Galliford Try squashes net debt

Galliford Try has announced that it has pushed its net debt down to less than £5m as it prepares to batten down the hatches ahead of tougher times in the construction sector.

The announcment came as Galliford Try told the City that it expected a record set of results for the year ended 30 June 2008.

It predicted that it was on course to meet a pre-tax profit of £60m, while it has reduced its net debt to less than £5m, which represents gearing of under 2%.

Meanwhile it indicated that its building and infrastructure divisions should help insulate it from some of the worst effects of the housing market downturn.

Its building division's order book stands at £0.8bn, with 75% of orders from public and regulated clients.

And its infrastructure division also looks set to stave off the downturn, with 80% of its 0.9bn order book in long-term frameworks, and 95% of work for the public and regulated sector.

But it warned that the housing market showed "no signs" of improvement since its interim management statement in May. Housing completions were up to 2,524 for the year, compared with 2,433 a year ago, but average sale prices were down 12% to £193,000.

"As we enter the new financial year the lower overall volumes of private housebuilding sales and the increased cost of incentives going foward will continue to impact on margins," the statement said.

Galliford Try said that it would shave £12m in overheads off in housebuilding.