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Paul Drechsler, who has a 拢133m warchest, believes the time is right, despite the fact the family owned group has not made a significant acquisition in its 110-year history.

He said: 鈥淲e鈥檙e focused on strengthening the balance sheet and have options we didn鈥檛 have a few years ago. If we spend, it鈥檒l have to be wisely and deliver better value for shareholders than the organic route.鈥�

He denied the company needed to make acquisitions to keep up with the rising number of contractors with a turnover greater than 拢1bn. 鈥淭he number of companies in excess of 拢1bn will be small but it鈥檚 customer satisfaction not scale that鈥檚 important.鈥�

In 2007, Wates鈥� turnover grew 10% from 拢863m to 拢949m.

Pre-tax profit was down 22%, from 拢48.5m to 拢37.7m, owing to an exceptional credit of 拢17.1m in 2006. Turnover in the construction division was up from 拢837.6m to 拢933.8m and pre-tax profit was 拢39.4m, producing a margin of 4.2%. Drechsler said the figure, higher than the industry norm of 1.9%, was the result of repeat business and close relationships with clients.

He added: 鈥淢y aspiration is the magic 5% figure by 2012 at the latest. I passionately believe that what we do as an industry is worth a hell of a lot more than 5%.鈥�

He said the group鈥檚 strong emphasis on customer satisfaction would help it through the downturn, although the effects had not kicked in yet.

鈥淭here is uncertainty in the commercial and retail areas but we are confident that in a slowdown any customer cutting back would cut us last,鈥� he said.

Drechsler said Wates would hit 拢1bn turnover in 2008 with growth of 10% and that growth in 2009 would be double-digit.