Exclusive: Contractor is aiming to double turnover to £2bn, as chief executive says firm is considering moves into “adjacent markets”
Contractor Wates is aiming to double turnover to £2bn as part of a long-term growth plan, the new boss of the family-owned business has revealed.
In his first major interview since taking up his role in January, Wates chief executive Andrew Davies told Building the “longer-term” aspiration for the business was to double revenue at the £931m-turnover firm.
Davies, who took over from long-standing executive chairman Paul Drechsler in January, has been asked by the Wates family to come up with a plan to achieve a doubling of the business, with the initial strategy due to be presented to the board next month.
Davies will have to turn round the trajectory of the firm, with turnover falling by 22% in 2013, from £1.2bn the previous year to £931m.
He has already said he hopes to return the company to £1bn turnover in 2014.
Speaking to Building, Davies said: “We certainly want to get back to £1.2bn in the next couple of years. [But] I think the longer-term aspiration would be to double the size of this business.”
He said the “aspiration” was part of the Wates family’s fifth generation strategy, which aims to hand on a bigger and better company to the next generation of the family.
Of the £2bn target, Davies said: “That’s materially bigger and better. That’s not a hard target, that’s the aspiration of the shareholder, and what we’ve got to put in place is strategies to drive toward that target.
“It is a useful aiming point for the business to go at.”
The news comes after Building revealed last month that Wates is considering a move into the infrastructure market and has hired Terry O’Connor, former Alfred McAlpine regional managing director, to examine the possibility.
Davies said no decision had been taken on whether to pursue infrastructure, but said it would consider moves into “adjacent” markets to construction to bolster growth. Wates will also consider small “bolt on” acquisitions to boost growth, Davies said.
However, he said the growth plans would not see a “revolution” in the business, with his focus continuing to be on existing core markets, such as commercial building, school building and housebuilding.