Galliford Try returns to profitability as the contract strategy pays off
Galliford Try has returned to profitability and has developed “a really solid foundation” for the next five-year plan, said the company’s CEO.
The contractor posted a pre-tax profit of £ 11.4 million for the year ended June 30, 2021, compared to a loss of £ 34.6 million the previous year. She blamed the coronavirus pandemic for the decline in 2020.
CEO Bill Hocking said Construction news that Galliford Try has been “in good shape” in recent years thanks to higher contract selectivity.
“Our five-year strategy so far has paid off and has given us a really solid foundation,” he said. “It has worked for us to be very selective about what we do and even more selective about what we don’t, and that means our earnings are more predictable.”
The company’s turnover was broadly unchanged at £ 1.12 billion. Year-end cash rose from £ 197.2m last year to £ 216.2m in the latest results while the company remained debt free.
The infrastructure department recorded a slight decline in sales of € 357.1 million.
He added, “It’s a timing problem as well, so when we’re out of [asset management plan periods] AMP6 to AMP7 in [the] water [industry], actually you always see this kind of transition from one cycle to the next. You see a drop in revenue and then the revenue comes back. “
The company today announced its new five-year targets, which include achieving an operating margin of 3 percent. In the latest results, the company’s margin was around 2 percent.
In addition, the group is targeting sales of £ 1.6 billion by the end of the five year period. Jubb said the markets are there to support annual growth and that 90 percent of the company’s pipeline is secured for the current year.
Galliford Try said it had an order book of £ 3.3 billion, 91 percent of which was in the public and regulated sectors.
“The income is really visible. It goes back to the quality of the bidding, which means no one out there chasing work just to fill the space because there is a really good work cycle there, ”Jubb said. In addition, the company has secured around 60 percent of the pipeline for 2022/23.
The infrastructure business scored high under the North East Procurement Organization’s (NEPO) £ 400 million civil framework and was named in six of 13 lots under the £ 2.1 billion Construction West Midlands framework.
Galliford Try named David Lowery to head its infrastructure business in January. He moved from his position as Executive Director of the Eiffage / Kier / Ferrovial / Bam JV working on HS2. Hocking said the company is keeping an eye on the high-speed project and will “look at some of the contracts on HS2’s northern routes when they come out”.
Uncertainty gripped the high-speed project when it was alleged that the government would cancel the eastern leg of Phase 2b. Earlier this week, 63 business leaders, including construction managers from firms such as Mace, VolkerWessels and Aecom, urged the Prime Minister to commit to the eastern portion of the program.