Galliford Try stays on track, though exceptional costs rise

Galliford Try said full year results are on track to hit their mark, with underlying debt lower than expected but bad weather adding costs to its troublesome Aberdeen bypass project.

In a trading statement ahead of the FTSE 250 group's 30 June year end, the Linden Homes housebuilding arm was revealed to have improved sales rates to 0.71 units per site per week since 1 January from 0.53 in the first half.

"We are also making good progress in line with our strategic objectives, and expect to report further margin improvement," chief executive Peter Truscott said.

The Partnerships & Regeneration division, which works with local authorities and housing associations, reported strong demand and opportunities to grow both its mixed tenure and contracting offering.

Truscott said margins in Partnerships are expected to grow over last year, driven by market demand, contract wins and geographical expansion.

On the construction business, he said the business is seeing a "good level" of new project wins and opportunities on its multiple regional frameworks, while a disciplined approach was still be maintaining on bidding.

The underlying performance "continues to improve", while continuing to work through diminishing outstanding legacy contracts.

One legacy contract of a sort is the Aberdeen Western Peripheral Route, where further exceptional charges will be taken in the second half, though less than the £25m seen in the first, due to weather delays, ahead of completion this summer. "We are continuing to discuss several significant claims," Truscott said.

With a focus on cash management, average net debt has been below the guided figure of £275m, excluding the extra cash from the recently completed £158m rights issue.

"The group's operating outlook is unchanged and all three businesses remain on track to deliver further profitable growth over the full year," Truscott said.

He said full year result were anticipated to be in line with the current range of analysts' expectations, which are for profits before tax and exceptional items in a range of £138-146m.