Willmott Dixon warns of covid-19 impact on project prices

Willmott Dixon has warned that the impact of the covid-19 pandemic is likely to continue to push up project prices and impact programme timings, as it revealed its financial results for 2019.

The company, which has managed to keep all of its sites open
during the coronavirus lockdown, reported turnover of £1.25bn in 2019 (down
from £1.32bn), and a decline in pre-tax profit to £31.3m, down from £38.6m. The
company’s profit margin for the year declined slightly to 2.5%, down from 2.8%.

The firm’s construction arm accounted for £1.1bn of its
annual turnover, down from £1.2bn the year before, while its interiors business
recorded a turnover of £149m, up from £125m.

Meanwhile, Willmott Dixon, which procured 75% of its turnover
via frameworks, had £93.1m of cash in the bank as of the end of the financial
year.

But Willmott Dixon’s group chief executive Rick Willmott warned
that there would nonetheless be an impact to the business from the coronavirus
pandemic. He said: “While we have a healthy forward order book that stands at
over £1bn, it’s inevitable that some projects may be delayed or postponed owing
to the current economic situation created by covid-19.  

“My message to customers is that we are an industry that is
very good at solving complex problems. We have shown in our response to the
pandemic that we can adapt our processes to continue building safely and
deliver the important infrastructure that will be a driver for future economic
growth.

“I think we need to be realistic that output reductions
linked to social distancing measures, coupled with a possible lag in the supply
of some materials from overseas, will inevitably have a continued impact on project
prices and programme timings in the short to medium term. We are working
closely with our supply chain partners and customers to mitigate this as much
as possible, while ensuring that projects starting this year now take into
account the likely covid effect.”

He also thanked the company’s staff for the way in which they have adapted to the crisis. Willmott said: “It’s been a phenomenal team effort from our people as we have adjusted our business to maintain operations during covid-19, one that has required a high level of resourcefulness. Our people quickly embraced the changes required to adhere to the Construction Leadership Council’s Site Operating Procedures, with projects and processes reconfigured to provide a safe working environment for our people and supply chain partners, whose support has been brilliant over the past few months.

“Our sites have remained open throughout, using adaptations like one-way systems for circulation, GoPro technology to capture progress, motion activated voiceover systems to remind people to abide by social distancing and staggered breaks and lunch times, with clear signage for social distancing in canteens.  We now expect all sites to remain open, although covid-19 related safety measures and availability of materials will mean that output levels will be reduced compared to before the pandemic.  While this will inevitably impact upon pre-pandemic expectations in terms of timescales and budgets, I really appreciate how supportive our customers are being on this issue.”

Top image: Rick Willmott