Willmott Dixon margin hits 2.8% as profit soars

Willmott Dixon is building a cash pile to weather further client project delays stemming from Brexit uncertainty.

The debt-free building contractor said restructuring to focus on building and fit-out work had paid-off last year with a 55% hike in pre-tax profit to £37.5m.

This helped to raise operating margin to 2.8% from 1.9% in 2017 and build up average daily net cash of £100m.

Despite a tightening market, a growing share of work placed by clients saw revenue edged forward 4% to £1.3bn.

Willmott Dixon’s group chief executive Rick Willmott said: “Our approach of the last two years to focus entirely on construction and fit-out is showing strong results with good earnings growth, increased margin, a solid cash position and a robust, sustainable forward order book.

“This at a time when the pipeline of work available to the country’s fifty largest contractors has continued to diminish post the 2016 Brexit referendum; caused by postponement or cancellation of project opportunities. 

“Being in a position of strength to weather the consequences of a further material depletion in accessible workload will remain a key priority for Willmott Dixon.”

He said Willmott Dixon’s position on public sector procurement frameworks would be a key driver for its business, opening the door to £25bn of potential workload volume.

Presently 73% of the firm’s order book is framework secured.

Willmott said the group was focused on sustaining a healthy supply chain, with average payment times of 32 days.

He added that the group aimed to better this record which made it the best paying top 20 main contractor.

Written by Aaron Morby - Construction Enquirer