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Galliford Try’s final legacy job to complete this summer

Galliford Try’s construction boss Bill Hocking has told CN that the problem Aberdeen Western Peripheral Route will be completed by the summer.

Mr Hocking was speaking to CN following Galliford Try’s half-year results, in which the firm revealed it was looking to raise £150m in equity to cover costs on the troubled £550m AWPR project.

The construction business chief executive said the Scottish bypass was the “last of the legacy contracts” on which Galliford was still working, and that its completion this summer would represent a “milestone” for the contractor.

“It’s a behemoth of a job,” he said. “We will get it over the line in the summer, which is a milestone that we’re very much looking forward to.”

Last week former Carillion chief executive Richard Howson described bidding for the AWPR as one of his “biggest regrets”.

Asked by CN about Galliford’s decision to bid for the project, Mr Hocking suggested he would not have bid had he been at Galliford at the time.

“Put it this way: I was at Skanska when both these jobs came up and I decided not to bid on them,” he said.

Mr Hocking said he had made internal changes to stop the firm bidding on risky contracts since he took on the role at Galliford in August 2016.

“Since I’ve arrived we’ve changed the process and the culture in our attitude to risk,” he said.

“We’ve put in place a process whereby any attributes on a project that we don’t like – such as onerous terms and conditions, a bad cashflow profile, a client we haven’t worked with before, a client that hasn’t got the funding to pay us – the flags come up and we’ve either refused to bid them or we give them special attention, but more often we won’t bid them.

“We pointed out the pain some of these legacy contracts were causing us.

“We don’t want to and can’t remain in that position, so we strengthened our process and we instilled the discipline that, regardless of how good things look on the face of it, we’re not bidding.”

Mr Hocking said this change had resulted in Galliford’s order book increasing by £100m, which he said vindicated the approach.

“Behind that we’ve actually grown our order book from £3.4bn to £3.5bn, which shows that when you can be selective and be selective bidding on the right work, it pays dividends,” he told CN.

Galliford’s construction boss added that he hoped to also see further improvement in the firm’s profit margin, with the aim of driving this above 2 per cent.

“We’ve said we want 2 per cent and I’ve said I’d be disappointed if we didn’t do a lot better than 2 per cent,” he said. “I think 2.5-3.5 is where we want to be.”

 

Readers' comments (1)

  • It begs the question: are losses on AWPR the reason why Galliford are becoming chronic late payers on other projects, exceeding their own payment notices by a month, sometimes two months

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