Firm says profits will be less than half of the £135m posted last year
Galliford Try is counting the cost of problem jobs at its construction arm after confirming that pre-tax profits at the group will nosedive to less than half of the £135m posted last year.
In May, the firm said it had been hit by £98m of costs on problem jobs with the firm blaming two undisclosed legacy infrastructure joint venture projects for its woes.
At the time, Galliford Try chief executive Peter Truscott (pictured) said the firm was “no longer undertaking large infrastructure jobs on fixed price contracts”.
Now in a trading update ahead of its annual results, due out on 13 September, the firm said profits would be at the upper end of analysts’ expectations – which range from £46m to £59m.
The firm said there was no change expected in the £98m hit at its construction division, while the operation’s £3.5bn order book of work in the predominantly public and regulated sectors was of “high quality”.
It said its Linden Homes business put in a strong revenue and margin performance while the group said its Partnerships and Regeneration operation was improving, with both revenues and margins up during the year.
Truscott added the group was cautious about “the impact of the current political uncertainty following the general election and the medium-term outlook for the macro economy”.
The firm made no reference to its aborted £1.2bn bid for Bovis Homes which was rejected at the start of April, with Bovis instead opting for independence under its suitor’s former chairman and chief executive Greg Fitzgerald.