Although Galliford Try only paid £1m to the administrators of NMCN for the failed contractor’s water business, it spent an additional £5.3m on integration and restructuring costs, as well as legal and professional fees.
The company has also had to spend £3.4m on a cloud-based enterprise resource planning (ERP) system, as required by accounting guidance.
Galliford Try’s revenue for the half year to 31st December 2021 increased 10% to £594.0m (H1 2021: £541.7m).
Pre-exceptional operating profit before amortisation increased to £6.9m (2021 H1: £3.9m). Building generated profit of £8.4m (2021 H1: £6.0m), representing an operating margin of 2.2% (H1 2021: 1.6%), and Infrastructure generated profit of £4.3m (2021 H1: £2.4m), representing an operating margin of 2.1% (2021 H1: 1.5%). The combined divisional operating margin was 2.2% (2021 H1: 1.6%)
With total exceptional items of £9.7m incurred in the period, the bottom line was a loss before tax of £2.6m for the first half.
Chief executive Bill Hocking said: "The group has continued to perform well in the first half of the financial year, successfully managing industry-wide material shortages and inflation. I am pleased to report that we are making good progress against our sustainable growth strategy, and our target of 3% divisional operating margin across Building and Infrastructure.
“The acquisition of NMCN’s water businesses is fully aligned with our strategy and offers significant opportunity for our growing Environment business – enhancing our water, engineering, off-site build and asset optimisation capabilities.”
He added: “I am excited about the future given our excellent people, strong balance sheet, market leading sector positions, investment in supplier relationships and high-quality order book. The group continues to trade well and is well placed to continue to deliver strong performance and long-term sustainable value for all our stakeholders."
In October last year Galliford Try paid £1m to the administrator of NMCN for the water business of NMCN, including Nomenca and Lintott. As part of the deal Galliford Try took on approximately 900 NMCN employees. [See our report here.]In its last audited accounts, for the year to December 2019, the NMCN Water segment generated operating profit of £7.6m on turnover of £282.6m. Its gross assets were valued at £70.0m.
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