Chief executive Struan Robertson said it intended to increase residential development activity, partially in response to the government's housing programme.
Robertson said: "The housing business has about £50m of turnover. We would be looking to expand that two-fold over the next two-to-five years. A development business of that size would be good."
He added: "The housing business is likely to become a most important part of our future – we will move much more strongly into residential development."
Wates also intends to introduce more and better off-site prefabrication methods.
Robertson said: "We are looking at how to improve the technology of prefabricated housebuilding. We have got to start thinking about construction techniques that will move the UK beyond our Victorian roots."
Robertson said that development businesses did not require many people to run them, so a large increase of employees in the division was not expected.
Wates is engaged in a number of joint-ventures that include large-scale housebuilding, such as its 470 waterside flat scheme at the Paddington Canal Basin.
This year Wates hopes to sell 120 homes at the top end of the residential market, typically selling at about £800,000 each. About 10% of them will be built using prefabrication techniques.
Robertson said that he expected group turnover at Wates to increase to about £600m this year, compared with £504.5m last year.
Last year, Wates ' pre-tax profit rose 9.7% to £9.7m. Robertson said that the company would easily beat that performance: "I would expect pre-tax profit of at least £15m."
Earlier in the year chairman Andrew Wates hinted that 2003 would be a good year for the firm. He said: "The outlook for the year is positive in spite of the weakening commercial office market and a softening of the residential sector. Growth continues in our social housing, public, PFI and retail sectors."
Wates has claimed that the company's improved performance was largely the fruit of a restructuring that started in 2000.