Galliford Try Holdings PLC (LSE:GFRD) shares rose 5% after the construction group posted strong annual results and struck an optimistic tone for the year ahead.
The company reported its fifth consecutive year of growth, with revenue up 6.3% to £1.88 billion in the year to June 2025.
Adjusted profit before tax climbed 28.6% to £45 million, while statutory profit reached £44.1 million. Margins improved to 3.0%, hitting Galliford Try’s 2026 target a year ahead of schedule.
Chief executive Bill Hocking hailed the performance, citing growth across highways and water projects. The company has proposed a 22.6% increase in the dividend to 19.0p per share, supported by earnings per share of 34.4p.
A further £10 million share buyback has been launched after completing a similar-sized programme earlier this year.
The balance sheet remains debt-free with £237.6 million of year-end cash. Crucially, Galliford Try enters the new financial year with 92% of 2026 revenue already secured, along with 75% of 2027.
The £4.1 billion order book spans regulated sectors including defence, housing, education and infrastructure.
While management expects revenue growth to flatten temporarily during the transition from the AMP7 to AMP8 water sector spending cycle, Hocking said trading momentum remains ahead of expectations, with a 4.0% margin target set for 2030.
Peel Hunt, which is a 'buyer' of the shares up to 525p, said: "We believe the shares are materially undervalued...given the compounding growth and asset backing. It is a top pick, in our view."
Panmure Liberum raised its price target 40p to 580p, pointing out that Galliford had hit its margin target a year early.