In a trading update Galliford Try said that its housebuilding activities continued to make good margins and the underlying construction operations were performing well.
“The business is refocused to deliver an improved future performance,” the company said of the restructured construction division.
A year ago Galliford Try had net cash of £98m; today it has net debt of £60m, with average net debt over the year of £187m.
The Linden Homes and Partnerships & Regeneration house-building businesses underpin Galliford Try’s finances. Linden Homes’ revenues have been down in the past year, with 3,229 unit completions in the year to 30th June 2019, including joint ventures (2018: 3,442 units) at an average private selling price of £351,000 (2018: £367,000).
Although Galliford Try Construction is free of many former woes, it is still embroiled in legal arguments over the loss-making Aberdeen Western Peripheral Route project, built in joint venture with Balfour Beatty. The JV continues to negotiate on a significant claim with the client and is gearing up to go to formal dispute resolution.
Chief executive Graham Prothero said: “The group has continued to perform well, supported by good housing demand. We expect our full year results and average net debt to be in line with previous guidance.
“We are making strong progress against the operational targets we set out in 2017. We are reviewing our 2021 volume targets to ensure that growth is controlled, and our gearing is managed. Despite the weaker economic outlook, Linden Homes continues to see robust demand, with operating efficiencies driving strong margins and improving customer satisfaction. Partnerships & Regeneration is well on track with its aspirations for exciting growth in both revenue and margins, with some key wins in the period and further good opportunities across the market. We are pleased that the restructure of the Construction business is now complete. The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively. I look forward to the next financial year with the appropriate strategic priorities in place across the group."