Covid helps send Galliford Try further into red

Galliford Try has said the covid-19 pandemic is to blame for the firm sliding to a £60m pre-tax loss last year with the firm’s building division bearing the brunt of the crisis.

The firm, which sold its Linden housebuilding and partnerships business to Bovis Homes, now renamed Vistry, at the start of the year, said it had been forced to furlough 1,200 staff during the peak of lockdown which saw dozens of its 250 sites shut down.

Galliford Try, which employs just under 3,000 people, took £7m from the government’s Jobs Retention Scheme in the year to June and stopped taking payments at the end of last month.

Chief executive Bill Hocking said the firm would not be following the example of Morgan Sindall and returning the money.

“We’re not contemplating paying it back,” he said. “It has enabled companies like us to bounce back.” Hocking added that the firm topped up the salaries of those staff it was forced to furlough.

Hocking (pictured) said the group lost around £200m of revenue because of the lockdown with the firm’s building business suffering a pre-exceptional loss of £52m during the period. This was up from a £9.5m loss in 2019.

The firm said around a third of its work at its building business was in Scotland which had a stricter lockdown than south of the border.

But its infrastructure business fared better with the firm’s pre-exceptional loss narrowing from £5.5m in 2019 to £1.1m. “Infrastructure kept going during lockdown,” Hocking added.

The division was boosted by a £28m gain from its settlement with Transport Scotland on the Aberdeen bypass scheme.

The firm made around 300 people redundant during the year with the losses split equally from normal churn rates, redundancies following the sale of the housing business and because of covid.

Pre-exceptional pre-tax losses at Galliford Try hit £59.7m in the year to June from £17.2m last time although the Aberdeen settlement helped the firm narrow reported pre-tax losses to £34.6m from £64.5m in 2019. Turnover fell £300m to £1.1bn.

It said it expected to return to profit this year with margins up to 1.6%. Its order book stood at £3.2bn with 90% of revenue secured for the year ahead.

The firm’s net cash at the year-end was £197m, from a 2019 net debt of £57m, with average month-end net cash, in the six months since the sale of the housebuilding arm, standing at £141m.

Galliford Try said it had cancelled an interim dividend in March and was not planning to pay one for the year to June. It said these would return once the firm was back in the black.