Last updated 7 February 2023
VolkerWessels UK
VolkerWessels is the UK operation of the Dutch-based group of the same name, which has a global annual turnover of €6.2 billion. In the UK, VolkerWessels established its operations through acquisition and subsequent expansion and employs more than 3,500 people in the UK, where turnover is more than £1.1 billion a year.
Financials
In results filed at Companies House for 2021, revenue at the UK operations of VolkerWessels rose to £1,151.8 million (2020: £1,082.2 million) and the business returned to the black with a pre-tax profit of £27.1 million (2020: £6.4 million loss). At an operating level, the group returned a profit of £27.8 million (2020: £5.6 million).
At the parent VolkerWessels group, revenue in 2021 slipped 4% to €6,193 million (2020: €6,448 million) but earnings before tax rose to €225 million (2020: €153 million).
To view the financials for VolkerWessels UK, visit Companies House and use Company ID 01179305.
Operations
VolkerWessels UK has its headquarters at Hoddesdon in Hertfordshire and works in civil engineering, particularly rail, highways, airports, marine, energy and water, and also in commercial and industrial building. The group has five individual trading divisions: VolkerFitzpatrick, VolkerRail, VolkerStevin, VolkerHighways and VolkerLaser.
In 2018, VolkerWessels UK acquired slipform concrete contractor PJ Davidson, which had an annual turnover of £14.1 million.
VolkerWessels works in joint venture with other contractors, such as Boskalis, Morgan Sindall and Kier and consultants including URS, in particular in the civil engineering sector, where the group has significant exposure. VolkerWessels is Siemens’ construction partner and has long-standing experience working at the UK’s airports that dates back to Fitzpatrick’s work on airfields after World War Two.
The group works on major schemes including the £174 million Eastbrook Studios – Sound Stages in east London (Project ID: 21415715) and the £205 million Rother Tidal Walls East in East Sussex (Project ID: 22064599).
Rail is a major sector with work ranging from HS2 to train depots for Thameslink, Crossrail and the Intercity Express Programme and the extension of Gatwick Airport station. VolkerWessels is working on major programmes of work such as the £7.5 billion CP6 Major Signalling Framework (Project ID: 19125978).
The group works on a number of long-term agreements, ranging from Manchester Airport Group’s £750 million major capital works framework (Project ID: 19074348) to the Department of Health’s £30 billion Procure 23 National Framework (Project ID: 19450830).
In 2021, the rail sector again produced the largest revenue of £469.1 million (2021: £412.3 million) ahead of highways and infrastructure, where turnover fell to £346.4 million (2021: £335.3 million). Revenue from commercial building including education work leapt to £170.4 million (2020: £117.1 million) but turnover from the marine and energy sectors again, dropping to £165.9 million (2020: £197.4 million).
Glenigan Data
In the 2022 calendar year, VolkerWessels won 57 contracts valued at £250,000 or more (2021: 91). The total value of these contracts, which does not include framework agreements, was £1,049.0 million (2021: £1,107.5 million) and this ranked VolkerWessels in tenth position in Glenigan’s ranking of the UK’s top 50 contractors (2021: eighth).
VolkerWessels is ranked amongst the top 10 contractors in three of the UK’s 12 economic regions in 2021. The biggest exposure was in the South East, where orders totalled £383.0 million and the group was ranked fourth in Glenigan’s regional Top 10. VolkerWessels topped the table in the West Midlands with an order book of £155.8 million. In the East Midlands, orders of £127.8 million saw the group ranked in sixth place
Conclusion: Well placed
Contracting work, particularly in construction can be a risky business and this risk is not always supported by the stock market, which made the delisting of the group from the Euronext exchange in April 2020 a positive move, particularly as trading has subsequently rebounded strongly.
The delisting came after the group’s largest shareholder, Reggeborgh, which is a vehicle for the Wessels family, secured 97.79% of the shares in March 2020. By September 2020, the Wessels family had regained 100% control.
The UK remains a major part of the group’s myriad holdings remain to be seen and the prospects look strong as with state investment in infrastructure expected to continue during an otherwise muted 2023.
Rising labour and material costs have dampened prospects for the industry and Glenigan’s data shows VolkerWessels’ order book slipping 5% in 2022 but the group maintained its place – just – in the rankings of the UK’s top 10 contractors.
The fall in workload came primarily in the civil engineering sector, where orders fell 17% to £650.0 million (2021: £780.6 million). In the building sector, work rose to £399.0 million (2021: £326.9 million). The figures do not include framework agreements, which in the longer-term will also provide more work. The government’s proposed spending of £27 billion on road works and VolkerWessels is well placed to benefit.
Including framework agreements, VolkerWessels won £109.5 million-worth of roads-related work in 2021 (2021: £479.0 million) and was ranked in 14th place in Glenigan’s rankings of the UK’s top highways contractors (2021: sixth).
The group does however also work on major infrastructure projects such as the Rother Tidal Walls East, which have driven up the risk profile. The average overall contract award in 2021 was valued at £18.4 million by Glenigan (2021: £12.1 million).
VolkerWessels is well placed going forward in a number of other infrastructure including flood defences, where the government is investing £5 billion in flood defences in the wake of the 2019/20 winter floods. The group has experience in this sector often in the VBA joint venture with Boskalis and Atkins and takes on major schemes, such as £131 million Southsea Water scheme (Project ID: 17300837).
Elsewhere, the start of the next round of spending from the water utilities began in 2020 and VolkerWessels is working on major AMP7 programmes, such as Severn Trent’s £2.3 billion framework (Project ID: 17318750).
After trading at a loss in 2020, costs were cut but with turnover rising and the group’s own figures showing forward orders steady at £1,769.2 million (2020: £1,743.1 million), the average number of employees rose by 8% to 3,514 (2020: 3,263 people). This pushed the wage bill up by nearly 10% to £202.3 million (2020: £184.5 million) but cash and cash equivalents still rose to £136.2 million (2020: £102.1 million).
Going forward, VolkerWessels is well placed in key sectors and, as a leading contractor with the backing of a major European owner, in a strong position to weather a delicate period for the UK construction industry.
Winning Work With VolkerWessels UK
VolkerWessels is a member of the Safety Schemes in Procurement and an associate member of the Considerate Constructors scheme. The group’s corporate responsibility vision focuses on four key areas: marketplace, workplace, environment and community.
Sub-contractors that employ more than five or more people must be registered with Constructionline and hold a valid Safety Schemes in Procurement certificate. VolkerWessels also works with the Supply Chain Sustainability School and information on this can be found here. Companies that want to express interest in working for VolkerWessels can register here.
Key VolkerWessels procurement contacts include:
VolkerFitzpatrick head of procurement – Gary Coles, tel: 01992-453500
Gary.coles@volkerwessels.co.uk
VolkerFitzpatrick procurement manager – Andy Swift, tel: 01992-453500
Andy.swift@volkerwessels.co.uk
VolkerHighways senior estimator – James Bedford, tel: 01992-453500
James.bedford@volkerwessels.co.uk
VolkerStevin marine manager – John Lovell, tel: 01772-708620