Galliford Try reports profit and turnover growth

Galliford Try has reported moderate increases in profit and turnover.

The contractor turned over £1.39bn in the year to 30 June 2023, a 13 per cent increase on a year earlier. Revenue at its infrastructure arm grew substantially from £441.9m to £590.8m, while growth at the company’s larger building division was slower, edging up by £8m to £797.1m.

Galliford Try made a pre-tax profit of £10.1m, up from £5.4m a year earlier. However, its ‘pre-exceptional profit before tax’ stood at £23.4m; the bulk of its ‘exceptional’ costs was £10.5m incurred for investment into cloud-based IT systems, which went into operation over summer this year.

The profit included £3.6m that the company made from selling its stake in a joint venture, which Construction News understands was a legacy company that operates a management-services contract signed more than 10 years ago.

Galliford Try said it was on track to make around £27m in profit in its current financial year, with 92 per cent of its order book for the period having been inked at its finacial year’s start on 1 July. Overall, the company’s order book stands at £3.7bn, up by 8.8 per cent from a year earlier.

The group is targeting a turnover of £1.6bn by 2026, with a profit margin of 3 per cent. It said it would achieve this through “disciplined revenue growth” in its primary markets of environmental work, buildings work and infrastructure.

It added that it will “target further growth in complementary and adjacent markets” with higher margins, such as co-developing build-to-rent schemes, improving its green retrofit offer and increasing its “capital-maintenance and asset-optimisation capabilities”.

In an interview with CN, Galliford Try chief executive Bill Hocking said that he was “excited by the fact that the strategy is working, and the group is heading strongly in the right direction” with a “strong order book and a very strong balance sheet”.

He added that he “absolutely” reflects on where the company has come from five years ago, when it had large losses from major problem jobs, was forced to raise capital through rights issues, and had to sell its housebuilding arm for a share-and-cash deal worth £1.1bn.

“Where we are now is a reflection of the really hard work that has gone on over that period of time by a lot of educated and talented people,” said Hocking.

Andy Murphy, director at investment research company Edison Group, commented: “Galliford Try specialises in infrastructure and environmental projects, and shed its housebuilding arm in 2020.

“These choices have made Galliford Try’s business model uniquely resilient during what is a challenging period for the sector, and for the economy at large. Infrastructure projects are counter-cyclical, and the drive to net zero has increased demand for environmental projects.

“What’s more, divestment from housebuilding has shielded the company from the decline of the residential property market, which began earlier this year. As uncertainty over property markets abounds, Galliford Try finds itself well-positioned to take advantage of many of the long-term trends in British construction.”

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