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Willmott Dixon is transforming itself into a hybrid contractor and developer in an attempt to combat the downturn.

Speaking at the release of the company鈥檚 results for the year ended 31 December 2009, Rick Willmott (pictured), the group chief executive, saidthe profit contribution from private development would grow from les than 10% to 40% within five-to-seven years.

鈥淲e will become a different company in five years. Half our profit will come from contracting but the other half will come from mixed-use development and support services,鈥� said Willmott.

At present, the group earns 80% of its 拢18m profit in contracting, but it has been hit by the cuts in public sector spending, particularly in the education sector, which provides about 45% of its 拢1bn turnover. 鈥淭hat鈥檚 a big old lump to fill,鈥� said Willmott.

He added: 鈥淲e鈥檙e prepared for five years of pretty tough times. I think 2009 was as good as it鈥檚 going to be for the company for a while.鈥�

His comments echoed those of prime minister David Cameron, who this week warned that the country must prepare for 鈥減ainful and unavoidable cuts鈥� ahead of the emergency budget on 22 June.

In relation to cuts to BSF work, which has underpinned the company鈥檚 growth in recent years, Willmott said he was confident that projects at preferred bidder stage would go ahead, but he had not received any categorical assurances from local authorities.

He said the prospect of more school maintenance work as capital spending fell would not plug the gap as it would be in the 鈥渟ub-拢10m bracket鈥�.

The firm鈥檚 move into mixed-use urban regeneration follows a 拢250m win this week for a retail, residential and office scheme in Woking, in joint venture with developer Carisbrooke.

Willmott said the company would also act as a 鈥渇ully fledged developer鈥�, focusing on 鈥渃omplicated urban mixed-use schemes鈥� because it was work that other firms shied away from as such deals were not easy to get off the ground.

The firm is looking to bolster its development team with a handful of key appointments.

鈥淥ur strong cash position enables us to do it. What we will do is to add a layer of development expertise to our experience in managing these schemes,鈥� said Willmott.

In 2009, the company boosted turnover 68% from 拢592.4m to 拢999m. This was the result of the integration of social housing arm Inspace, which contributed 拢260m. With Inspace stripped out, the turnover growth was 25%. Inspace floated in May 2005 before being taken back in house in January 2008 for 拢148m.

Pre-tax profit was up 52% from 拢12m to 拢18.1m and shareholder funds grew from 拢31m to 拢137.6m.

In addition to development, Willmott said social housing would bolster the company鈥檚 results in future years.

He said 2012 would be the year when the real impact of the downturn would be felt. 鈥淭hings will be sick from 2012 onwards,鈥� he said.