Wates eyes gigafactory work as it predicts £2bn-plus turnover
Wates expects to turn over £2.1bn in 2023 and is targeting further ultra-high-value gigafactory projects, its bosses have told Construction News
On Thursday (30 March) the contractor and developer reported a record turnover of £1.89bn – a 36 per cent increase from two years earlier – and revealed that it had carried out about £100m of work on its largest-ever project: a £500m gigafactory for electric car batteries in Sunderland.
However, in 2023 the family-owned business is set to earn more than £2bn for the first time in its 126-year history – and the group expects to keep growing due to housing demand and increased government spending in sectors including retrofits.
Wates chief financial officer Philip Wainwright said: “We’ve gone from £1.6bn [in 2021] to £1.9bn to £2.1bn [expected in 2023]… I won’t tell you exactly where [Wates turnover] will be in five years because we’re not on an untrammelled view to try and get to some turnover figure.
“[However] we do see it continuing to increase. Clearly, because 60 to 70 per cent of our work is with the government, it’s going to grow in line with their policy setting. And we see their policy setting having to increase to support the whole built environment that we are involved with.
“A big chunk of that is hospitals, schools, prisons, social housing… [There are also] 27 million houses of which five million are public housing by registered providers [which will need retrofitting]. That area is seeing massive investment – so you can do the maths.”
Gigafactory plans
Company bosses also said they will chase more large projects in the gigafactory sector. Wates chief executive Eoghan O’Lionaird said the firm hoped to win more work from Envision, its client on its current gigafactory job (pictured), and hinted that he would be interested in working with Britishvolt.
“We hope this isn’t the last project we’ll get a shot at competing for with this customer, Envision. They’ve said publicly they want to build [around] 38-gigawatt hours of capacity in the UK. And this first plant is 12-gigawatt hours. So about a third [of Envision’s desired capacity].
“And [our current project] is vast, it’s 16 hectares in size, it’s just unimaginably huge. But huge as it is, it will produce batteries for about 100,000 cars.
“There are about 300,000 battery EV cars sold in the UK today, out of just under two million cars in total. And if we’re going to decarbonise transportation over the next years in the UK, clearly we need millions more of those batteries.
“Envision have said that they’re going to build… three times [the capacity of their first plant] – so it’s 300,000 or thereabouts.
“We’ve learned a lot from this project and we are in ongoing discussions with the customer to complete, and indeed enhance, the programme that we currently have contracted, but also for those future projects. So we’re certainly keen to continue working with this customer.”
O’Lionaird added that he had heard that “Britishvolt may indeed have a plan” to build a gigafactory plant. It’s unclear whether this is the same gigafactory ISG was contracted to build before Britishvolt entered administration – and was subsequently bought out – last month.
“As other customers come along… whether it’s [Britishvolt] or others, this is a space that Wates is quite keen on.”