Together Tomorrow
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WATES ANNUAL REVIEW 2018 Together we inspire better ways of creating the places, communities and businesses of tomorrow ANNUAL REVIEW 2018 wates.co.uk WATES ANNUAL REVIEW 2018 Contents The Wates Group was established in 1897 and is one of the leading privately-owned, construction, development and property services companies in the UK. We employ almost 4,000 people, working with a range of clients and partners from across the public and private INTRODUCTION sectors. Our work is guided by the purpose of inspiring better ways of creating the places, communities and businesses of tomorrow. 2018 INTRODUCTION Net assets 2018 in focus 2 EBITDA increased Profit (PBT) 136 Chairman’s Statement 4 up 1.7% to by 14% to up 1% to ‘Building Futures’ programmes Chief Executive’s Review 5 helped unemployed adults Our People 6 into work £48m £136m £35.9m Social and Environmental Sustainability 8 Wates Giving 12 Record forward OUR BUSINESSES order book: CONSTRUCTION 14 £1.601 Wates Construction 15 bn £5.4bn people (2017: £5.1bn) 300 SES Engineering Services 19 turnover Cash were supported through the £114.2m 1,500 programme in 2018, PROPERTY SERVICES 21 participants with 70% moving Wates Living Space 22 helped since into education, Wates Smartspace 25 2006 employment or training Wates Smartspace FM 26 Needspace? 27 in focus 2016 2017 2018 RESIDENTIAL DEVELOPMENT 28 Accident Frequency Rate STRUCTURE MANAGEMENT 31.8 million down 26% from 2017 at 0.035 – Wates Residential Developments Group 29 hours worked a 70% drop over five years Wates Developments 30 177 Wates Residential 31 Management 77% reduction in the Lost 7,000+ MANAGEMENT STRUCTURE 33 people Trainees and new homes under Time Injury Rate over five years 3,863 Wates Group Board 34 (at December 2018) Apprentices construction (33% reduction in number of injuries on 2017) Wates Executive Committee 36 Managed Industry-leading £360,000 facilities in health and safety GOVERNANCE & ACCOUNTS 37 donated to 2017 performance – Governance/Wates Principles 38 The Prince’s Trust 350+ 500,000+ Accounts 54 AND ACCOUNTS GOVERNANCE over 4-year non-residential homes maintained in the Accident partnership buildings social housing sector 2018 incidence rate 77% below Locations 81 31% construction reduction industry average in RIDDOR £5.5m Over 5,000 hours (HSE report 2017/18) spent with social enterprises volunteered by our people at more injuries (2017: £2.7m) than 60 projects in our communities from 2017 2 CREATING TOMORROW TOGETHER wates.co.uk 3 WATES ANNUAL REVIEW 2018 Chairman’s Statement Chief Executive’s Review INTRODUCTION I’m pleased to present our annual report for 2018. In a turbulent year for the sector and Approach Despite challenging market conditions, on 11 March 2019 the Group’s Revolving for the UK economy as a whole, owing in large part to uncertainties surrounding plans The Wates Group’s long-term aim is Credit Facility, which had never been to become an ever more sustainably for the UK leaving the European Union, we displayed strong performance in all of our drawn, was extended to £120m from £60m. profitable business by investing in the The expiry date was extended from 2022 business areas, having adhered to our clear strategic focus on construction, property development of our people, by building to 2023 and the Group was delighted to and nurturing collaborative and trusting secure the support of an additional bank. services and residential developments. relationships with our customers, suppliers The increased facility size and its and partners, and by maintaining high extended duration provide the Group levels of financial resilience. Our work is with additional liquidity and even Our success is also attributable to our Mattar left the Board in March 2019 after guided by the purpose of inspiring better greater financial resilience. being guided by a clear and strong ethos. having served as Non-Executive Director ways of creating the places, communities The Wates Group is now in its fourth since 2013. I would like to extend my and businesses of tomorrow. Housing generation of family ownership and sincere appreciation to her for her work, OUR BUSINESSES the shareholders are committed to a in particular as Chair of the Audit Safety and wellbeing Wates has a proud history in housing. In long-term perspective, with the goal of Committee. 2018 it continued to cement its position handing over to the next generation an Keeping people safe from harm and as both a major residential developer and David Allen was named as permanent even stronger, more sustainable business. creating a healthy and safe environment one of the country’s leading providers Chief Executive in April, having been wherever the Group operates is our of housing maintenance. During the year We, the shareholders, are guided by our Wembley Park appointed as Acting Chief Executive in number one priority. Since the introduction we were involved in the creation of over belief that good business, done well, is November 2017 and I thank him for the of a Group-wide Zero Harm campaign in 7,000 new homes, including city centre continues to be the key focus of our a force for good in society. Through the and the Estates Regeneration Programme excellent leadership he has demonstrated. 