Additional AWPR charge sees Galliford Try costs reach £123m
The construction group said today that the £20m write-off meant it had lost £45m on the project for the full financial year due to bad weather and the impact of the collapse of partner Carillion.
The total additional charge since the project started is £123m is in line with previous guidance and the final outcome will depend on progress with claims after the project is complete, the company said.
“Our provisioning for the loss on this project reflects our current estimate of the final costs, and is reduced by an estimate of our share of significant claims against the client and others, which are yet to be agreed and concluded. This inherent uncertainty will be resolved only when the project is complete and the claims finally settled,” it added.
The Aberdeen Western Peripheral Route (AWPR), which is already running a year behind schedule, saw Galliford Try’s construction division report a £29.1m operating loss for the year to June 30 2018.
However the construction group appears to have weathered the storm of the project, after it posted profits before tax for the year ended 30 June 2018 of £143.7m – a 145% increase on the previous year’s figure of £58.7m. Group revenue was £2,932m, up from £2,662m in 2017.
Peter Truscott, chief executive, 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 business has a strong order book and continues to see growing demand across all regions with opportunities in both contracting and mixed-tenure.
“The underlying Construction business performed well and continues to see a pipeline of suitable opportunities, with new projects delivering improved margins. We have made good progress towards completion of the AWPR contract, with significant sections of the road open to traffic and the final section expected to be open by late Autumn 2018.
“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.”