Galliford Try confirms 350 construction job cuts
Up to 350 jobs will be lost at Galliford Try after the firm confirmed plans to reduce its construction activity by nearly a third.
Galliford Try revealed potential for job losses in April when it launched a review of its construction business with the intention of reshaping operations to become more efficient and increase profitability.
Then earlier this month the company announced that the proposed reorganisation will potentially see the closure of its Scottish infrastructure business unit.
In a trading update today, Galliford Try said plans were being implemented to “simplify the business and management structure and to refocus on key strengths in markets and sectors with long-term growth and profitability potential”.
It added: “The business will concentrate on its core strengths in building, water and highways (having already ceased bidding on fixed-price major projects in 2016) resulting in a reduction of up to 350 personnel across the UK.”
The restructured business’s target annual revenue will reduce to approximately £1.3 billion generating annualised cost savings of up to £15 million from 2021, accelerating progress towards target operating margins of 2% by 2021.
The review came as the firm said it was anticipating a £30m to £40m drop in full-year exceptional profits due to restructuring costs and additional provisions for loss making contracts.
The single largest element in adverse settlements relates to delays on the £1.4bn Queensferry Crossing project with the Aberdeen Western Peripheral Route (AWPR) joint venture also contributing to losses.
Chief executive Graham Prothero said: “We have made some difficult decisions in response to the challenges faced by the group’s construction business. The associated operational changes are being implemented across the business. We are confident that the decision to refocus our construction activities will deliver a more stable business for the future and support improved margins.
“Our balance sheet remains strong, with guidance for average net debt for the full year unchanged.”