Galliford Try plans £119m rights issue to boost housebuilding

Galliford Try has said it plans a rights issue of £119m to restart expansion in housebuilding, after a £26.9m group loss announced today.

In its preliminary results for the year ended 30 June 2009, the housebuilder and contractor also revealed that revenue had fallen 20%, from £1.83bn to £1.46bn.

The loss, which followed a £60.3m profit the previous year, was due to £50.4m writedowns of housing-related assets and redundancy costs of £1m.

Fitzgerald: "We now plan to recommence our growth strategy in housebuilding"

However, Galliford Try pointed to a sustained recovery in the housing market during the second half of financial year and said that sales made in first two months of new financial year had exceeded forecasts.

During the full year it completed 1,769 housing units, which was substantially down from the 2,524 built the previous year but an increase on the 1,526 homes completed in 2007.

The construction division achieved “record profits and excellent cash generation” during the year, with 84% of its contracting order book of £1.7bn coming from the public and regulated sectors.

The group ended the year with £1.7m of net debt, compared with net cash of £34.1m in June 2008. Its dividend was reduced from 3.0p to 1.5p.

Greg Fitzgerald, chief executive, said: “The actions we took to deal with the effects of the financial crisis on our markets during the year, and the financial strength of the group, mitigated the impact on our business and now enable us to move forward again.

“We are encouraged by the continuation of the improvement in the housing market over the summer. We now plan to recommence our growth strategy in housebuilding and take advantage of our strong presence in the public and regulated sectors to maintain our position as one of the UK's leading contractors.”