Galliford Try may be a bit of an odd shape for a listed company, but it’s going like a bomb, and those who know such things reckon it’s bound for greatness. Angela Monaghan met Greg Fitzgerald, the quiet man who’s driving with his foot on the floor
When Greg Fitzgerald was appointed chief executive of Galliford Try a year ago, many in the industry thought it sounded the death knell for the company’s construction business.
There were two reasons for this. First, only three public companies in Britain run a construction business alongside a housebuilder; Kier and McInerney Holdings are the other two. Second, Fitzgerald was seen as a dyed-in-the-wool housing man. He was a founder member of Midas Homes, had run Galliford Try’s housing business and a few months after taking on the top job he bought Chartdale Homes.
But the 41 year old insists he never had any intention of favouring one over the other. “Everybody thought that when I took over, it was bad news for construction, but I’ve only ever really worked for one company [he joined Galliford Try after it bought Midas in 1997] and I’ve been in a model where construction and housebuilding were together. That’s how I’ve always worked and I have no other intention.”
He put his money where his mouth was when he swallowed Morrison Construction for £42m six months ago. It seems that, from a financial point of view, this transaction was a breeze. “We could have raised more from the City,” he says gleefully. “We’ve never been in a cash positive position before.”
That does not mean that there weren’t some hairy moments during the talks: “There were some up and downs and frightening times during the course of it,” he says. “The due diligence process was more complex than Chartdale, and there were 1600 staff involved, compared with 90 at Chartdale.” Nevertheless it all turned out to his satisfaction, and the integration of Morrison is “80% complete”.
Fitzgerald describes himself as an introvert, but he overcame his shyness to explain his plans for the expanded business, which now employs 3600 people, and will this year have a turnover of more than £1bn for the first time.
One of the most marked changes that has taken place since Fitzgerald took over in July last year is the level of attention the company is attracting. Although it is listed on the stock exchange, it is not followed by many analysts, a hangover from the time when it was considered too small to bother with, and when others just couldn’t understand the direction the business was taking. But now, esteemed industry players, including Tony Pidgley, founder and managing director of housebuilder Berkeley Group, are describing Galliford Try as the next big thing.
Pidgley says: “It was a very small contractor once, but it is getting bigger, has a nice housing side and a well-controlled construction business. It also has a bright young managing director [in Fitzgerald].”
Fitzgerald reacts warily to this sudden attention: “We’ve come from a period of nobody talking about us to everyone talking about us,” he says. Well, that is hardly surprising. Two acquisitions with a combined value of £109m shows that the company has ambitions to grow.
He has already achieved some of these. When he took over a year ago, he said he wanted to double the size of the construction business, which he has accomplished through the acquisition of Morrison.
Since buying Morrison, Galliford Try has been awarded one of the Olympic Delivery Authority’s two contracts for demolition and remediation works. That is where Fitzgerald’s interest in the Olympics ends: “From a risk management point of view, we won’t be going anywhere near it,” he says. And in housing, he wanted to double the number of completions from 850. In the financial year to the end of June it finished 1050 units and Fitzgerald wants to take that to 2000 as soon as possible.
All eyes on Morrison
Now that he has proved that he has the bottle to swallow large acquisitions, opportunities are crossing his desk every day. One of the most obvious ones for Galliford Try would be the Morrison’s utilities and facilities management businesses, which is owned – for the moment – by AWG. These have a combined turnover of £600m, and look like a good fit for Galliford Try. So is Fitzgerald interested?
“It’s a good question,” he says, with a sly smile. “I’d be lying if I said there wasn’t any talk of it but it’s unlikely because both the businesses are in pretty hot sectors so it would be expensive.”
For all his shyness, Fitzgerald says he thrives on making tough decisions. Most recently he has pulled the plug on the company’s final salary pension scheme, with a £46m pension deficit still sitting on the books. Others have also seen this side of Fitzgerald’s character. “He’s aggressive and experienced, and not introverted when you get in a room with him,” says Mark Hughes, analyst at Numis Corporation.
Fitzgerald’s only regret is that the job isn’t “great for the lifestyle”. He would like to spend more time with his wife at his home in Devon, and more time following Manchester United. But for the moment he is focused on making his own mark on the company. “That will be where I take profits; that’s what it’s all about.” When he took over, pre-tax profit stood at £26.3m. Next month he will be judged by the results obtained in his first full financial year as chief executive.
Galliford Try: group structure
Building division – managing director Andy Sturgess
Education (including PFI)
Total anticipated turnover: £550m
Infrastructure – managing director Ken Gillespie (former managing director of Morrison Construction)
Total anticipated turnover: £400m
Housebuilding division – overseen by Greg Fitzgerald
Five regional businesses
Midas Homes and Gerald Wood Homes in south-west England
Try Homes in south-east England
Stamford Homes and Chartdale Homes in the Eastern counties
73% of units are developed on brownfield
Total anticipated turnover: more than £200m
PPP Investments – run by Frank Nelson, group finance director