Galliford Try plans to raise £150M to cover losses incurred on a major roads joint venture which it was working on alongside Carillion at the time of the latter’s collapse last month.
In its half year financial report this morning, Galliford Try noted an exceptional charge of £25M in the wake of Carillion’s liquidation, and said “additional financial obligations” from the Aberdeen Western Peripheral Route contract would require a capital raise of £150M.
The company had been in a JV with Carillion and Balfour Beatty on the construction of the Aberdeen bypass.
Shares in the construction company fell by 13% when trading began this morning, plummetting from 885p to 772.5p before recovering to 815p at the time of writing.
Galliford Try chief executive Peter Truscott said: “We have reviewed the impact on our business from the compulsory liquidation of Carillion, which has resulted in a further reassessment of the likely out-turn from our participation in the Aberdeen Western Peripheral Route (AWPR) joint venture, leading to an exceptional charge of £25m.
“Reflecting the additional financial obligations arising from this contact, we have today announced our plans for a capital raise of £150m.”
The half year report, for the six months up to 31 December last year, revealed construction revenue of £823.6m up from £742m in the same period in 2016, while pre-exceptional operating margin had improved to 0.9% from 0.4%. The company said it was continuing to operate well within its banking covenants and has a pension deficit of £2.7m.
Truscott added: “While we remain cautious of the impact of the current political uncertainty and the medium-term outlook for the macro economy, we believe our focused strategy, strong order book and disciplined approach will deliver further growth and shareholder value.”