British construction company Galliford Try plc (LON:GFRD) has lifted its interim dividend 23% to 32p per share, saying it is confident on the outlook for the full year.
The FTSE 250 group raised the dividend as it reported a 19% increase in first half pre-tax profit to £63.0mln, or 61.9p per share, compared to £52.9mln in the same period a year earlier, or 52.2p per share.
Revenue, including the share of joint ventures’ revenue of £72mln, climbed 3% to £1.30bn from £1.26bn with growth across all its divisions including the construction unit, housebuilding business Linden Homes and affordable homes company Partnerships and Regeneration.
The increase in revenue was largely driven by a continued rise in house prices in the UK as demand continued to outstrip supply.
Galliford said full year revenue is expected to be broadly in line with the previous year.
However, the group said it is “mindful of the uncertainty in the economic environment” as the government edges closer to triggering Article 50, which begins the formal process of Brexit.
Still, Galliford said Linden Homes and Partnerships and Regeneration stand to benefit from the government’s plans to support the construction of further homes. Low borrowing costs, decent mortgage availability and the Help-to-Buy government scheme will also continue to support the market.
“We continue to see robust demand and pricing in residential markets, for both Linden Homes and Partnerships and Regeneration, driving good rates of sale, and the land market remains benign in all regions,” chief executive Peter Truscott said.
In its strategy for targets it hopes to reach by fiscal year 2021, Galliford is aiming for 60% growth in pre-tax profit across the years leading up to then, a five-year compound annual growth rate on dividend of at least 5% in 2021 and a return on assets of at least 25%.
Shares edged up 0.66% to 1,526p in early trading.