Galliford Try has confirmed that it intends to shrink the size of its construction business after issuing a profit warning.
In a statement, the firm declared that a strategic review is set to result in it reducing the size of its construction arm and “focusing on its key strengths in markets and sectors with sustainable prospects for profitability and growth”.
The company predicted that the outcome of the review would reduce its pre-tax profits for the financial year ending in June 2019 by between £30M to £40M lower than its previously forecasted £156M.
The statement added: “The board anticipates that this review will result in reduced profitability in the current year reflecting a reassessment of positions in legacy and some current contracts and the effect of some recent adverse settlements, as well as the costs of the restructure.”
Galliford Try also revealed that the single largest readjustment would concern the Queensferry Crossing project as it had “recently increased its estimated final costs on the project”.
The firm had been working on the project in a joint venture with Dragados, Hochtief and American Bridge International and had to meet costs of delays due to high winds.
Meanwhile, the firm was also hit last year by the fact it was obliged to complete work on the £1bn Aberdeen Western Peripheral Route along with Balfour Beatty, following the collapse of their joint venture partner Carillion at the beginning of 2018.
Galliford Try’s board confirmed that it would be finalising its conclusions from the strategic review “in the next few weeks” and that it would share the details of its review along with a further update on group trading in a scheduled statement on 21 May.
The company’s statement has arrived after it last month shook up its board following chief executive Peter Truscott’s announcement that he was leaving to join competitor Crest Nicholson.
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