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Exclusive: Willmott Dixon loses housing contracts as support services buyer hunt continues

Willmott Dixon Partnerships has been replaced on all or part of two major housing association contracts as the group’s support services arm continues its hunt for a buyer. 

The firm was replaced on a £147m contract with Home Group last month, with three contractors now splitting the work geographically. The contract had been due to end in 2018.

A second housing association – Guinness Partnership – has taken the major part of its 7,000-home repairs and maintenance contract for its Southern division back in-house.

Willmott Dixon won the five-year £15m contract in November 2011, with an option to extend it for another five years. But the contractor said Guinness took the decision to bring repairs in-house 18 months ago.

Willmott Dixon Partnerships has been helping Guinness with the process of bringing the work in-house and will continue to work with the landlord on “planned cyclical work”.

A Willmott Dixon spokesman said: “This is very much business as usual and happens from time to time with housing associations changing their model for repairs.”

On the Home Group contract, Mears will take over the contract in the North-west and Central North/Yorkshire region; Novus will undertake repair work for Central Midlands; and Mitie will carry out work in the newly defined Central South region.

Home Group customer service assistant director Graham Darby said the change was part of the company’s “commitment to providing a quality service for our customers and clients”.

He added: “Home Group continually review the repairs and maintenance service we offer and this involves us using other approved contractors to undertake repair work for our customers.

“We anticipate there may be some delay for customers during this transition stage and we have contacted customers informing them of this situation. We will continue our commitment to providing a quality service for our customers and clients throughout these changes.”

The news follows Willmott Dixon’s decision to put its support services division, which includes its partnerships and energy services functions, up for sale.

Willmott Dixon said the changes took place before the sale announcement and potential buyers have been told about both contracts.

It is understood that a number of buyers are interested in the division, including Wates and United Living.

Bidders are understood to have been given access to the contractor’s ‘data room’ to review the division’s work and order book.

Industry sources have told Construction News that a management buyout was being considered by senior members of the support services team.

A Willmott Dixon spokesman said the group was “not aware” of an internal team planning a management buyout, but added: “We’ve had a good response from a wide range of potential buyers; it’s possible that if a private equity company is successful then it could be on this basis.”

The contractor wants to have a buyer in place by July.

At the time of the sale announcement, the contractor said the division was being “hampered” by being a minority player in a group “rooted” in contracting and development.

Willmott Dixon Partnerships contracts include a repairs and maintenance contract with Orbit Heart of England for 14,500 homes across the Midlands, and a deal with Paragon Homes for 7,000 homes in Elmbridge and Richmond.

The division won the seven-year contract with Home Group in October 2011; The deal included an option to extend the contract for another two years.

It covered a wide range of services, responsive repairs and voids maintenance, along with planned works and gas inspections, to nearly 17,000 properties in the Central and North-west regions.

 

 

 

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