The results season kicked off in earnest this week with six major players reporting, on the whole, an optimistic picture of the construction industry
Barratt Developments announced a 57% reduction in its debt to £605.3m since 30 June 2009. This was partly due to cash management on the housebuilder’s part, but most of the proceeds have come from a rights issue and the sale of a commercial property.
However, the group did report another post-exceptional loss of £178m, down from £594m in the same period in 2008, the bulk of which related to its costly refinancing and rights issue – which came in at £130m.
Hybrid housebuilder and construction firm Galliford Try posted a pre-tax profit of £6.4m, a turnaround compared to a £37.5m loss in the same period of 2008. The group’s success owes much to it taking advantage of low land prices and increasing its landbank, financed by a £119m rights issue.
Housebuilder MJ Gleeson also posted a small profit of £300,000, compared to a loss of £23.7m in 2008. Chairman Dermot Gleeson now plans to buy new, low-cost sites in the north of England, where land values remain reduced.
Construction giant Kier saw turnover remain steady at around £1bn, but pre-tax profit fell by 47% to £16.7m.
Chief executive John Dodds, who is overseeing his last set of results, said the figures were boosted by Kier’s presence on more than 50 framework agreements. The firm has set aside £18m to cover the Office of Fair Trading’s £17.9m fine for cover pricing, but is preparing to appeal against the ruling and hopes the costs will be lowered at a Competition Appeals Tribunal this summer.
Posting yearly results, builders merchant Travis Perkins said the business remained robust, with pre-tax profits at £180m.
Chief executive Geoff Cooper described the trading conditions as the “most difficult” in the group’s history and that the group would focus on “organic growth in this low growth environment”.
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