Galliford Try has reported a 27% decrease in profits in its latest financial statement, as full-year revenues dipped by 7.5%
The annual results for the year ended 30 June 2019 came a day after Galliford Try said it had resumed talks with Bovis Homes to sell its Partnerships & Regeneration businesses.
Galliford Try’s profits fell to £104.7m from £143.7m in 2018, while revenues dropped from £2.9bn to £2.7bn.
The housebuilder was considerably impacted by £26m worth of costs it incurred on the Aberdeen bypass scheme, which it has now finalised.
Commenting on the latest full-year results, Graham Prothero, chief executive of Galliford Try, said: “The group has continued to perform well and our talented teams across the businesses have delivered a good performance despite the challenges faced.
“We continue to make great progress in Linden Homes, focusing on the benefits of standardising our range and rationalising process. We are building homes more cost-effectively while delivering well-designed, high-quality units which meet our customers’ needs, as reflected in our improving satisfaction scores. We continue to head towards our target of 80% of completions being Linden Collection.
“Partnerships & Regeneration has continued its excellent performance with both revenue growth and margin expansion, as we increase our delivery of affordable new homes. The acquisition of Strategic Team Group in Yorkshire accelerates our strategy of targeting growth in key regions around the country. We continue to see strong demand across the regions, and we are well placed to respond to this, working alongside Housing Associations, local authorities and other partners.”
Prothero added: “Construction’s result for the year has been impacted by challenges with both legacy and some current projects and by the restructure, which is now complete. The business continues to see good demand in its Building and Infrastructure divisions and is focusing on disciplined growth across its core sectors of building, water and highways, which we believe will deliver improved margins.
“The potential combination of our Linden Homes and Partnerships businesses with Bovis Homes represents a superb opportunity, enhancing the prospects for all three of our businesses to thrive as strategically focused and well-financed operations with excellent opportunities for growth. The transaction allows construction to continue trading as a standalone well capitalised business.”
Responding to the announcement, Steve Miley, senior market analyst at AskTraders, said: “The management pointed to Brexit uncertainties as a cause of the decline in revenue and is a testimony of the impact of uncertainty at this industry level.
“In a sluggish housing market, the combined residential businesses post acquisition could benefit from the economy of scale and compete with industry heavyweights like Barratt Developments and Persimmon. The new improved bid, if approved, would also provide Galliford with £300m in cash, much needed to refocus on its core business.”