5375WD Annual Report
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m o c . d l o g d a e r h t - n e d a r b . w w w y b r e p a p s e v i L 9 o t n Registered office: o d e t n Spirella 2, Icknield Way i r p y Letchworth Garden City l b a n i Hertfordshire SG6 4G Y a t s u s d n Telephone: 01462 671852 a d e n Fax: 01462 681852 g i s e www.willmottdixon.co.uk D putting people first building a low carbon future communities responsible business relationship focused regeneration a great place to work proud to be private preserving our environment openness deep rooted values integrity and trust entrepreneurial visible Contents Directors and Officers 2 Summary of Results 3 Group Chairman’s Statement 4 Group Chief Executive’s Report 10 Sustainable Development 28 Report of the Directors 37 Statement of Directors’ Responsibilities 39 Report of the Independent Auditors to the Members of Willmott Dixon Holdings Limited 40 Consolidated Profit and Loss Account 41 Consolidated Balance Sheet 42 Company Balance Sheet 43 Consolidated Cash Flow Statement 44 Reconciliation of Movements in Equity Shareholders’ Funds 45 Notes on the accounts 46 Locations 68 1 Willmott Dixon Holdings Limited Directors and Officers Colin Enticknap Rick Willmott Chris Durkin John Frankiewicz Group Chairman Group Chief Executive Director Director Chief Finance Officer Duncan Canney Secretary and Registered Office Wendy McWilliams Spirella 2, Icknield Way, Letchworth Garden City, Hertfordshire, SG6 4GY Registered Number: 198032 Auditors PKF (UK) LLP Andrew Telfer Jonathon Porritt Christopher Sheridan Farringdon Place Director Non-Executive Director Non-Executive Director 20 Farringdon Road London EC1M 3AP 2 Summary of Results Year Ended 31 December 2009 2009 2008 £000 £000 Group turnover 998,946 592,446 Operating profit excluding amortisation 20,344 9,961 Operating profit 17,155 9,961 Profit before tax excluding amortisation 21,372 11,971 Profit before tax 18,183 11,971 Net current assets 73,179 28,983 Equity shareholders’ funds 137,619 30,915 9 8 0 0 9 0 0 0 2 2 8 0 0 2 0 6 6 2 4 4 5 9 4 1 5 , , 6 1 8 2 , 9 9 9 , 7 9 5 9 1 Operating pro!t Group turnover £000 £000 3 Group Chairman’s Statement Overview 2009 has been something of a mixed year. Market conditions have continued to deteriorate but not as quickly nor as sharply as we expected, with businesses like ours – heavily reliant upon public sector investment – undoubtedly benefiting Colin Enticknap, from government’s continued support for the FCIOB, MRICS economy through high levels of public spending. That said, we have seen progressive signs of an inevitable shift in policy; with spiralling public sector debt and growing debate surrounding national credit ratings, all political parties now seem to be agreed on the need for severe cuts in As part of this process we decided public spending. The only remaining questions to exit the generic nationwide revolve around when, where and how deep? maintenance market to occasional Whatever the answers, we shall almost certainly private sector clients, where reducing start to feel the effect once the May election sales volumes could no longer justify results are announced. the national infrastructure required. Whilst such decisions are never easy With this in mind, we have naturally continued to or cheap to make, it has already paid concentrate on filling our order books, and with dividends, eliminating an unhelpful some success; as these accounts were closed we management distraction and had succeeded in securing over 84% of our allowing us to reallocate valuable budgeted workload for 2010, allowing focus to resource into more productive areas. shift towards the more difficult challenge of 2011. More disappointingly, and alongside Just as importantly, we have also completed the most other major contractors, we re-shaping of our Group, integrating all subsidiaries were faced with an unjustified and under the Willmott Dixon name, and within three exorbitant fine from the OFT in more streamlined operating divisions: relation to their investigation • our Capital Works division containing our into the practice of cover pricing – three design & build businesses, Willmott Dixon acknowledged by them to have been Construction, Willmott Dixon Housing and endemic across the UK construction Willmott Dixon Interiors, each supported by the industry for many years. Whilst we sustainability experts within our ‘Rethinking’ team; seriously considered appealing their decision, our concern that • our Regeneration division containing our reputational damage from protracted two development businesses, Willmott Dixon publicity could potentially have Homes and Willmott Dixon Developments, caused more damage than the fine alongside our two property investment itself, led us to decide otherwise. businesses, Willmott Dixon Investments and Willmott Dixon Properties; and Against this backcloth, I believe that we can be proud to have • our Support Services division containing delivered another excellent set our bespoke property maintenance business, of results and to have materially Willmott Dixon Partnerships. strengthened our balance sheet. 