Galliford Try plans move away from hefty infrastructure projects as profits fall

 
Rebecca Smith
Galliford Try boss Peter Truscott said he remained confident in the firm's prospects
Galliford Try boss Peter Truscott said he remained confident in the firm's prospects (Source: Getty)

Construction firm and developer Galliford Try has announced it will no longer bid for large fixed-price infrastructure contracts, after unveiling full-year profits were down 57 per cent.

Profits for the year ended 30 June 2017 were down 57 per cent on the previous year to £58.7m, though group revenue rose seven per cent to £2.7bn.

Read more: Galliford Try's shares fall nearly 10 per cent as one-off costs hit £98m

The FTSE 250 firm said the profit impact of the £98m charge relating to legacy contracts that it announced back in May, and sent shares slumping at the time, remained unchanged.

The firm still proposed a 17 per cent increase in full-year dividend payment to 96p per share, and announced net cash of £7.2m for the year, compared to net debt of £8.7m in 2016.

Shares edged down one per cent on news of the results.

Galliford Try’s chief executive Peter Truscott said the firm had put in place “rigorous processes to ensure a more disciplined approach towards project selection”, and would now focus on lower-risk public and regulated sectors and two-stage negotiated work, “rather than large infrastructure projects on fixed-price, all-risk contracts”.

He added:

While the one-off costs relating to legacy contracts in construction have impacted the reported financial performance, we remain confident in the prospects for the business, with the underlying portfolio of newer contracts performing well, and simplified and strengthened processes proving effective.

Reflecting our strong underlying performance we are proposing an increase in our full year dividend of 17 per cent to 96 pence per share.

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