Writedowns of £48m on housebuilding side wipe out firm's record profit in non-housing construction
Contractor and housebuilder Galliford Try has posted a loss of £37.5m after “exceptional costs” of £48.7m in the six months to 31 December 2008
The firm said it had seen the “worst housing market in generations”, forcing it to make £47.7m worth of housing asset writedowns and incur costs of £1m on redundancies.
Galliford Try completed 964 housing units, of which 672 were for market sale at an average sales price of £201,000. This compared with 890 units sold at an average price of £231,000 in 2007.
Net debt was reduced from £45.7m at 31 December 2007 to £1.8m in 2008.
The firm said it had reaped record profits from construction, 90% of which was in the public and regulated sectors. Construction had offered “excellent cash generation”, according to the firm.
Chief executive Greg Fitzgerald said that working in both the construction and housebuilding sectors was “continuing to mitigate the worst effects of the economic downturn”.
He added: “As the recession starts to impact opportunities in the construction market, we will benefit from our strong presence in the public and regulated sectors.
“Our strategy in housebuilding to reduce our exposure to the market during the current downturn by focusing on cash generation was adopted early. We have reduced our costs to a level that will enable us to work through the current market, while conserving the resources required to take advantage of opportunities arising when the market improves.”