Galliford warns over no-deal Brexit threat to new homes market

Builder Galliford Try has warned over a potential “severe” hit to consumer confidence and disrupted imports of critical materials if the UK crashes out of the EU without a deal.

The Linden Homes owner said the impact could be felt in the new-build property market in particular.

It said it was putting in place contingency plans to ensure supply of materials, but stressed it could not protect itself entirely.

The group said: “If the UK leaves without a deal the biggest impact we foresee is the effect on our markets, and on Linden Homes’ market in particular, of a potential severe decline in consumer confidence and economic activity in general.

“We believe our business planning is as prepared as possible for this uncertainty.”

It added: “We have made specific arrangements where we foresee the potential for disruption to the import of critical materials and products, though noting that it is impractical to try to insulate our business entirely.”

The comments came as it posted full-year results showing a 4% fall in pre-tax profits to £53.8 million for the six months to December 31.

On an underlying basis, pre-tax profits rose 4% to a record £84.2 million.

Chief executive Peter Truscott said the group was now expecting full-year results towards the upper end of City forecasts for pre-tax profits of between £158.8 million to £192.5 million.

Shares lifted 5%.

The group said its Linden Homes arm had seen a “positive start” to the spring selling season, but cautioned consumer confidence and political uncertainty would be key to the strength of the property market.

Average selling prices for private homes fell 5% to £352,000 as it shifted away from the under-pressure market in London and the South East.

Linden Homes’ interim earnings fell 5% to £76.8 million, while underlying operating profits in the construction arm dropped 12% to £6.3 million amid cautious bidding and project deferrals .

This was partially offset by a 34% surge in operating profits to £14.5 million at its partnerships and regeneration division.

Analysts at Liberum said: “We believe that the housebuilding business (Linden) is seeing impressive improvement under CEO Peter Truscott, and the partnerships and gegeneration division is well placed to deliver rapid growth.”