Firm says fall is due to one-off pension transfer, investments and housebuilding cost pressures
Wates鈥� statutory pre-tax profit dropped to 拢2.6m last year, a huge 94% drop on the 拢44.9m reported the year prior.
Compared with the pre-tax number, the family-owned construction firm reported a relatively more modest decline in its underlying profit figures for the year to 31 December 2024.
Underlying pre-tax profit, which excludes certain one-off items, was down 30% to 拢31.4m.
The stark difference between the statutory and underlying figures was the product of an 拢28.8m exceptional charge that arose from the firm transferring its defined benefit pension obligations to a third party.
These pension liabilities have now been moved off balance sheet to the Clara-Pensions superfund, which the firm said would provide members with increased financial security in the longer term while also managing the group鈥檚 pensions risk.
The more modest decline in underlying profit numbers was attributed to heavy investment by the firm, higher-than-expected costs in housebuilding joint ventures and losses incurred in closing out 鈥渁 number of construction projects鈥�.
The firm鈥檚 chief executive, Eoghan O鈥橪ionaird, said investments were made in supply chain, quality, sustainability, safety, data and analytics 鈥� areas where he said there was potential to create 鈥渃ompetitive advantage鈥� into the future.
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He said the investments were made on the basis of Wates鈥� expectation that it would bring in significant new orders and that 鈥渢he revenue line was quite strong throughout that year鈥�.
The firm also made an acquisition in the year, taking on a maintenance firm called Liberty.
Despite the drop in profit, the group said the results marked 25 years without making a loss. Turnover in the year stood at 拢2.3bn in the period, up 9.2%, and the group recorded an additional 拢100m of income from its share of joint ventures鈥� and associates鈥� turnover.
Around 拢1.3bn of turnover came from construction business, 7% up from 拢1.18bn, whil residential turnover dropped from 拢322.7m to 拢281.5m.
Wates reported a forward order book of 拢8.64bn, up 1.2% on the previous year.
The firm said the new fit out business it set up last autumn to target London commercial work, and which is headed by ISG鈥檚 former fit out boss Lee Phillips, has 20 people on its books.
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