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Galliford Try performing well but is mindful of "competitive market conditions"

Galliford Try said its construction division had secured sales equal to 91 per cent of its forecast for the financial year to 30 June 2011, compared to 79 per cent at the same stage last year.

In a note of caution, Galliford Try said the full effects of October’s Comprehensive Spending Review had yet to be realised and that the current market is “competitive”.

A statement released to the Stock Exchange today said: “The economic outlook remains uncertain and the full implications of the government’s Comprehensive Spending review on both the Group’s housebuilding and construction activities are not yet clear.

“Our strong position in long-term frameworks for the regulated sector, and with a number of our blue chip private sector clients that are continuing with development programmes, has mitigated the effect of the current competitive market conditions.”

The construction division’s order book had been held at £1.75 billion, split 41 per cent in the regulated sector, 49 per cent in the public sector and 10 per cent in the private sector.

In addition, around 55 per cent of forecast sales for 2012 are also secured. This is a direct result of the long term nature of some of its regulated work.

The house building division has also been performing well, having increased sales by 14 per cent between July and November.

The firm has made sales of £312 million, of which £212m is for the current financial year, which represents over 50 per cent of projected sales secured in the first four months of the current financial year.

The statement also confirmed that Ian Coull, currently chief executive of Segro, will be joining the board as a non-executive director on 8 November and will take over as chairman when David Calverley retires at the end of June 2011.

Commenting on today’s trading update, Panmire Gordon analyst Andy Brown said: “The AGM update indicates that its housing operations have had a good summer, while construction continues to deliver solid performance. The market outlook remains challenging, so we are not changing numbers at this stage. The strategy is delivering and the valuation remains attractive, so we retain our positive stance.”