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Builders and building materials

Galliford Try Holdings PLC GFRD View profile

Galliford Try to report sixth straight year of growth as profit hits top of forecasts

Galliford Try Holdings PLC (LSE:GFRD, FRA:3WC), the UK construction group, said full year profit would come in at the top end of analysts' forecasts, which range from £51.4 million to £53.4 million.

The company, which builds schools, hospitals and water infrastructure under public sector frameworks, expects revenue for the year to 30 June to have risen around 3%.

That would mark a sixth consecutive year of growth in revenue, profit and cash.

Margins improved again year on year, moving the group towards its target of 4% by 2030.

Galliford Try ended the year with cash of £258.8 million, up from £237.6 million, and average month-end cash of £216.2 million, a rise of 21.0%.

The group has no bank debt, no pension liabilities and an undrawn revolving credit facility.

It also holds a portfolio of marketable Public Private Partnership assets, stakes in projects financed jointly by government and private investors, worth about £37.2 million.

The order book stood at £4.3 billion at the year-end, up from £4.1 billion, with about 90% of the new financial year's revenue already secured.

Galliford Try completed a £10 million buyback in the second half, cancelling 1,957,703 shares at an average price of about £5.11.

Operating profits funded £38.4 million of capital allocation during the year alongside roughly £20.3 million of dividends, covered 1.8 times.

In February, the group bought Nene Valley Fire and Acoustic, a passive fire prevention specialist, which it said was trading ahead of expectations.

Recent framework wins include the £15.4 billion Department for Education Construction Framework 25 and a £750 million affordable homes framework for Sovereign Network Group.

The group also secured a £60 million munitions handling facility at RAF Lakenheath and three schools worth £139 million.

Chief executive Bill Hocking pointed to the order book and pipeline as the basis for the company's confidence, and said the group would keep reinvesting in earnings-accretive growth.

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