Galliford Try (GFRD) restored some market faith by confirming that pre-tax profits for 2019 would be in line with market expectations, after contract delays and rising costs caused it to restructure its construction business earlier this year.
The shares rallied as much as 8 per cent after the housebuilder said pre-tax profits for the year to 30 June would meet the £113m-£116m range forecast, after including £40m in exceptional items relating to delays associated with the Aberdeen by-pass contract and the downsizing of its construction activities. Net debt at the end of June was £60m, compared with a £98m net cash position at the same point in the prior year.
Chief executive Graham Prothero cited “strong margins” and “robust demand” at Linden Homes, although the average weekly sales rate per site declined to 0.56 across an average 80 outlets, from a rate of 0.59 across 85 last year. The housebuilder has been reducing its exposure to the weakening higher-end part of the housing market in London and the south-east, which led to a decline in the average sales price to £351,000, from £367,000.
Partnerships and regeneration increased sales carried forward by £24m to £184m and boosted the land bank by almost two-thirds to 5,300 plots.
However, there was no more news on the ongoing £38m dispute with an unnamed client over three contracts, where costs were significantly impacted by the client’s scope changes. A spokesperson for the group said it had received “two adjudications in its favour and is confident of its recovery”. The group remains in negotiations with a client over a claim relating to the now-completed Aberdeen Western Peripheral Route.
