Yahoo Finance Galliford Try plans to double affordable housing activity as half-year profits surge by nearly 20pc
Galliford Try has outlined plans to double the number of affordable homes it builds by 2021, as it targets a 60pc rise in profits over the same period.
The house builder plans to build 4,200 homes a year through its Partnerships division, which builds homes for housing associations and local authorities, sending revenue to £650m. The arm built 2,126 homes last year, bringing in revenue of £301m.
Meanwhile, its Linden Homes business, which builds homes for sale on the open market, will complete between 4,750 and 5,000 homes a year by 2021, rather than the 3,078 it built last year, increasing revenue from £800m a year to between £1.25bn and £1.35bn.
Chief executive Peter Truscott said Galliford Try's construction arm, which works on Government projects including roads and schools, would aim to bring its operating profit margin above 2pc in the next four years, from 1.1pc at the moment.
"We don't rely on significant economic growth in order to deliver this," he said. "We are focused on doing what we're already doing, but doing it better."
On Tuesday, the company raised its dividend by more than 20pc after enjoying a sharp rise in pre-tax profits in the second half of 2016.
In its results for the six months to the end of December last year, Galliford said pre-tax profits jumped 19pc to £63m, compared to £52.9m in the same period of 2015.
It has subsequently hiked its dividend by 23pc, from 26p to 32p, as it envisages continued opportunity in “all of our markets”.
Galliford is a more diverse business than many of its peers and has therefore not been as exposed to the changes in the residential property market as others.
The company said its order books at Linden Homes and its Partnerships arm were at “record levels”, although construction is lower than at this time last year.
“We continue to see robust demand and pricing in residential markets, for both Linden Homes and Partnerships and Regeneration, driving good rates of sale, and the land market remains benign in all regions,” said Mr Truscott.
Galliford’s fortunes contrast sharply with those at fellow housebuilder Bovis Homes. The struggling Bovis revealed on Monday that 2016 profits were down 3pc, while it has suffered weeks of turmoil that included the departure of chief executive David Ritchie.
