Galliford profits tumble 27% amid house-building tie-up talks with Bovis
Galliford Try has seen annual profits tumble 27% after widened losses in its construction arm just a day after it revealed revived talks to sell its house-building business to Bovis Homes.
The builder reported pre-tax profits of £104.7 million for the year to the end of June amid “challenges” in the construction division.
It comes after Bovis and Galliford revealed on Tuesday that they had restarted talks over a £1.1 billion house-building deal, which sent Galliford’s shares soaring.
Galliford would remain a separately listed construction-focused firm after the proposed house-building deal.
But its annual results showed the difficult year it has had in construction, with operating losses in the division widening to £61.5 million from £29.1 million a year earlier.
Galliford had warned over profits in April, indicating that it would take a hit of up to £40 million related to the Queensferry Crossing project.
It said in its latest set of results that a recent overhaul of its troubled construction division was “proving effective”.
The full-year figures also showed pressure on the house-building arm, with a 6% drop in house sales to 3,229, which were also completed at a lower average price – down 4% at £351,000 for private sales.
Chief executive Graham Prothero said: “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.”
On the proposed deal with Bovis, he said: “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.”