Willmott Dixon’s profits fell by a quarter in 2012 as the family-owned firm reported what it expects to be the “toughest year” in the downturn.
The company is also slowing down its fast-growing social housing maintenance division so the business can “catch its breath” after some difficult contracts.
Overall the group said results were “reasonable”, despite parts of the business being “stretched”.
It held its turnover above £1bn, maintained its order book and continued to diversify and grow its housing arm.
Pre-tax profits fell 26 per cent from £21.1m to £15.6m. Before amortisation and taxation, profits were £20.6m, returning a 1.9 per cent margin. Cash was up from £66.7m to £68m, while the firm had £84m of net current assets.
Capital works provided £903m of turnover, including £641m in construction. The firm said construction could secure a solid platform of work if it wins Scape – which Construction News reported it had last month. But the company said this was being done at “extremely competitive prices”.
It said it was seeing an ongoing drop in contract value, but highlighted key schemes including the £85m Tesco development in Woolwich.
The company said interiors remained a modest but under-explored market, while it was focusing on growing its Regen business. It added that its private rent product had moved on “considerably”.
But support services made the least progress, with Willmott Dixon Partnerships preoccupied with “turnaround” on a number of new housing maintenance contracts, which have proved more challenging than expected and taken up “disproportionate resource and management time”.
It said the business was now “catching its breath” until that process is complete.
The group needed to hire 400 extra staff after winning £300m of work, though it turned over £110m in the year.
The firm said its energy business was in the opposite position and had made excellent progress with low energy retrofit.
The company also continued its drive to be a carbon-neutral firm and has funding from DCLG for an industry-led project called Design vs As-Built Performance Gap to gauge energy consumption of new homes.
Overall Willmott Dixon expected 2013 to be “another very tough year” but said it was well positioned to capitalise on opportunities.