Yahoo Finance Builder Galliford Try shifts focus after offloading housing division
Galliford Try has more than £3 billion in contracts lined up as it tries to construct a life after house-building in the new decade.
The FTSE 250 company said it will be able to shift its focus after selling its housing arm to Bovis Homes, which has since been renamed Vistry Group, late last year.
It said its order book now stands at £3.2 billion, including major projects in Sheffield, for Yorkshire Water and Southern Water, and improvements to the A47 and A303. It has also won a contract to revamp Marble Arch Place in London.
We’re delighted to announce our first Trading Update as a standalone construction company, entering the new year with a high-quality order book of £3.2bn and significant contract wins https://t.co/IUseDlFrUy pic.twitter.com/TwDhnu9LDv
— Galliford Try (@gallifordtry) January 9, 2020
David Madden, an analyst at CMC Markets, said: “Galliford Try confirmed that it has won a number of contracts so the new year has got off to a strong start.
“Only last week, the group finalised the sale of its house-building business for more than £1 billion. The motivation behind the move was to focus on its core business, and, judging by today’s update, that is going well.”
The move left Galliford with its building division, which represents about two-thirds of earnings and focuses on the education, defence and health sectors. Its infrastructure arm, which accounts for the final third, works on highways and environmental projects.
Chief executive Bill Hocking said: “The successful completion of the disposal of the housing and partnerships divisions means Galliford Try is now a well-capitalised and focused UK construction group.
“I am very excited about the future opportunities for Galliford Try. There is good momentum in the business.”
Investors also seemed excited by developments, as shares rose 7.1% to 154p.
“The latest update confirms that trading for the continuing business is in line,” said Peel Hunt analyst Andrew Nussey.
Galliford Try said the second half of the year is likely to be better than the first, which was hit by market uncertainty.
Separately, house-builder MJ Gleeson said it sold 811 units over the six months to December 31 – a more than 17% increase on the year before.
However, land sales which were expected towards the end of the period will have to wait until the second half of the financial year, the company said.
Shares fell 1.5%.
