Galliford Try has reported moderate increases in profits and turnover.
The contractor turned over £1.39bn in the year to 30 June 2023, up 13% on the previous year. Revenue at its infrastructure arm grew substantially from £441.9m to £590.8m, while growth at the company’s larger construction division was slower, rising from £8m to £797.1m.
Galliford Try made a pre-tax profit of £10.1m, up from £5.4m the previous year. However, its “pre-exceptional pre-tax profit” stood at £23.4m; the bulk of its “one-off” costs were £10.5m spent on cloud-based IT systems, which went live in the summer of this year.
The profit included £3.6m the company made on the sale of its stake in a joint venture, which Construction news He understands that it was a legacy company operating a management-services contract signed more than 10 years ago.
Galliford Try said it was on track to make around £27m of profit in its current financial year, with 92 per cent of its order book for the period booked at the start of the exercise on July 1. Overall, the company’s order book stands at 3.7 billion pounds, 8.8% more than the previous year.
The group is targeting a turnover of £1.6 billion by 2026, with a profit margin of 3%. It said it would achieve this through “disciplined revenue growth” in its core markets of environmental work, building works and infrastructure.
It added that it will “target additional growth in complementary and adjacent markets” with higher margins, such as jointly developing build-to-rent schemes, enhancing its green retrofit offering and increasing its “capabilities of capital maintenance and asset optimization”.
In an interview with CNGalliford Try chief executive Bill Hocking said he was “thrilled that the strategy is working and that the group is going strongly in the right direction” with a “strong order book and a very strong balance sheet”.
He added that he is “absolutely” reflecting on where the company has come from five years ago, when it suffered major job losses, was forced to raise capital through rights issues and had to sell its house building for one share and -Cash offer worth £1.1 billion.
“Where we are now is a reflection of the very hard work that has been put in over this period of time by many educated and talented people,” Hocking said.
Andy Murphy, director of investment research firm Edison Group, commented: “Galliford Try specializes in infrastructure and environmental projects, and exited its housebuilding arm in 2020.
“These options have made Galliford Try’s business model uniquely resilient during what is a challenging period for the sector and the wider economy. Infrastructure projects are counter-cyclical and the drive towards net zero the demand for environmental projects has increased.
“Furthermore, the divestment of housebuilding has protected the company from the downturn in the residential real estate market, which began at the beginning of the year. As uncertainty abounds around property markets, Galliford Try is well placed to take advantage of many of the long-term trends in UK construction.”
