Contractor Galliford Try has set itself a target of raising revenue from its construction business by 50% by 2018
In its last full-year, Galliford Try’s construction business posted revenue of £913m, meaning the firm would be aiming for revenue of around £1.4bn by 2018.
Speaking to Building, Ken Gillespie, chief executive of Galliford Try’s construction business, said the growth target for 2018 was “not particularly aggressive” because it represented a return to the firm’s pre-recession turnover.
He said commercial and leisure developments were among those that the firm was targeting to drive growth.
Gillespie said he wanted growth to be organic and “didn’t see” the firm using acquisitions to grow revenue “in the short term” because it was not the right point in the economic cycle to buy other firms.
He said: “I think coming out of recession is a tougher ask than going into recession. You have got a marketplace where you have an order book that you’ve won over the last five years at prices at the lowest they are in the [economic] cycle. The risk is whether you can deliver it at the price that you priced it at.”
In its half year accounts, published today, Galliford Try said: “Maintaining our focus on risk management we will continue to prioritise margin and strict cash management.
“In the short term we continue to expect operating margin to fall, but then to rise towards 2.0%.”
The announcement came as it reported to the City that group revenue had jumped 18% to £803.5m in the second half of 2013, up from £678.3m in the second half of 2012.
It also reported an 18% increase in pre-tax profit to £38.1m in the six months to 31 December 2013, up from £32.3m over the same period of 2012.
Over the same period Galliford Try’s construction arm reported a slight decline in revenue to £398.1m in the last six months of 2013, down from £400.7m in the last six months of 2012.
It also reported a dip in operating profit to £5.5m from £7.4m.
In its accounts it said the construction market “continued to be challenging” but that it was “seeing an increase in the pipeline of opportunities”.
Galliford Try’s housebuilding division, Linden Homes, reported a jump in revenue to £328.2m in the second half for 2013, up from £273.5m. It also reported an increase in operating profit to £44.2m up from £33.9m.
Its affordable housing arm, Galliford Try Partnerships, also reported strong growth with revenue of £100.9m in the second half of 2013, up from £43.1m in the second half of 2012.
Plus, its operating profit rose to £1.9m from £500,000.
In its strategy business strategy, Galliford Try said Linden Homes would target increased operating margin of around 18% and a 50% increase in revenue by 2018.
While Galliford Try Partnerships would aim to increase turnover to over £60m and achieve an operating margin of between 3.5% and 4% by 2018.