Willmott Dixon eyes PFI and PPP schemes

Willmott Dixon is to start switching its long-term focus away from public sector frameworks to retail, leisure and building a PFI/PPP track record, as it anticipates a slowdown in public capital spending.

The news comes as the group reported an 18% rise in pre-tax profit in 2008 and a 56% rise in turnover to £592.5m.

Three subsidiaries of Inspace, which the company paid £148m to bring back in house in January last year, were not counted in the results. Turnover including those arms would have stood at £838m, with pre-tax profit at just over £20m had they been included.

Speaking to CJ, Willmott Dixon chief executive Rick Willmott said: "As a realist you have to believe that all government spending is going to be turned down or turned off. Our hope is that education will be one of the last sectors to feel that.

"What happens to the frameworks and the workloads in 2010 onwards is the key question. Everyone has the crystal ball out at the moment."

Willmott Dixon is hoping to use its Investments arm, which currently has a turnover of £1m, to form consortia to tender for PPP and PFI schemes.

Key targets will be Building Schools for the Future (BSF), emergency services PFI, and the upcoming sixth round of the housing PFI. Willmott indicated that the firm was also interested in a plan to package the delayed Learning and Skills Council colleges into PPP deals.

On the retail side, the company is hoping to pick up more new build and refurbishment work for its trio of supermarket clients - Morrisons, Waitrose and Marks & Spencer. "They are excellent customers and hopefully they will continue to spend because their markets appear to be less affected by the recession than most," Willmott said.

He added that the budget hotels market, while not a major market for the contractor at the moment, was an "area of future focus".

Willmott Dixon said it has £1bn of projects secured, and is a preferred bidder on a further £500m.

The highest-paid director received £755,405 last year, down from £817,904 in the previous year.