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Galliford Try rallies on 'strong' order book

By Michele Maatouk

Date: Wednesday 15 Jul 2020

Galliford Try rallies on 'strong' order book

(Sharecast News) - Shares of Galliford Try surged on Wednesday as the construction group hailed a "strong" order book in an update on trading in the year to the end of June.
Galliford said the order book was up 10% from 2019 to £3.2bn, with 90% of revenue for the new financial year secured compared to 88% at the same time last year, and an "encouraging" pipeline in chosen sectors.

The company said all of its UK construction sites are now operational, with underlying operations performing well.

In addition, the group is well-capitalised, it said, with cash at 30 June of £195m versus net debt of £57m in 2019.

"As expected, the combination of site closures and reduced productivity significantly reduced revenue in the final quarter of the financial year," it said. "Along with the cost of implementing our new operating procedures and lengthened site programmes, this has led to a material reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of circa 5%.

"Productivity levels on our sites have gradually increased since the beginning of the lockdown, and we start the new financial year with productivity close to normal and operating margins expecting to improve in line with our target."

Galliford said it was still too early to restore financial guidance.

Broker Peel Hunt said that although guidance remains withdrawn, it was retaining its pre-Covid FY21 estimate for pre-tax profit of £9.6m, compared to consensus expectations of £8.6m, given the recovery achieved, the order book visibility and balance sheet strength.

At 0945 BST, the shares were up 10.7% at 111.86p.

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