Mr Palmer will be succeeded by former chief executive David Calverley who was replaced in July by Greg Fitzgerald.
At its Annual General Meeting today the contractor and house builder reaffirmed its target to raise the margin it makes on construction to 2 per cent by the end of 2006 from 1.5 per cent in the year ended June 30, 2005.
Turnover increased 5 per cent to £718 million from £687 million last year and pre-tax profits were up 22 per cent to £26.3 million from £22.7 million in 2004, at the time of its full year results.
The lion's share of profits came from housebuilding. Galliford said that the business model of its operation - concentrating on individually designed developments - had helped to insulate the firm from tough trading conditions in the housing market.
In construction, a steady flow of work - 80 per cent of which it secured in the public and regulatory sectors including water and rail - helped it secure a record order book worth £931 million compared to £703 million at the same time last year.
It is now looking to expand the business at a rate that will not compromise its margins. Water and rail remained two key sectors, working both through long-term frameworks and on single projects.
The majority of future work it carries out in health and education is likely to be procured through the Private Finance Initiative, Building Schools for the Future and NHS LIFT frameworks. It is working towards financial close on one of the biggest ever PFI school programmes, under which it will build 45 schools for Northamptonshire County Council.
The housebuilding division has either reserved, contracted or completed sales on properties worth £137 million accounting for 56 per cent of its targeted sales for the year ending June 30, 2006 - 19 per cent ahead of where it was at the same time last year.
Both the construction and housebuilding divisions are increasing their presence in affordable housing and it hopes to benefit from the regeneration of east London, prior to the London 2012 Olympic Games.
Galliford operates as a regional house builder with a strong presence in the south west, eastern counties and south east of England.