Low land prices lead Galliford Try to £6.4m profit

Hybrid Housebuilder and construction firm, Galliford Try, has reported a pre-tax profit of £6.4m for the six months ending 31 December, after exceptional items, compared to a £37.5m loss in the same period of 2008.

The group reported a fall in turnover from £774m in 2008 to £570m in 2009 as well as a fall in completions from 964 units to 638. Affordable housing completions dropped from 292 to 221.

In September 2009, the group announced it would take advantage of low land prices and increase land acquisition capabilities by raising additional finance though a £119m rights issue. The group reported that this strategy is paying off. So far it has increased its landbank from 7,600 plots at the end of December 2008 to 9,300 plots. Forty per cent of these have been bought at current low market values.

A statement in the group’s results read: “Having raised the finance, the group is now able to take advantage of opportunities to buy land at current market prices, and on which it is expecting to achieve attractive returns.”

Commenting on the results, Greg Fitzgerald, chief executive, said: “Against the backdrop of a more stable housing market we have made excellent progress with the first stage of our transformational housebuilding strategy for our southern-based business, bringing land acquisition opportunities with attractive potential returns to fruition.

“The market for construction is challenging but our quality order book and the spread and depth of our industry-leading business across its market sectors continue to be key strengths that will enable us to respond quickly to a market upturn once it occurs.”