Galliford Try: record interim pre-tax profit of £34m

Galliford Try, one of the few remaining “hybrid” groups to run both construction and housebuilding operations side by side, has announced an interim pre-tax profit of £34m.

The surprise is that once again it is Galliford’s construction side that has generated the biggest share of profits, with contribution of £16m.

Housebuilding’s pre-tax profit ran it close, at £14m, though the figure would have been much higher but for the toll of finance costs running to £16m.

Greg Fitzgerald, chief executive, seen in the city as one of the sector’s biggest “go-getters” has build Galliford into a chunky operation thanks to a string of acquisitions.

The group’s turnover in the six months to 31 December was £900m (figure in the comparable period in the previous year: £610m). The latest pre-tax profit is 63% higher than the £21m achieved in Galliford’s previous interim results.

Highlights of the first half are:

• the contracting orderbook stands at £2.1bn
• £1.9bn of this comes from construction, another £150m is in affordable housing
• Linden Homes has been successfully integrated
• synergy savings from Linden exceed forecasts

Galliford’s net debt is running at £46m which represents a gearing (i.e. debt to assets ratio) of 14%.

Fitzgerald said: “I am pleased to report record first-half results, substantially ahead of last year.

“Our building and infrastructure divisions are delivering profit growth with cash generation. we are driving forward our growth in the affordable housing and regeneration market and have successfully integrated Linden Homes, consolidating our position in housebuilding across the south and east of England. We are in a good position to manage the business through a more difficult economic period.”

Building

Turnover of £340m produced a pre-tax profit of £9.1m. Cash generation was “particularly good” and the orderbook has been sustained at £900m. Of this tally, 95% has been secured on criteria other than a pure price-competitive basis.

Infrastructure

Pre-tax profit of £7m came from turnover of £250m. The orderbook has also been sustained, in this case at a figure of £1bn with 90% of this being in framework contracts.

The major framework for remediation works at Olympic Park is performing well and is likely to generate more work than initially expected.

Progress on the construction of Europe’s largest on-shore windfarm at Whitelee, south of Glasgow, is ahead of programme.

PPP investments

There might have been a profit from operations here of £400,000, but at the end of the day the division suffered a pre-tax loss of £1.5m

Affordable housing and regeneration

Turnover doubled to £95m and profit followed suit, climbing to £4m. The operating margin strengthened from 4.7% to 6.0%.

The total number of completions was 170% higher at 280, with an average selling price of £118,000.

Housebuilding

Pre-tax profit lifted from £10m to £14m as turnover doubled to £230m thanks to the acquisition of Linden Homes. Completions were 82% higher at 890. The average selling price of £231,000 was down on the figure of £238,000 a year ago.