Galliford Try Holdings PLC (LSE:GFRD) hiked its interim dividend 36% as revenues and profit margins increased in the first half, with management now expecting full-year profit to be at the upper end of current forecasts.
The construction group reported revenue of £679mln for the half-year to 31 December 2022, up 14% on a year earlier, with profit surging 65% to £11.7mln. On average, analysts estimate £20.3mln of profit before tax and exceptionals for the year to 30 June 2023.
Outsized profits gains were made in the first half as divisional operating margin increased to 2.3% from 2.2% as an effect of its sustainable growth strategy.
An interim dividend of 3p per share was declared, up from 2.2p a year ago.
In setting the dividend the board considered profitability, the continued strong balance sheet and £3.5bn order book – as both revealed in January’s trading update – and longer term prospects.
As such, the dividend per share is expected to increase in line with earnings, with a dividend cover of two times annual earnings.
Galliford Try, which focuses its work on construction for sectors including highways, water, education and health, was confident about the outlook, with 95% of projected full-year revenue secured and 79% of that for the following year.
Chief executive Bill Hocking said: “Our strong and high quality order book, in our chosen sectors, provides visibility and security of future workloads. Together with our excellent people and our strong balance sheet, this gives confidence in our ability to deliver our sustainable growth strategy and continue to provide long-term sustainable value for our stakeholders."
The group added that it is encouraged by recent project wins and the pipeline of new opportunities across its chosen sectors, saying the UK's planned investment in economic and social infrastructure supports growth in its core markets.