Galliford Try boss unveils exit plans amid records profits
Greg Fitzgerald has announced that he will step down next year after 33 years at Galliford Try.
The news came as the firm unveiled record profits of £95.2 million before tax for the year to 30 June 2014. This figure was up 28 per cent on the previous year’s £74.1m.
Annual revenue was also up strongly, by 21 per cent to £1,768m (2013: £1,467m). The profits rise is mainly down to Linden Homes’ £114.9m operating profit, achieved from revenues of £760m. Average private selling price of Linden’s homes rose to £305,000 from £266,000 the previous year and the operating margin grew to 15.1 per cent (2013: 13.3 per cent).
Construction also continued to be profitable, though with margins reduced to 1.0 per cent. This division made £8.0m operating profit (2013: £12.9m) from revenue of £833m (2013: £823m).
Mr Fitzgerald has told the board that, despite being only 50 years old, he wants to retire before the end of 2015.
Greg Fitzgerald was a founder of Midas Homes in 1992 and its managing director when it was acquired by Galliford Try in 1997. He was appointed to the group board in 2003 as managing director of the housebuilding division before becoming chief executive in July 2005.
Galliford Try set out a plan in February 2014 to grow its building and infrastructure businesses by 50 per cent to take revenue to £1.25bn by 2018. When it bought Miller Construction in July it achieved this at a stroke. It has therefore increased its revenue target to £1.5bn by 2018. Integration of Miller Construction is proceeding ahead of expectations, the board said.
Commenting on the annual results, Greg Fitzgerald said: “We have made excellent progress during the year against our strategy of disciplined growth with principal focus on margin. Linden Homes achieved an improved margin, ahead of our expectations, and significantly stronger average selling prices, reflecting the quality of our homes, our prime locations and the backdrop of improved consumer confidence. As we have gone through the quieter summer period, sales have been in line with our expectations.”
He added: “Construction continued to perform well, maintaining a profitable result as we work through contracts won in a difficult market, and start to deliver new work secured on more robust terms in improving conditions. We are very pleased to have acquired Miller Construction which more than doubles the size of our order book, adds several strategically important frameworks and also brings additional talent to the enlarged group. Integration is proceeding very well and ahead of expectations.
“With a record landbank in housebuilding, a larger and stronger construction business and a robust balance sheet, the group is in an excellent position. Whilst we continue to recognise the challenges around the supply chain and the time required to convert outline planning permissions into detailed consents, we look forward to the year ahead with confidence.”
The board has already begun the process of appointing a new chief executive.
Andrew Richards, the 42-year-old group managing director for housebuilding, and Ken Gillespie, the 49-year-old construction division chief executive, are both on the group executive board and likely to be considered potential successors. Both men joined the company through the acquisition of Morrison Construction in March 2006.
Chairman Ian Coull said: “On behalf of the board I would like to thank Greg for his excellent leadership and vision over the last nine years in his role as chief executive. The company has a clear disciplined growth strategy against which we are making strong progress. We have begun the search for Greg’s successor; Greg is committed to ensuring a smooth transition and will leave the business in a strong position for his successor.”
Mr Fitzgerald said his decision to retire was “a personal one”.
He added: “As our full year results announced today demonstrate, the group is in great shape, with a strong management team, and very well equipped for the future.”