Galliford Try has posted pre-tax profits of £135M for 2016, up 18% from the year before.
In construction there is an order book of £3.5bn, with a margin of 1.1%, down from 1.2% in 2015, with 85% of this year’s planned revenue secured compared to 90% for the same time in 2015.
The chief executive of its construction and investments business Bill Hocking said that although Brexit had not seen an immediate impact on the company’s finances, the post-Brexit political fallout had seen a little more caution in public spending.
“It’s inevitable that when there’s political turmoil there will be a bit of a hiatus in public spending. Government departments become a bit more risk averse. We’ve seen a bit of a hiatus in work coming through public sector, but remain optimistic that there will be a bit of a loosening of public spending which plays into infrastructure.”
While the industry awaits the green light for major infrastructure jobs such as High Speed 2 – Hocking said there was confidence in the industry that it would go ahead – he explained that it was the smaller jobs that gave the company and the wider economy the more immediate impacts.
Commenting on a slight decrease of 0.1% in the firm’s construction margins, he said: “It’s a steady performance, we have not taken any big hits over the years and have been profitable throughout.
“We do have some projects that were won in more difficult times, these can take years. It means we have revenue coming through our books but little margin. It’s not a problem but it dilutes our performance.
“Everything we’ve won in last 18 months to two years is performing well in terms of cash and margin. I’m confident that once we’ve got these jobs behind us we’ll be up and away.”
He added that Galliford Try had a great baseload of work because it is on “virtually every major framework” and that, allied with its geographical spread and work on lots of small projects, suited its business model.
Hocking said that for the next year to 18 months, he is going to focus on the bottom line of the business, not the top line. Rather than focus on growth, the near future is about improving business management systems and developing staff.
“Lean, intuitive, easy-to-use systems mean people will use them because it helps them to do their jobs more efficiently and get better, more consistent outcomes,” he said.