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Galliford Try 'cautiously optimistic' for 2010

Galliford Try has said it is making good progress on its strategic plans for the expansion of its housebuilding division and is cautiously optimistic about the year ahead.

In a trading update ahead of its half year results for the six months ended 31 December 2009, Galliford Try said the housing market continues to demonstrate the stability that returned in 2009.

At 31 December 2009, total housing sales reserved, contracted or completed stood at £324 million compared to £281 million a year ago.

Some £235 million of that is for the current financial year to 30 June 2010, representing 75 per cent of projected sales for the year, compared to 70 per cent at the same point last year.

Galliford Try built 638 homes in the first half at an average selling price of £181,000, compared to 964 homes for the same period a year prior at an average selling price of £171,000.

But the lower unit completions in the first half were a result of minimal stock levels.

The company has since made good progress in bringing land acquisition opportunities to fruition, following the raising of a net £119 million in the rights issue that was completed during October.

Galliford Try’s total landbank at 31 December 2009 is 8,800 plots, compared to 7,750 a year ago.

Terms have been agreed to acquire a further 1,600 plots by the end of the financial year in June 2010.

The group’s construction business continues to perform well in challenging markets.

The contracting order book at 31 December 2009 stood at £1.75 billion, 3 per cent higher than at the same point last year.

Some 87 per cent of that work is for the public and regulated sectors and 92 per cent of the firm’s anticipated turnover for the financial year to 30 June 2010 has been secured. 

The group has focused on cash generation and now holds net cash of around £100 million at 31 December 2009 compared to £34.1 million at 30 June 2009 and £1 million a year ago. 

The trading update said: “The board remains cautiously optimistic on the outlook for the housing market and is encouraged by the progress being made on transforming the landbank to enable the group’s strategic expansion plan for housebuilding to be delivered.

“The spread and depth of our construction business across its market sectors will continue to be a key strength as overall market conditions are expected to remain challenging for the foreseeable future.

“Overall the board considers Galliford Try is well positioned to take advantage of opportunities as they arise.”