Galliford on course to hit 2% profit margin target by 2006

Galliford's pre-tax profit has roared ahead to £23m (£13m in 2003). Wobbles in the construction division - which dived into the red last year - are being pushed into the past as margins turned positive and climbed to 0.8%.
Andy Sturgess, chief executive, said: "The division is on course to meet its profit margin target of 2% by the end of our 2006 financial year."
Financial results (12 months to 30 June) show turnover higher at £700m (£640m). There was a positive cashflow in construction with the result that gearing [the ratio of debts to assets] was cut to 17% (30%).
Galliford has reached a satisfactory settlement at the Daventry distribution centre, with both the client and structural engineer ending the litigation process
that resulted from the defective floor. Of the £6.5m set aside as a provision in 2001, most of this money had already been brought back.
The housebuilding division completed 760 homes (740) and the average selling price climbed to £224,000 (£200,000).
The deficit in the group's final salary pension scheme called for greater attention. Galliford lifted its contribution to £6.4m (£3m) in order to narrow the deficit. Since 2002, new employees joining Galliford have been steered into a stakeholder pension scheme.