Galliford Try is to receive a £26m cash payment to settle a “complex and challenging” dispute with a major infrastructure fund.
In a statement to the London Stock Exchange, the Uxbridge-based contractor said it expected to report a one-off, non-cash write-down of around £3m as a result of the deal.
As a result of the windfall, it also declared a special dividend of 12p per share, amounting to £13m or half the agreed payout.
“This settlement brings to a close what was by far Galliford Try’s biggest contract dispute after a long and drawn-out process on terms close to the company’s book value, which resulted in the payment of £26m and will allow for the payment of a special dividend of 12p share,” the statement said.
The settlement marked the end of what the company described as a “complex and challenging multi-contract dispute” over three contracts with entities owned by the fund, in which costs had been significantly impacted by client-driven scope changes, he said.
He did not name the entities or the fund that owned them.
Galliford Try formally stopped work on the projects in August 2018, but continued to claim the total of the contracts totaling £95m.
The parties agreed to resolve the matter through ongoing arbitration, which has now concluded with the settlement.
In March, Galliford Try reported a profit of £7.2m for the second half of 2022, saying it had deliberately recapitalized its balance sheet by selling its Linden Homes and Galliford Try Partnerships divisions in 2020.
It said it would focus on three sectors: the development of private rental programs for on-sale to real estate companies; maintenance work in the water sector; and the rehabilitation of existing buildings.
