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New leaders named for Galliford Try while 70 staff exit after Miller Construction buy

Exclusive: New directors have been appointed to three of Galliford Try’s regional building businesses following its acquisition of Miller Group’s construction arm.

Construction News can also reveal that 70 staff have lost their jobs as part of the acquisition process, due to “overlaps” in two offices based in Scotland and the North-west.  

Galliford Try construction chief executive Ken Gillespie told Construction News the enlarged group “had around 700 people coming in, of which we’ve lost about 70”, after overlaps occurred with two Miller Construction offices in Glasgow and Newton-le-Willows.

He said the 70 roles were “back of house” losses rather than operational and management exits and revealed the additions to Galliford Try’s senior management team (see box).

Galliford Try announced the acquisition of the Miller Group’s construction arm for £16.6m in July.

Senior team

Two senior directors have been appointed to the construction & investments board: Ian Jubb, managing director North & Scotland, and Tom de la Motte, managing director Integrated solutions.

In addition, three managing directors have been appointed to run three of the company’s regional building businesses. They are:

Mr Gillespie was speaking after the group posted a record pre-tax profit of £95.2m for the year ending 30 June, up 28 per cent from £74.1m the year before.

Group revenue for the period rose 21 per cent to £1.8bn compared with £1.5bn, with dividend per share increasing 43 per cent to 53p from 37p.

The growth was mainly driven by the group’s housebuilding division, which saw its operating margin increase to 15.1 per cent compared with 13.3 per cent the year before.

“The board will be looking externally and internally for Greg’s replacement but I think it’s too early for me to decide whether or not that is something I would like to do”

Ken Gillespie, Galliford Try

Mr Gillespie said the division’s operating margins would increase to 18 per cent by 2018 through better efficiencies within the business as well as increasing the division’s hurdle rates on land acquisitions, which currently stand at 23 per cent.

But operating margins for Galliford Try’s construction division dipped to 1 per cent from 1.6 per cent the year before.

Mr Gillespie said this was due to the supply chain contracting “to survive through the recession”, which, coupled with an increase in volumes, was driving inflation and impacting margins.

Galliford Try would hope to “progressively” increase margins to 2 per cent by 2018 as the market improves, he said.

He said there was a greater need for construction than the industry could currently deliver, which would result in contractors’ prices increasing.  

“And from that perspective, we haven’t got the locked-up inflationary costs that we can’t recover in our legacy contracts. That naturally improves the margin.”

Galliford Try group chief executive Greg Fitzgerald announced he would be retiring from the role by the end of 2015, after 33 years with the company.

For seven of the last nine years that Mr Fitzgerald had led the company, Mr Gillespie said he had been on “the right-hand side of him looking after construction” and said he would be a “tough act to follow”.

Asked whether he would be interested in the role, Mr Gillespie said it was “too early to call”.

“It’s all very fresh. What I would say is that the board will be looking externally and internally for Greg’s replacement but from a personal perspective, I think it’s too early for me to decide whether or not that is something I would like to do.”

The Galliford Try board has begun the process of appointing Mr Fitzgerald’s successor.

He said: “As our full-year results announced today demonstrate, the group is in great shape, with a strong management team, and very well equipped for the future.”

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