Galliford Try will seek to raise £150m in equity as costs on the troubled Aberdeen Western Peripheral Route spiral.
In its results for the six months to 31 December 2017, the contractor revealed a £25m exceptional charge from the AWPR project in the wake of JV partner Carillion’s collapse.
Galliford said it had the option of taking capital away from its Linden Homes and Partnerships and Regeneration business to cover further costs on the project following Carillion’s liquidation.
However, it will instead go to the market and issue new equity in the next six weeks.
The contractor had initially said it expected to share an £80m hit on the job with Balfour Beatty after JV partner Carillion collapsed in January.
Galliford Try chief executive Peter Truscott said today: “We have reviewed the impact on our business from the compulsory liquidation of Carillion, which has resulted in a further reassessment of the likely out-turn from our participation in the Aberdeen Western Peripheral Route joint venture, leading to an exceptional charge of £25m.
“Reflecting the additional financial obligations arising from this contract, we have today announced our plans for a capital raise of £150m.”
Aside from the problems related to Carillion, Mr Truscott said the company had delivered “a really good set of results” for the half-year.
Revenue for the Galliford Try group was up 14 per cent compared with the same period of 2016 to £1.4bn, but pre-tax profit was down 11 per cent to £56.3m, in part due to the £25m exceptional cost.
The group’s construction arm recorded an operating margin of 0.9 per cent on revenue of £823.6m. This was up from a 0.4 per cent margin on revenue of £742m in the same period the previous year.
Its Linden Homes arm recorded strong performance with an operating margin of 18.5 per cent and revenue of £436.8m – a 7 per cent increase from the £407.6m generated 12 months earlier.
There was a 55 per cent jump in revenue for the Partnerships and Regeneration arm, up to £223.5m, with growth partially driven by its acquisition of Drew Smith. Operating revenue for the half year was also up to 4.8 per cent.
Galliford Try’s share price was down 19.66 per cent at early afternoon.