Galliford Try reports record profits but construction margin slips
Galliford Try has posted record annual profits of £135 million, a rise of 18 per cent over last year’s results after completing 5,204 new homes.
Strong growth in visitor levels and sales rates at the group’s Linden Homes business was described as “encouraging” while the company’s construction and partnership divisions also performed well.
However legacy building contracts continue to dog performance.
Galliford Try was one of three of the UK’s biggest contractors named to be at risk of financial collapse from analytics firm Company Watch.
Peter Truscott, chief executive, said that while the decision to leave the European Union had caused an inevitable backdrop of uncertainty for the new financial year, the overall outlook for housing, partnerships and construction looked strong.
“After a short-term decline in visitor numbers and small increase in cancellation rates, broadly in line with normal seasonal patterns, we are encouraged to see a return to growth in sales rates and prices since the referendum,” he said.
Truscott added: “The balance of our businesses and the strength of our order books mean that we are well-placed to manage the impact of this uncertainty.
“While there has undoubtedly been a cooling in demand for new private commercial buildings in the period leading up to and since the EU referendum, our focus on the public and regulated sectors, which represent 90 per cent of our order book, give us a strong and reliable outlook.”
Galliford Try has seen just two projects purportedly cancelled because of Brexit and two PRS schemes put back by four to six months.
The company said: “We will remain disciplined in our approach to securing work: while it is desirable to maintain a certain scale of operations, we will always prioritise quality of the order book over quantity.”
Overall group turnover including joint ventures rose 10 per cent to £2.67bn, with construction, which managed to expand 16 per cent over the year contributing £1.5bn.
But legacy contracts and slower than expected orders from the public sector saw margins slip back from 1.2 per cent to 1.1 per cent.
Truscott also said that economic uncertainty meant that Galliford Try would take a “more cautious approach to land acquisition” this year.