Galliford Try posts 17% rise in profit

Galliford Try has posted a 17% hike in pre-tax profit, largely driven by an improved margin in the firm’s housing business, as the construction business held steady amid difficult market conditions.

Reporting its results for the year to 30 June 2013, Galliford Try posted group revenue of £1.47bn, down 2% on £1.5bn last year, though pre-tax profit rose 17.4% to £74.1m (2012: £63.1m), a rise primarily driven by an improved margin in the housebuilding business.

The housing business posted revenue of £639.6m, a slight increase on the previous year (2012: £636.7m), with an operating profit of £83.5m, up from £75.1m last year.

This gave the housing business an operating margin of 13.1% (2012: 11.8%).

The firm said it had seen an uplift in market confidence and reservations since the introduction of the government’s Help to Buy scheme in April, with about 31% of buyers using the scheme.

Galliford Try chief executive Greg Fitzgerald said: “Housebuilding has delivered another very strong year of trading. This has been achieved in a disciplined manner following a doubling in size of the business in the preceding three years.

“Our deliberate investment in high return land opportunities, particularly in the South and South East, together with a greater focus on margin performance and efficiency gains and an improving market means we are well placed to deliver further good growth.”

The construction business, which comprises building, infrastructure and partnerships divisions, reported revenue of £912.7m, down 1.3% on £924.8m last year, with an operating profit of £15.1m, down from £18.9m.

This gave the construction business an operating margin of 1.7%, down slightly on 2% last year.

The firm said the fall in revenue was in line with expectations.

The firm’s construction order book remained stable at £1.7bn (2012: £1.65bn).

Within the construction business, the firm’s building division posted increased revenue of £406.4m, up 12% on £363.5m last year, though operating profit slipped from £8.4m to £6.5m, with the operating margin falling from 2.3% last year to 1.6%.

The firm said its most successful market in the building division remained in southern England.

Within the construction business the infrastructure division posted revenue of £416.3m, down 12% on £470.9m last year, with an operating profit of £6.4m (2012: £8.8m). The margin in the infrastructure division fell from 1.9% last year to 1.5%.

The partnerships division posted revenue of £90m (2012: 90.4m), with an operating profit of £2.2m (2012: £1.7m).

Fitzgerald said: “Construction has achieved another impressive performance against the background of a market that remains challenging, by focusing on its principles of disciplined contract selection, protecting margin and prioritising cash management. 

“There are encouraging signs of an improving market on which we are well positioned to capitalise.”