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Sat August 18 2018

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Galliford Try rides out Aberdeen bypass woes

17 Jul Galliford Try's Construction division has seen its balance sheet turn from a net cash position of £137m to net debt of nearly £30m over the past year, and it is all down to the Aberdeen Western Peripheral Route project.

Work on the Aberdeen Western Peripheral Route [Photo: Transport Scotland]
Work on the Aberdeen Western Peripheral Route [Photo: Transport Scotland]

If it wasn’t for the Scottish road, it would be champagne all round at Galliford Try, toasting a successful year’s business.

Earlier this year Galliford Try held a £157m rights issue to cover the costs of the Aberdeen Western Peripheral Route/Balmedie to Tipperty (AWPR) project. The company is part of the Aberdeen Roads Ltd (ARL) consortium, alongside Balfour Beatty, that has a fixed price £745m contract for the job. Carillion had also been part of the team but when that firm collapsed it increased the cash commitments on the project for the other two by more than £150m.

Galliford Try plc will report its financial results for the year ended 30th June 2018 in September. Meanwhile chief executive Peter Truscott provided a reassuring tradaing update to shareholders today. He said: “Galliford Try has achieved a strong underlying performance in the financial year and continues to make good progress against its growth plans to 2021 across all three businesses.

“Linden Homes has delivered sales growth in line with expectations and at a further significantly improved operating margin, and enters the new financial year with sales exchanged and reserved of £366m.

“Partnerships & Regeneration continues to make excellent progress against the stretching growth and margin targets set for the business, significantly increasing revenue and profit.  The business has a strong order book, benefiting from growing demand and opportunities in both contracting and mixed tenure.

“Construction's underlying performance is good with current and new projects expected to deliver improved margins, operating on multiple secured frameworks and in our chosen sectors. The Aberdeen Western Peripheral Route joint venture continues to make progress on site, with sections of the road already opened to traffic, and substantial completion expected to be achieved this summer.  We continue to anticipate a further exceptional charge in the second half, in line with previous guidance (i.e. expected to be lower than the charge of £25m taken in the first half), and the final out-turn remains dependent upon the result of several significant claims.”

He concluded: “The group expects to report strong pre-exceptional full year results, in line with previous guidance, and net cash at 30th June 2018 of £97m (2017: £7.2m), with average net debt for the year below previous guidance at £227m (excluding the benefit of the rights issue receipt of £150m net).  The outlook for the current financial year remains in line with management's expectations.”

MPU

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