Wates Group makes 4% margin on £950m turnover

Wates Group lifted its profit margin to 4.0% last year, a useful rise on the previous figure of 3.7%.

The group’s orderbook now stands at a record high of £2bn.

Wates’ latest financial results cover the 12 months to 31 December 2007. Pre-tax profit was £38m (figure in the previous year: £32m) and turnover ran to £950m (previous figure: £860m).

The latest year-end cash balance stood at £130m.

Paul Drechsler, chief executive, said: “The company enters 2008 with a stronger balance sheet and a record orderbook.

“These results position Wates well for the uncertainty in the market and reflect the successful combination of family ownership and a commitment to long-term planning.”

Last summer Coutts Bank named Wates as the winner of its ‘Best UK Family Business’ award.

James Wates, representing the fourth generation of the family, responded to that by saying: “We are in the final throes of moving from the third to the fourth generation. A history of 110 years is significant in this industry.

“The essence of the family’s approach is to be able to pass on to the next generation in a stronger form than today. We see ourselves as stewards.”

This role is not that painful - the group’s shareholders enjoyed a total dividend of £15m.

The latest accounts show that Wates’ construction’s turnover of £930m produced a profit of £39m while the group’s residential development operation added a further profit of £3m on turnover of just £4m. The figures are before the allocation of central charges of £5m.

In total, the directors received £3.5m.

Wates does not say how much the highest-paid director received in 2007 but last time round he received a total of £1.1m made up of a salary of £800,000 with a further £340,000 from a long-term incentive scheme and an additional £94,000 for his pension scheme.

Two Wates’ directors have defined benefit pension schemes.

In 2006 Wates enjoyed an exceptional £17m credit as a result of  the “curtailment of its pensions liability”.