Galliford Try profit up 56% despite difficult housing market

Galliford Try has reported strong half-year results to 31 December 2007 despite what it calls the “increasingly difficult” housing market.

The hybrid contractor/ housebuilder reported a 48% jump in turnover from £606.8m in the second half of 2006 to £897.9m. Pre-tax profit was up by 56% to £33.8m, ahead of City forecasts.

Its housebuilding division had a full six-month contribution from Linden Homes, which it bought for £245m in March 2007, and posted an operating profit of £32.6m. The margin was 14.2%, down slightly on 14.5% in 2006, and the average selling price was £231,000 compared to £238,000 in the previous year.

Chief executive Greg Fitzgerald said: “The housebuilding market remains challenging, although the resilience of our business model and our good cash management have mitigated the effects as the market has worsened. We remain cautious on the outlook for the division, particularly if current market conditions persist throughout the spring selling season.”

The company added: “The change to a reducing interest rate environment has had little effect on consumer confidence so far.”

The figures were boosted by strong performances in its building and infrastructure divisions.

Operating profit at its building arm climbed 35% to £6.5m on turnover of £339.2m, representing a margin of 1.9% (2006: 1.8%).

Meanwhile the infrastructure division posted operating profit that was up by 51% to £6.2m with turnover of £250m – a margin of 2.5% (2.4%).

Fitzgerald said: “While the Board views the economic outlook with some caution, the group’s financial strength and broad sector exposure will stand it in good stead during challenging times.”