Galliford Try has reported strong growth in its annual profits, boosted by a good performance by its housebuilding operation and a strong pipeline of upcoming projects
For the year to 30 June 2018, profit before tax was £143.7m, up from £58.7m the previous year.
Group revenue was up 10% to £2,932m (2017: £2,662m).
The surge in profits is somewhat thanks to an improvement at Linden Homes and Partnerships & Regeneration which saw sales order books stand at £698m in 2018, compared with £638m in 2017.
However, Galliford Try’s recent success is more likely due to its construction division reducing its losses from £88.7m in 2017, to £29.1m in 2018.
Most of Galliford Try’s recent problems relate to the delayed Aberdeen Western Peripheral Route (AWPR) contract, on which the company has lost £123m in total so far.
The AWPR contract was originally a three-party joint venture with Balfour Beatty and Carillion. When Carillion collapsed in January 2018 Galliford Try booked an extra £25m charge in the first half. A further £20m charge has been taken in the second half due to weather delays in the spring.
During the past financial year Galliford Try’s financial position has deteriorated from £137m net cash to £26m net debt. Despite this, a rights issue in April generated £150m for group coffers.
The Aberdeen bypass project is now mostly complete and much of it is open to traffic; final completion is expected in late autumn.
Commenting on the latest figures, Chief Executive, Peter Truscott said: “We have delivered a very strong underlying performance during the year, driven by excellent progress towards our strategic objectives across all three businesses.
“Linden Homes continued to prioritise margin growth, benefiting from further standardisation and the robust control of overheads. This resulted in increased profitability in a year with modest house price inflation. Volumes also grew reflecting the strength of our product offering, and with the sector supported by Help to Buy, good mortgage availability and the cut in stamp duty for first-time buyers. The land market continues to be favourable, allowing us to buy land at robust margins, in the right locations for our new standardised product.
“Partnerships & Regeneration achieved strong growth in both revenue and margin, with excellent contributions from the new businesses in Southampton, Bristol and East Midlands.
“The underlying Construction business performed well and continues to see a pipeline of suitable opportunities, with new projects delivering improved margins.
“The rights issue in April has strengthened the balance sheet and ensures that the Group’s businesses are well positioned, with the appropriate capital, to deliver on their respective growth opportunities in line with our Strategy to 2021.”
