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Infrastructure boosts Galliford Try profits

Galliford airport

Galliford Try says civils work in roads, rail, aviation and water helped it increase half year pretax profits by 19%, taking the figure to £63M.

Construction margins dipped a bit, this was down to older jobs as the underlying profit in the construction sector has been strong.

The group’s chief executive for construction and investments Bill Hocking said: “The civils side has been fairly steady. Roads is doing well, we’re working with Highways England on smart motorways.”

The results were for the half year ending December 31, 2016. In the construction division revenue was slightly up on the previous half year at £742M, while operating margins dipped to 0.4%, down from 1.2% for the first half of the year. The group said: “Operating margin continues to be constrained by the resolution of legacy contracts; margins on new projects support improving divisional returns in future years.”

The group said it has a ‘disciplined approach to contract selection’ with the order book at £3.4bn.

Hocking said: “We are certainly very selective. There might be a few more schemes coming through from clients that don’t often have big construction projects. Roads, rail etcetera procurement remains fairly progressive. There are a few one-off clients that look for more onerous conditions and as a general rule we won’t bid for those.”

The group is part of the Momentum Infrastructure consortium, which has four bids in for different High Speed 2 contracts.

Hocking added that the group had not seen any Brexit impact yet.

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