Galliford Try expecting more Aberdeen bypass pain

Galliford Try is expecting to take a further financial hit on the problem-plagued Aberdeen bypass job.

In a trading update released ahead of its full year results, the contractor said it was expecting to feel more financial pain from the project, which it is building in partnership with Balfour Beatty.

Peter Truscott, Galliford Try chief executive, said: "The Aberdeen Western Peripheral Route joint venture continues to make progress on site, with sections of the road already opened to traffic, and substantial completion expected to be achieved this summer. 

"We continue to anticipate a further exceptional charge in the second half, in line with previous guidance (ie expected to be lower than the charge of £25m taken in the first half), and the final out-turn remains dependent upon the result of several significant claims."

The firm, which is set to release its results for the year to 30 June on 12 September, said a deterioration in the net cash position of its contracting business "principally reflects the burden of the AWPR joint venture".

The company's construction arm is set to report debt of less than £30m for the 12 months to 30 June, compared to a positive cash position of £127m in 2017.

The project, which will be a year late when complete, has been hit with a series of issues include severe weather and the collapse of joint venture partner Carillion.

The construction arm has an order book of £3.3bn, down slightly from £3.5bn the previous year, with 86% of this being in the public and regulated sectors.

Truscott said Galliford Try's housing company, Linden Homes had "delivered sales growth in line with expectations and at a further significantly improved operating margin, and enters the new financial year with sales exchanged and reserved of £366m".

Galliford Try said its Partnerships & Regeneration business had recorded significant growth in both revenue and profit,

The regen arm has a £1.2bn contracting order book, up from £1.05bn in 2017.