4 The newly regenerated Wolverton Park, near Milton Keynes Group Chairman’s Statement Financial results widespread respect through his intuitive understanding of his With all Group activity now consolidated under businesses and their people, and his Willmott Dixon Holdings Limited, Group turnover passion to ensure their continued grew substantially by 69% to reach £998.9 million success; Andrew Telfer, who now heads (2008: £592.4 million). In scale terms, we are now our Regeneration division, has adapted positioned amongst the UK’s Top Ten in our sector, well to his new challenge, his financial and amongst the Top Three when compared against sector experience, attention to detail those privately owned. and entrepreneurial appetite proving invaluable; and despite having been Profit on ordinary activities before taxation but on sabbatical for most of 2009, excluding amortisation increased 79%, growing Chris Durkin, who returns in May 2010 even faster than turnover, to reach £21.4 million to head our Support Services division, (2008: £12.0 million). Even after amortisation, has remained fully involved with profit on ordinary activities before taxation still our strategic planning process grew 52% to £18.2 million (2008: £12.0 million). behind the scenes. These excellent trading results, together with the Both Rick and I equally value expansion of our Group structure to include all the support of our non-executive subsidiaries and the issue of additional share directors who add considerable breadth capital, have combined to substantially strengthen to Board discussion and balance to our our Consolidated Balance Sheet. As at 31st decision making. Christopher Sheridan’s December 2009, equity shareholders’ funds had contribution has proved invaluable increased to £137.6 million (2008: £30.9 million), over several years, spanning both net current assets had increased to £73.2 million Willmott Dixon and Inspace boards; (2008: £29.0 million) and, with liquidity so critical whilst Jonathon Porritt’s appointment at a time of severe economic conditions and tight has been more recent, his deep credit markets, cash and bank balances had grown understanding of sustainability issues, to reach £59.9 million (2008: £7.9 million). so fundamental to our current and future service proposition, and his Rick Willmott has expanded upon these and other objective and forthright interventions important financial and operational measures within are already of immense value. his Group Chief Executive’s review that follows. But our thanks naturally go much deeper than just our Board colleagues; People it is, of course, our growing portfolio of Excellent results invariably demand excellent teams, front line businesses – and our central and 2009 has been no exception. Rick’s overall technical teams who support them – leadership, characterised by his approachability, that generates our income, earns our sound judgement, unflappable nature and appetite reputation, and ultimately determines for hard work, has been instrumental in our success, our success. Whilst there are far too helping create a cultural environment where our many individuals to mention by name, people understand and share our vision, and are our immense thanks go to all our motivated to play their part in helping us to achieve it. company MDs, functional heads, and their superb teams for their As always, Rick has been superbly supported by outstanding commitment, our divisional CEOs; John Frankiewicz, who heads professionalism and hard work. our enlarged Capital Works division, deserves particular mention and continues to earn 6 Future Prospects Willmott Dixon Interiors’ workload is likely to remain volatile for the next year or so, with commercial With our core public sector market fit-out being heavily supported by our two new expected to contract, and tender prices niche markets – retail and hotel refurbishment. to become even more competitive as government spending cuts start to bite, our future prospects are very Regeneration dependant upon the strength of our The private housing market remains difficult, although forward order book, and our flexibility prices do appear to have bottomed out and have to switch operations into other sectors. shown marginal growth in recent months. Whilst we need to remain cautious, we sense that now is the right time for Willmott Dixon Homes to be seeking CapitalWorks opportunities for the medium to longer term. We Because of its scale and current therefore