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Galliford Try posts record profits as housebuilding soars

Galliford Try has confirmed record profits at the top end of analysts’ expectations, of £74.1m in the year to 30 June 2013, up 17 per cent on 2012.

The firm said that record profits were achieved primarily by an improved margin in housebuilding of 13.1 per cent (2012: 11.8 per cent).

A reduction in construction margin to 1.7 per cent (2012: 2 per cent) was constrained, it said, by its “disciplined approach in continuing challenging markets”.

In July, Construction News reported that analysts were predicting adjusted profit before tax for the year ending 30 June at between £72m and £75m.

In housing, it said the South-east remains the strongest market and has led pricing growth but that there is improving demand in some regional centres. The average private selling price increased by 5 per cent to £262,000 (2012: £250,000). Its gross margin improved from 17.6 per cent to 19.6 per cent, leading to an operating margin of 13.1 per cent.

The firm opened a new housing office for the East of England, in Chelmsford and is working with the construction division to build multi-use schemes, including its work building 147 apartments at Gloucestershire County Cricket Club (pictured), where it is also carrying out improvements to the cricket ground.

At 30 June 2013, its landbank was a record 11,300 plots. This represents the total number of plots owned and controlled, including sites held under option, but excluding longer term strategic options. The gross development value of its landbank increased 14 per cent to £2.76 bn (2012: £2.43bn).

At the year end, Galliford Try’s order book was £1.7bn, compared with £1.65bn in 2012.

Of this, 41 per cent was in the public sector, 38 per cent was in regulated industries and 21 per cent was in the private sector.

More than half (53 per cent) of its order book is in frameworks and 58 per cent has been secured on a basis other than price competition.

Chief executive, Greg Fitzgerald said: “We have made excellent progress as a group in the financial year and delivered a record profit before tax. We have also significantly increased the full year dividend reflecting the board’s confidence in the future.

“Housebuilding has delivered another very strong year of trading. This has been achieved in a disciplined manner following a doubling in size of the business in the preceding three years. Our deliberate investment in high return land opportunities, particularly in the South and South East, together with a greater focus on margin performance and efficiency gains and an improving market means we are well placed to deliver further good growth.

“Construction has achieved another impressive performance against the background of a market that remains challenging, by focusing on its principles of disciplined contract selection, protecting margin and prioritising cash management. There are encouraging signs of an improving market on which we are well positioned to capitalise.”

More to follow.

Construction:

Revenue: 2013: £912.7m (£924.8m)

Profit from operations: £15.1m (£18.9m)

Operating profit margin: 1.7 (2 per cent)

Order book: £1.7bn (£1.65bn)

 

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