Galliford gets £400m refinancing as it aims to boost construction

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BUILDING group Galliford Try signalled its confidence in the UK housing market with plans to ramp up construction and more than double annual profits by 2018.

The group has secured a £400m refinancing deal to help fund expansion as it predicts the property market will continue to improve, backed by the Government’s Help to Buy initiative, which offers loans and mortgage guarantees.

Galliford unveiled the strategy as it announced record half-year profits to the end of December, up 18 per cent to £38.1m, as revenues also climbed 18 per cent to £803.5m.

Turnover from its Linden Homes housebuilding arm was up 20 per cent to £328.3m, from completions of 1,300 units, and profit margins from the division also increased. Linden Homes North is based in Hull.

Average sale prices on private homes increased 15 per cent to £291,000, reflecting strong demand for its well-located southern sites and increased focus on houses, Galliford said.

The group said it planned to add to its record housing landbank of 13,500 plots, adding a further 14,000 to supply its needs for up to four years.

Margins in Galliford’s construction arm narrowed amid challenging conditions, but the group said following a year of “sustained and improved levels of opportunity” it intended to grow the businesses by 50 per cent.

Galliford has reappointed to work with Yorkshire Water from 2015-2020.

Chief executive Greg Fitzgerald said: “We have been very encouraged by the start of the calendar year. Group profit for the half year is at a record high and we continue to be encouraged by the levels of future opportunities. Housing market conditions continue to improve.”

Shareholders were also rewarded with an interim dividend hike of 25 per cent to 15p per share.

Its refinancing arrangement has seen the group enter into a new five-year unsecured credit facility of £400m, an increase of £75m on the facility it replaced.