Galliford's growth mission on target

Galliford Try said its three-year push to double the size of its housebuilding business was on track after a sharp rise in the division's profits yesterday.

The construction firm, which raised 119.3m from shareholders last year to finance the expansion, also reported encouraging levels of sales and prices due to its presence in more resilient markets in the south of England.

It has increased its landbank of plots from 7,850 a year ago to 9,700, 58 per cent of which has been acquired at current and more attractive market prices.

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Full-year profits from the division increased 56 per cent to 17.6m on revenues of 316m, a rise which reflected a 10 per cent improvement in average selling prices to 190,000 and completions of 1,705 in the 12 months.

The expansion in housebuilding has offset challenging conditions in general construction markets, with Galliford now focused on securing work in those sectors with an "acceptable profits and risk profile".

The shift in strategy meant construction revenues fell 20 per cent to 936.5m, although the order book rose 6 per cent to 1.8bn.

The level of public sector demand will hinge on next month's spending review but Galliford said there were limited signs of increased activity amongst its blue-chip clients.

Across the group, pre-tax profits before exceptional items in the year to June 30 increased to 26.1m from 24.5m a year earlier.

It returned to the black at the bottom line with a profit of 19.2m.

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