Galliford Try prepares for AWPR dispute resolution as it completes construction restructure



Galliford Try has completed the restructure of its construction business and is prepared to go to formal dispute resolution with Transport Scotland over a final settlement of the Aberdeen bypass, the firm said today.

Graham Prothero

Outlined by the company earlier this year, the reorganisation saw the firm reduce its construction activity by nearly a third, close its Scottish infrastructure business unit and shed 350 jobs.

Infrastructure managing director Nick Salt was revealed as the most high-profile victim of the restructure earlier this month.

In a trading statement this morning, Galliford Try said the strategic review of construction is now complete and the business is “refocused to deliver an improved future performance”.

Chief executive Graham Prothero said: “We are pleased that the restructure of the construction business is now complete.

“The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively.

“I look forward to the next financial year with the appropriate strategic priorities in place across the group.”

On the ongoing negotiations surrounding the Aberdeen Western Peripheral Route (AWPR) joint venture with Balfour Beatty, the company added: “The Aberdeen Western Peripheral Route is complete and delivering economic benefits to the region and receiving a positive reaction from all stakeholders. The joint venture continues to negotiate on the significant claim with the client, while preparing to pursue this through formal dispute resolution should these talks not reach a satisfactory conclusion.”

Elsewhere Galliford Try said a reduction in exposure to Central London helped it ride out the worst effects of a slowing UK housing market and annual pre-tax profits are expected to be in line with analysts’ estimates.

The current construction order book stood at £2.9 billion (2018: £3.3bn) with 88% of revenue for the new financial year secured. Net debt reached £60 million (2018: net cash £98m) with an average net debt of £187m.

Linden Homes has maintained its sales rate and strong margin and continues to improve its customer satisfaction.

Partnerships & Regeneration continues to achieve strong growth ahead of targets, increasing both revenues and margins, and successfully completing the acquisition of the Strategic Team Group in Yorkshire.

Mr Prothero added: “The group has continued to perform well, supported by good housing demand. We expect our full-year results and average net debt to be in line with previous guidance.

“We are making strong progress against the operational targets we set out in 2017. We are reviewing our 2021 volume targets to ensure that growth is controlled, and our gearing is managed. Despite the weaker economic outlook, Linden Homes continues to see robust demand, with operating efficiencies driving strong margins and improving customer satisfaction. Partnerships & Regeneration is well on track with its aspirations for exciting growth in both revenue and margins, with some key wins in the period and further good opportunities across the market. We are pleased that the restructure of the construction business is now complete.

“The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively. I look forward to the next financial year with the appropriate strategic priorities in place across the group.”

Meanwhile, Galliford Try was one of eighteen companies to have been suspended from the Prompt Payment Code for failing to pay suppliers on time, the Chartered Institute of Credit Management (CICM) announced today.



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