GALLIFORD Try, the FTSE 250 builder that owns Edinburgh-based Morrison Construction, yesterday praised the Scottish Government’s infrastructure spending for stimulating the market north of the Border.
Ken Gillespie, chief executive of the group’s construction division, hailed the success of the “hub” projects run by the Scottish Futures Trust, under which public sector bodies bundle contracts together to save money.
Gillespie contrasted the situation north of the Border with public sector cutbacks from the Westminster government.
Morrison Construction is part of the consortia chosen to build health centres, libraries, police stations and other public builders in the south-east and south-west Scotland “hubs”.
The firm is also part of the consortium building the Queensferry Crossing and has launched a joint venture with Balfour Beatty and Carillion to bid for the £550 million Aberdeen western peripheral route.
Gillespie, who was promoted to Galliford Try’s main board in February, said: “The hub model of public-private partnerships is exactly the type of model that local authorities in England and Wales should be looking at.”
His comments came as Galliford Try unveiled a 17 per cent rise in pre-tax profits for the year to 30 June to a record £74.1m thanks to higher margins at its house-building division.
The increase in profits came despite a 2 per cent dip in group revenues to £1.47 billion and allowed the company to raise its total dividend by 23 per cent to 37p, another record.
Gillespie, who was managing director at Morrison Construction before it was taken over by Galliford Try in 2006, added: “These are record results for us and the success of the Morrison Construction business in Scotland has played a large part in that.”
Morrison Construction has been growing its headcount in Scotland for the past three years, Gillespie said, with an extra 200 staff joining over the past 12 months to take its total north of the Border to about 1,150.
Infrastructure contracts in the past year have included a £28m project in Forres to upgrade river defences as part of the wider £177m Moray flood alleviation scheme.
Gillespie said that Morrison Construction was now finishing the concrete foundations for the Queensferry Crossing and that “good progress” had been made on the approach roads during the summer.
He added: “We’ll now see work starting above the water on the bridge-building sections, which people think are sexier.”
Howard Seymour, an analyst at Numis Securities, said: “Galliford is performing to plan with rising housing margins reflecting astute land acquisitions at the bottom of the cycle, plus resilient performance in construction in challenging markets.
“We expect this to continue and retain the view Galliford is well placed in this regard.”
Jeffries analyst Anthony Codling added: “Galliford is well placed to benefit from a UK housing and construction market recovery, and we have seen the eggs of recovery laid, however, we do not want to count too many chickens just yet.”