Galliford Try’s pretax profits rose by 4% year on year to £84.2M for the six months ending December 31, despite additional losses from the troubled Aberdeen Western Peripheral Route (AWPR) project.
The contractor’s half year results revealed that the company had taken a further £26M hit on the £745M AWPR project, even though construction work was finished.
Late last year, Galliford Try revealed the total cost overrun for the AWPR project was £143M. The project has suffered from the collapse of Carillion, hazardous conditions caused by the Beast from the East storm, and technical issues surrounding the River Don crossing.
Earlier this month, Scottish transport and infrastructure secretary Michael Matheson revealed that the already delayed Aberdeen bypass would not open until assurances about its impact are received, despite the completion of physical work.
Matheson said the Scottish government must receive assurances on the “impact of remedial work” and “changed costs of future maintenance” for the £745M Aberdeen bypass before it opens.
The latest figures also revealed that Galliford Try’s first half revenues were down 5% to £1.42bn from £1.49bn in the same period last year. Net debt fell to £40.1M from £84.9M at the same point last year.
In addition, Galliford’s adjusted dividend dropped 18% to 23p from 28p this time last year.
Galliford Try chief executive Peter Truscott said: “The group is well capitalised and average net debt is below previous guidance, driven by focused working capital management over the period.
“We were delighted to achieve completion of the AWPR with final handover in progress, successfully delivering a vital and major piece of infrastructure to the local community. We continue constructive dialogue with our client regarding important and recognised claims.”
He added: “We remain cautious of the impact of the current political uncertainty on consumer and business confidence, and the medium-term outlook for the macro economy, but believe our focused strategic objectives, strong order book and disciplined approach will deliver a full year out-turn toward the upper end of the analysts’ current range.”
In statement responding to the results, investment banking and financial services company Canaccord Genuity commented: “Underlying first half results look broadly in line, with [the] partnerships and regeneration [division] delivering the best performance and Linden Homes seeing a decent uplift in margins but a fall in profits. Construction is holding its own on an underlying basis. The AWPR project seems to be physically complete but not yet signed off and handed over with £6M of incremental exceptional costs incurred.”
Like what you’ve read? To receive New Civil Engineer’s daily and weekly newsletters click here.