more than 4,000 acres of privately-owned land, which the group is seeking to obtain planning permission. Major developments that Wates is involved with include the £226 million Northern Arc scheme in Burgess Hill, which will deliver more than 3,000 new homes (Project ID: 14266588).
In 2022, turnover rose to £123.2 million (2021: £107.0 million).
Needspace?
Needspace? provides managed workspace across London and the South East from seven centres in Clapham, Earlsfield and Islington in London and Crawley and Horsham in Sussex. In 2021, turnover increased to £3.5 million (2021: £3.2 million).
Glenigan Data
Glenigan’s data shows that in the 12 months to Q1 2023, Wates won work totalling £2,251.2 million (2022: £1,424.8 million) and was ranked in second place in Glenigan’s ranking of the industry’s top 50 contractors (2022: fifth place).
The group is ranked amongst the top 10 contractors in three of the UK’s dozen economic regions. The largest regional presence by value remains in London, provides more than a third of the national order book. With work totalling £860.4 million, Wates is ranked fourth in London. Wates also has a sizeable workload in the East of England, where work totalling £336.6 million rankled the group in third.
Wates is second in the North West with an order book of £196.7 million and fifth in the South East with orders of £245.2 million. In the East Midlands an order book of £114.7 million ranked the group in seventh and in the West Midlands, the group is eighth with £102 million-worth of work. Wates is also ranked seventh in the North East with orders of £89.9 million and fifth in Yorkshire with orders of £150.3 million. In Wales, Wates is eighth with £62.9 million-worth of work.
In the 2022 calendar year, Wates also submitted detailed planning applications to build 150 private residential units (2021: 0 units).
Conclusion: Bigger than ever
As the construction industry has moved out of the worst of the pandemic, Wates order book has surged and the group was the second largest building contractor in the UK by work won in the 12 months top Q1 2022 according to Glenigan’s research.
The focus is almost exclusively on building work. Education work is strong and Wates had 17 schools under construction in 2022. Exposure to London remains large with the capital providing 38% of the latest order book by value but the regional presence is expanding with Wates among the top 10 contractors in nine regions – up from three a year earlier.
The group appears to be taken on larger projects, particularly in the capital. The average contract award in the 12 months to Q1 2022 was valued at £17.2 million by Glenigan (2021: £31.7 million), but in the capital this measure was £26.9 million. This measure looks set to rise with the group’s own figures putting the average project value in 2022 at £43 million.
Construction turnover had fallen for two years ago but has now rebounded as a restructuring in 2021 into four regional sectors and entering new markets, such as healthcare, paid off.
In 2022, the average number of employees at Wates grew to 4,021 people (2021: 3,810 people), and the wage bill increased by 14.6% to £255.6 million (2021: £228.0 million) but at the 2022 year end, the group had no bank loans. There was an overdraft of £54 million bank overdraft but year-end net cash remains strong at £152.9 million (2021: £158.9 million) and the group is set to remain one of the industry’s biggest players for the foreseeable future.
Winning Work With Wates Group
Wates became a member of the Considerate Contractors scheme in 2008 and has won a number of awards through this scheme. The group runs a sustainable construction procurement process aimed at ensuring less waste, better value, increased certainty and continuous improvement and uses Constructionline.
In 2011, Wates began a five-year supply chain strategy called ‘closer to fewer’, which is aimed at providing a longer-term procurement strategy to help subcontractors understand how much work they can win and to then invest in new technologies. A reduction in subcontractors is also allowing Wates to record more accurate data in terms of waste and carbon reporting. Materials suppliers are encouraged to source materials responsibly as more procurement shifts overseas, particularly China for materials such as photo-voltaics, and India.
Wates enforces sustainability standards across the group and 96% waste is diverted from landfill but the reduction in subcontractors has also seen the number of specialist waste suppliers used by Wates cut from 134 in 2006 to around 30. Information on the supply chain at Wates can be found here.
Key Wates procurement contacts include:
Group procurement director – David Oates, tel: 0161-946-8800
Design director – Andrew Barraclough, tel: 020-7630-4410
Andrew.barraclough@wates.co.uk