Galliford Try warns on margins

Galliford Try has said margins will be off by around 5% this year because of the lockdown caused by the covid-19 pandemic.

In a trading update ahead of its annual results being released in September, the firm, which is building a new £54m women’s prison at Stirling and new £85m flats for developer Argent Related at Tottenham Hale in north London, said productivity on its sites was now normalising.

The majority of its sites in England kept going during the lockdown but its jobs in Scotland only reopened towards the end of last month.

The firm, which at the start of the year completed the £1.1bn sale of its housebuilding and regeneration businesses to Bovis Homes, which has since been renamed as Vistry, said gross margins had been hit as the lockdown coincided with the final quarter of its financial year which ended on 30 June.

It said: “Along with the cost of implementing our new operating procedures and lengthened site programmes, this has led to a material reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of c5%.”

Galliford Try said it had now brought most furloughed staff back to work.

Its order book at the year end was up 10% to £3.2bn with 90% of revenue already secured. The firm said its net cash position at the year end was £195m with average month-end cash during the six months to June standing at £140m.