Galliford unveils move into Central Belt

Published on Thursday 10 September 2009 21:42

CONSTRUCTION group Galliford Try is set to enter the housebuilding market in the Central Belt after yesterday unveiling a £125 million cash call.

Galliford – which already operates its Morrison Construction and public-private partnership (PPP) businesses from Edinburgh – plans to build houses under the Morrisons brand.

The group said it will build on its own but also in partnership with existing players and aims to be constructing between 500 and 800 units a year within five years.

News of the housebuilding push into the Central Belt came as Galliford yesterday unveiled a pre-tax loss of 26.9 million, following 50.4m of writedowns on housing assets and 1m of redundancy costs.

Group operating profit fell by 63 per cent to 31.2m, but the construction division – which carries out a lot of public-sector contracts – grew operating profit by 5 per cent to 26.9m.

Group turnover fell by 20 per cent to 1.5 billion and the group halved its dividend to 1.5p.

But the group said it was "encouraged by the continuation of the improvement in the housing market over the summer" and was mounting a 125m rights issue to "recommence" its growth in the housing market.

Galliford already builds homes in the south of England and a very small number in the Highlands.

Frank Nelson, Galliford's finance director, told The Scotsman: "The intention, on the back of the Morrison name, is to develop our housebuilding expertise in the Central Belt.

"We've got a very good construction and PPP business and we want to piggyback on that to be much stronger in Scotland.

"Morrison was a housebuilder, but when it was bought by AWG they didn't continue that housing and so we now want to regenerate it."

Galliford bought Morrison Construction from AWG in 2006. Morrison Construction's current contracts include consortium work on the M74 on the southside of Glasgow.