Wates reports drop in profits
Company incurs restructuring costs of $7.4m as home market weakens
Construction management firm Wates Group has announced weaker underlying pre-tax profits of $45.8m (2011: $50m) despite a 10% increase in revenues to $1.81bn ($1.7bn).
The privately-owned company also incurred $7.4m in restructuring costs as it sought to contend with weak conditions in its home market in the UK.
Despite this, the company, which has a joint venture with Al Fara'a General Contracting in the UAE, said that it had increased the value of its net assets to $106.4m ($97.4m). Its order book at the year end stood at $2.4bn, down from around $3bn at the end of 2011.
Chairman and chief executive, Paul Dreschler, said: “Reduced demand for construction, some unsustainable pricing by competitors and an increasing number of supply chain failures combined to create the most demanding trading conditions in 2012.
"This, together with some operational challenges, placed pressure on our margins in the construction business.
However, he said that the remained financially stable and argued that conditions were improving.
“2013 has got off to a more positive start for the construction industry, with housebuilding in particular seeing some recovery.
"We believe there are great business opportunities for Wates in what will continue to be a challenging and uncertain market.”