Yorkshire contract wins boost profits at Galliford

HOUSEBUILDER and construction firm Galliford Try cheered investors with the news that prospects for the coming year look encouraging.
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The group reported a 17 per cent rise in full-year pre-tax profits, helped by higher housebuilding margins.

Galliford has been boosted by several significant contracts in Yorkshire.

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In a joint venture with AECOM, Galliford has been appointed as one of four partners on Yorkshire Water’s Large Schemes framework which has a total value of £330m.

Work includes major upgrades to water and waste water treatment works.

It also incorporates a number of schemes to improve the quality of bathing water on the east coast of Yorkshire in order to meet the revised Bathing Water Directive.

The first two schemes to be undertaken on the framework have been secured by Galliford Try and AECOM to upgrade the Acomb Landing water treatment works in York and the Caldervale waste water treatment works in Wake- field.

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Galliford said that the combined value of these two schemes is £25m.

The company is also working on a scheme at Beverley’s Saturday Market to improve traffic flow and instal new street lighting columns at the market.

Galliford said pre-tax profits for the year to June 30 rose 17 per cent to £74.1m, up from £63.1m the previous year.

Group revenues, which exclude joint venture revenues of £92.1m, fell two per cent to £1.47bn.

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The company raised its dividend payment by 23 per cent to 37p per share.

Chief executive Greg Fitzgerald said: “We have made excellent progress as a group in the financial year and delivered a record profit before tax.

“Both businesses are, against a background of some labour and supply challenges, maximising production to respond to strengthening customer demand and improved conditions. The board is optimistic that the improved opportunities being experienced will continue through into 2014.”

Operating margins in housebuilding, which accounts for 40 per cent of Galliford’s business, rose 11 per cent to 13.1 per cent following a strategy of buying land cheaply during the financial crisis.

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Housebuilding sales currently reserved, contracted or completed rose 16 per cent to £405m, thanks to Government schemes to support struggling buyers and greater mortgage availability.

Construction, which makes up 60 per cent of the business, posted a weaker margin of 1.7 per cent which was in line with expectations.

The group said there are signs of an improving market in the construction division, which has an order book of £1.7bn. Some 87 per cent of the current year’s planned revenue has been secured.