Wates interim chief executive David Allen has told Construction News the firm is happy for its £2bn turnover by 2020 target to be pushed back to 2022.
“If you draw a straight line from our results in 2014 to now then we’ll be there or thereabouts by 2020,” he said, speaking to CN following the publication of Wates’ results for the year to 31 December 2017 on Monday.
“But we don’t mind if we get there in 2019, 2020, 2021 or 2022.”
Its accounts showed turnover increased 6 per cent from £1.53bn in 2016 to £1.62bn last year; however, pre-tax profit was relatively flat at £32.9m.
Mr Allen said: “It’s not about growth at any cost; it’s about the right kind of growth and profitable growth.”
Chairman James Wates added: “We’re very much focused on the long-term perspective and we’re going to drive that long-term agenda.
“We’ve been around for 121 years and we want to keep that going.”
Wates would need its annual turnover to increase by an average of 7.8 per cent annually over the next three years to hit £2bn in 2020.
Mr Allen said that, overall, the firm had enjoyed “a really, really good year” in 2017 thanks to “steady progressive growth”.
He said the firm had also avoided incurring losses as a consequence of Carillion’s collapse.
Wates’ M&E arm SES had been working for Carillion on a number of jobs, including Barts Square and one of Google’s offices, both in London.
Mr Allen said the company had approached the clients directly after the firm entered liquidation.
He said: “In the days following Carillion’s collapse we reached out to the ultimate clients on the jobs we were working on and we were able to come to pragmatic arrangements with each of them, allowing us to finish our work for them and give them a quality product, which means we have not been impacted negatively by what happened.”
This was without main contractors’ involvement, he confirmed.
Mr Allen said the company had not tried to take over any of Carillion’s contracts yet, but that there were public sector maintenance jobs it would be interested in when they are re-procured.
However, he acknowledged that one consequence of Carillion’s demise was clients and suppliers becoming more particular about who they work with.
Mr Allen said: “We’ve noticed clients are even more focused than normal on working with businesses that are financially strong and are able to take a long-term view, like ours.
“And it’s the same with suppliers. They want to be sure they’re going to be paid and therefore need to be sure their main contracting customer is going to be around for the long term.
“And they want to work with companies that pay promptly and a scrupulous in the terms of the contracts, as we are.”
Mr Allen said the average time Wates took to pay subcontractors had fallen from 32 days in 2016 to 27 days in 2017.
Looking ahead, Mr Allen said he saw opportunities for growth in public sector housing and regeneration, along the lines of the 12-year, £1bn scheme it agreed with Havering this month.
Private residential is also an area the Wates is targeting, with Mr Allen highlighting the firm’s work with Quintain on its Wembley development.
“We’re thrilled to still be working with Quintain and talking to them about future work there [Wembley],” he said.
Wates boss: We’re happy to hit £2bn by 2022