2016, we have seen a marked reduction flats, new build houses, retirement homes ongoing Build Yourself programme. The company’s core activities, we endeavour for the London Borough of Havering. The Executive Committee has responded in incidents. This continued in 2018 with and student accommodation units. Our Group also ran its second industry summer to leave the world a better place and Social value is central to what we do and positively to the change of Chief the Group‘s RIDDOR Accident Frequency Property Services businesses maintained camp (the first was in 2017) to enable and we aim to generate social value for the how we work and this is clearly aligned Executive and the smooth transition has Rate down by 26% from 2017 at 0.035 – in excess of 500,000 homes in the social empower those from disadvantaged communities in which we work. We also with our clients and delivery partners. reinforced that we have a strong team equivalent to a 70% drop over five years. housing sector and managed facilities in backgrounds to join the sector – 56 young continue to put great importance on at senior levels, capable of guiding the Notably, we continued to make The Group achieved a 33% reduction in more than 350 non-residential buildings. people attended the camp in 2018, with charitable giving. Wates Giving is nearly company successfully in a complex and improvements in our health and safety the number of lost time injuries reported Our Residential business enjoyed significant many drawn from among the most 11 years old, and in that time it has given challenging business environment. The performance, having reduced the number (a 77% rate fall over five years) and its growth, including the appointment to an deprived neighbourhoods in the UK. over £13.8 million to charities. In 2018, management team’s performance in 2018 of lost time injuries by 33%, and the health and safety performance led the estates regeneration programme in joint we distributed more than £1.28 million, Accident Frequency Rate by 26%. We bodes well for our continued success. industry, with an accident incidence rate During 2018 the Group’s four-year venture with the London Borough of STRUCTURE MANAGEMENT which included £240,000 in match partnership with The Prince’s Trust came have the systems and levels of awareness During 2018, I was pleased to be asked by an encouraging 77% below the industry Havering, which will deliver 3,000 new funding for Wates employees’ efforts. to an end. We are proud that through in place to enable us to continue to Secretary of State the Rt Hon Greg Clark average. homes over the next 15 years. donations from our people and support improve these numbers, as we work MP to chair a group of organisations from the Wates Family Enterprise Trust, towards our objective of zero harm. developing corporate governance Financial performance Caring for communities over £360,000 has been donated to help principles for large private companies. On behalf of the shareholders, I would Financially, 2018 was another very positive disadvantaged young people develop This effort spanned the entire calendar The Group has a deep commitment to the like to thank all our employees for their year for the Wates Group. In contrast to skills and identify opportunities for year, culminating in the launch of the communities in which it works. Our people hard work and commitment to our shared the challenging market conditions that employment. In 2018 we selected a Wates Principles in December. I’m volunteered 5,000 hours at more than interest in generating social value for the affected many of our competitors, Wates new charity partner, The Conservation especially pleased that the Wates Group 60 projects to support the communities long-term. Our people’s personal efforts, grew pre-tax profits and achieved a level Volunteers, and raised over £40,000 in has become an early adopter of these in which they live and work, and the insights and commitment are what make of turnover that was consistent with 2017. Group supported a wide range of Social the first six months of our partnership. this company great. principles. The relevant information is set Nearly 80% of Wates’ turnover is derived out on pages 44 to 47 of this report. Enterprises (SEs), spending £5.5m with from frameworks and repeat customers. SEs in 2018 (2017: £2.7m). With a record order book, Together, we have all built The Group entered 2019 with 3,863 (2017: 3,972) people and a record forward order Together with our partner Ixion, Wates growing financial strength something special in this book of £5.4bn (2017: £5.1bn).