Galliford Try confidently hoists payout after record profits

Galliford Try proposed a bumper final dividend after it reported a record annual profit thanks to strong growth and a positive outlook at its housebuilding, affordable housing partnerships and construction arms.

On revenue up 10% to £2.67bn in the year to 30 June, profit before tax was increased 18% to £135.0m, with earnings per share up 17% to 132.5p.

The final dividend was hoisted 22% to 56p to lift the total 21% to 82p per share.

Chief executive Peter Truscott said the payout reflected the record results and the board's confidence in the business, having reorganised the management in all three businesses during the year to create "the right platform for future progress in both volume and margin".

In completing 3,078 sales and seeing average selling prices rise 2%, housebuilding arm Linden Homes increased revenues 8% to £841m and its margins significantly to 17.5% from 16% last year to record a £147.2m profit.

With housing demand strong and supply short, management decided due to the potential for further margin enhancement, to increase their focus on strategic land but in light of the current economic uncertainty said they were continuing to take "a more cautious approach to land acquisition".

The newly merged team forming what is now the Partnerships & Regeneration arm saw revenue drop 9% to £300.6m but profits increased 24% to £11.7m as margins were improved.

"Building on our experience and relationships with public sector commissioners, the prospects for our Partnerships business are considered to be excellent, with significant unmet demand for low-cost, intermediate and rented affordable homes," Truscott said, pointing to further geographic expansion and increasing mixed-tenure revenues as growth drivers for the top line and margins.

The construction division swelled revenues 16% to £1.5bn but margins were squeezed to 1.1% from 1.2% the year before, though Truscott said the market "remains positive, helped by the substantial infrastructure maintenance and improvement required in the UK".

He added: "Whilst there has undoubtedly been a cooling in demand for new private commercial buildings in the period leading up to and since the EU referendum, our focus on the public and regulated sectors, which represent 90% of our order book, give us a strong and reliable outlook."