Galliford Try targets £1.5bn turnover construction division by 2018
Galliford Try has announced plans to grow its construction division to £1.5 billion turnover within three years following a record start to the financial year.
In strong half-year results published today, the group said it had revised up its revenue target for its construction division to £1.5bn for 2018, up from its previous £1.25bn target, thanks to increased confidence in an “improving market”.
Galliford Try’s construction division turned over £833 million in its last set of full-year results to June 2014, but expanded significantly a month later in July 2014 with the acquisition of the £410m-turnover Miller Construction.
Margins at the construction arm are also set to rise to 2 per cent as the successful integration of Miller is completed.
In today’s half-year results for the six months to December 2014, Galliford’s construction division reported a 52 per cent increase in revenue to £604.8m, up from £398.1m the previous year, but with a slim profit margin of 1 per cent.
Galliford’s construction order book almost tripled to £3.3bn, up from £1.3bn last year.
Galliford’s overall half-year results, which include its housebuilding business Linden Homes, were strong.
Revenue was up 35 per cent to £1.1bn, up from £803.5m, while pre-tax profit was up 12 per cent to £42.5m, up from £38.1m as net debt fell to £35.9m from £85.9m despite an increase in the housing division’s land bank to 14,300 plots.
Linden Homes grew 5 per cent to £346.1m turnover, up from £328.1m, completed 1,364 homes, up from 1,278 homes, and achieve an operating margin of 15.1 per cent, up from 13.5 per cent.
Greg Fitzgerald, executive chairman, who previously announced he is to step down later this year, said: “We are very pleased with the group’s strong performance in the six months to 31 December 2014 with our housebuilding and construction businesses both performing well, and are encouraged by the start we have made to the second half of the year.
“Linden Homes’ sales rate has increased since 1 January 2015. Housing market conditions remain good and we are optimistic about the prospects for a number of recent and forthcoming sales outlets. Our Partnerships business continues to see exceptional demand for contracting in the affordable housing market and the development business is growing in line with plan. Our enlarged Construction business has a record order book of £3.25 billion with the Miller Construction integration now completed.
“We are making good progress with the search for a new chief executive.
“We have increased the interim dividend by 47 per cent and, reflecting our continuing confidence in the delivery of our disciplined growth strategy, we are further enhancing our dividend policy.”