New chief executive Greg Fitzgerald plans to double construction turnover and housing output by 2010
Fitzgerald, who is to be promoted from managing director of the housebuilding division in July, said he wanted to double the number of houses built and double the turnover of the construction business in the next five years.
Fitzgerald, 40, said that he was optimistic but recognised that he and his management team had a big job on their hands.
“We now have 2000 or so employees and you have to remind yourself what a big job it is,” he said. “There are a lot of people relying
on me, such as Andy Sturgess, the head of the construction arm, and Frank Nelson, the group’s financial director.”
It is thought that Sturgess had also been in the running for the post of chief executive.
He added: “As chief executive I am not going to replace myself as managing director of the housing division immediately. It will happen, but I’m not putting a deadline on that.”
Fitzgerald said the plan was to increase the number of houses built from 781 in the past financial year to about 1500-1600 in the next five years. The housebuilding arm aims to reduce the average selling price of a house from £228,000. He said that doubling the number of houses built was equivalent to a 35% increase in turnover.
Obviously we’re always on the look-out for acquisitionsGreg Fitzgerald, chief executive
The aim for construction is to double annual turnover to £1bn in the same period, with a focus on increasing margins rather than volume.
Galliford Try drafted Sturgess in two years ago to spearhead growth in the construction business after a fall in profitability. “We believe we’re out of recovery mode now,” said Fitzgerald. “We want to double the size of turnover in the next five to six years, but without losing the discipline. We are looking for 2% margins at the end of 2006.”
Fitzgerald said that although growth in the construction and housing businesses would be driven organically, acquisitions were a possibility. He said: “Obviously, we’re always on the look-out and acquisition opportunities always land on my desk.”
Although Fitzgerald was keen to point out that he had experience in construction and housing, he said the biggest challenge he faced was to gain a better understanding of the construction market.
“I need to understand what’s been happening there in the past 10 years. I’ll be looking at PFI, LIFTs [Local Improvement Finance Trusts], what goes into winning those contracts and what the risks are. I want to be involved,” he said.
David Calverley is to become non-executive director on 1 July, before replacing Tony Palmer, who will retire as chairman at the company’s annual general meeting in October.
Fitzgerald takes over the helm at a time when Galliford Try is performing well financially. Last week the company revealed a 22% increase in pre-tax profit for the six months to 31 December. It made £11.7m on a £347m turnover, a fall of about 2% compared with the same period last year.
Greg Fitzgerald’s CV
1982 Joined Midas Construction as trainee
1992 One of the founders of Midas Homes, later becoming managing director
1997 Appointed chairman Midas Homes after its acquisition by Galliford Try
2003 Appointed to managing director of Galliford Try's housebuilding division and joined the board
2005 Appointed chief executive of Galliford Try, effective from 1 July