Galliford Try plans to raise £150m in capital and cut its dividend to help cope with the collapse of Carillion
Announcing the construction giant’s half-year results to 31 December, chief executive Peter Truscott said the move reflects the “additional financial obligations” arising from the Aberdeen Western Peripheral Route joint venture with Carillion.
The collapse of Carillion is likely to increase Galliford Try’s total cash commitment to the road project to more than £150m and raising additional capital will ensure resources are not diverted from other areas.
Truscott also said plans to increase dividend cover to two times pre-exceptional earnings will be brought forward to the current financial year.
The company announced a dividend of 28p per share for the year to 31 December 2017, compared with 32p per share a year earlier.
Pre-tax profits for the six months to 31 December were down 11% year-on-year to £56.3, reflecting a £25m exceptional charge arising from Carillion’s collapse.
Revenue increased 14% to £1.4bn.
“We have delivered a strong financial and operational performance in the first half, with revenue growth across all three businesses and excellent progress against our 2021 strategy,” Truscott said.
“Within Partnerships & Regeneration, we have delivered an excellent first-half performance and continue to be very encouraged by the opportunities in the market, which give us confidence that this growing business will continue to deliver sustained returns over the strategy period and beyond. Our underlying Construction business is performing well, with the margin drag of legacy contracts reducing.
“We continue to maintain strict control over net debt, which is consequently better than our guided level. We enter the second half of the year with a solid foundation to build on and strong fundamentals for the housing market. While we remain cautious of the impact of the current political uncertainty and the medium-term outlook for the macro economy, we believe our focused strategy, strong order book and disciplined approach will deliver further growth and shareholder value.”
