Profits build at Galliford as legacy project concerns ease
● Revenues also on the rise but fullyear dividend cut
Annual profits at Morrison Construction owner Galliford Try surged 145 per cent as the company recovered from hefty charges linked to major infrastructure projects a year earlier.
The company released fullyear results yesterday showing pre-tax profits jumping from £58.7 million to £143.7m in the year to 30 June.
That was despite an exceptional charge of £45m due to additional costs taken on after one of its joint venture partners Carillion went bust in January, as well as poor weather conditions.
However, it was nearly half the exceptional charge logged in 2017, when it took an £88.9m hit on two Scottish joint venture infrastructure projects, both of which were contracted on fixed-price terms, in 2011 and 2014.
The bulk of the charges last year related to the Queensferry Crossing bridge contract and the construction of the Aberdeen Western Peripheral Route (AWPR). Revenue – including from its share in joint ventures – for the full year wasup11percentat£3.1billion.
Chief executive Peter Truscott said: “We have delivered a very strong underlying performance during the year, driven by excellent progress towards our strategic objectives across all three businesses.”
0 The Aberdeen Western Peripheral Route is one of the major infrastructure projects it has worked on
He cheered the performance of Galliford Try’s Linden Homes division, which “continued to prioritise margin growth, benefiting from further standardisation and the robust control of overheads. This resulted in increased profitability in a
year with modest house price inflation.
“Volumes also grew reflecting the strength of our product offering and with the sector supported by Help to Buy, good mortgage availability and the cut in stamp duty for first-time buyers.”
Truscott added that the land market continues to be favourable, allowing the company to buy land at “robust margins, in the right locations for our new standardised product”.
The board is recommending a final dividend of 49 pence per share which, subject to AGM approval, will be paid on 5 December.
Together with the interim dividend of 28p per share paid in April, this will result in a total dividend of 77p, down 10 per cent.