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Galliford Try shares gain as the housebuilder expects a strong performance for the year

Published: 08:38 17 Jul 2018 BST

Galliford
Liberum maintained a ‘buy’ rating on the stock, saying the shares are 'very cheap'

UK housebuilder Galliford Try plc (LON:GFRD) said it continues to expect a strong performance for the year and is making good progress towards its 2021 targets, sending its shares higher on Tuesday.

The company’s Linden Homes business delivered 3,442 housing completions in the year to end of June 2018, up from 3,296 last year.

The average private sales price rose to £367,000 from £354,000.

The sales rate for the year was 0.59 units per site per week from 85 average outlets, compared to a sales rate of 0.62 from 77 outlets the previous year.

Galliford said Linden Homes achieved sales growth in line with expectations and enters the new financial year with sales exchanged and reserved of £366mln.

The land bank had 11,400 plots, compared to 10,650 the prior year. All plots have been secured for the new financial year and 81% of plots secured for 2020.

Overall, the business expects a strong performance and “further significant improvement” in the margin, the group said. 

Galliford takes hit from Carillion collapse

In construction, the order book fell to £3.3bn from £3.5bn with 86% in the public and regulated sectors. Galliford has secured 87% of construction revenue for the new financial year. In 2017 it secured 84% of revenue.

It expects to end the year with net debt of £30mln after having to spend more to build Aberdeen’s new ring road following the collapse of project partner Carillion in February. Last year the company had net cash of £137mln.

“Construction's underlying performance is good with current and new projects expected to deliver improved margins, operating on multiple secured frameworks and in our chosen sectors,” said chief executive Peter Truscott.

“The Aberdeen Western Peripheral Route joint venture continues to make progress on site, with sections of the road already opened to traffic, and substantial completion expected to be achieved this summer.”

READ: Galliford Try still suffering from the Carillion curse

Galliford continues to anticipate an extra exceptional charge in the second half of the project, lower than the £25mln charge taken the first half. Truscott said the final out-turn remains “dependent upon the result of several significant claims”.

Partnerships & Regeneration revenues and profits to rise 'significantly'

The Partnerships & Regeneration arm continues to make “excellent progress” against growth and margin targets, “significantly” increasing revenue and profit, the company added.

The contracting order book in Partnerships & Regeneration stood at £1.2bn, higher than the £1.05bn reported last year, and mixed tenure sales carried forward rose to £160mln from £77mln. The land bank had 3,300 plots, up from 2,700 the previous year.

Shares rose 4% to 866p in morning trading.

Liberum maintained a ‘buy’ rating and target price of 1,116p, saying the shares are “very cheap”.

Galliford Try reports strong half-year performance with positive future outlook

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