Galliford Try has today (15 July) provided an update on trading for the year ended 30 June, with a gross loss of 5% it remains optimistic about the future
The majority of the Galliford Try’s construction sites in England continued operations under strict safety guidelines throughout the Covid-19 lockdown.
All sites in Scotland were closed in accordance with Scottish Government requirements. Work was allowed to resume in Scotland from late June.
Galliford Try used Government’s Job Retention Scheme during the period and the majority of affected employees have now returned to work. When responding to the pandemic, temporary salary reductions of between 15% and 25% for most senior employees were made.
Along with the cost of implementing new operating procedures and lengthened site programmes, this led to a reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of 5%.
Margins expecting to improve
Bill Hocking, chief executive, said: “Health and safety remain our top priority. All our sites have implemented new operating procedures, in accordance with Government and industry guidance, to ensure the safety of all employees, subcontractors and others attending our sites.
“Early in the pandemic, we established a Covid-19 Working Group, to establish clear new working practices and share good practice across the Group.”
“Productivity levels on our sites have gradually increased since the beginning of the lockdown, and we start the new financial year with productivity close to normal and operating margins expecting to improve in line with our target.
“Throughout the lockdown we have been encouraged by the pipeline of new opportunities across our chosen sectors in the public, regulated and private markets together with a number of significant contract wins.”
- £20bn Crown Commercial Service’s Construction Works and Associated Services Framework
- £1.5bn YORbuild Major Works Contractors Framework in the north of England
- £100m of education facilities including the £42m National Manufacturing Institute Scotland for the University of Strathclyde
- £85m mixed-use development at Tottenham Hale, London
- £54m women’s national prison facility at Cornton Vale, Stirling.
On 31 March Galliford Try suspended financial guidance, in response to the Covid-19 uncertainty.
Although it is too early to restore guidance, Galliford Try has entered the new financial year with a carefully risk-managed order book of £3.2bn, and with 90% of the new financial year’s planned revenue secured.
Bill Hocking said: “Following the disposal of the housebuilding businesses earlier in the year the group is firmly focused on its core strengths of regional building, highways and environment.
“Going forward we are well placed to benefit from the planned spending in our chosen sectors and to support the rebuilding of the economy and I will provide an update on our strategic priorities at results in September.
“While these are challenging times, I look forward to the new financial year with confidence.
“The group is well capitalised with a strong order book and is well-positioned to make progress on its strategic priorities and margin improvement targets.”