Martin Flanagan: Galliford withstands Brexit buffeting

Galliford Try is well placed to weather the Brexit uncertainty. Picture: Cate Gillon/Getty Images
Galliford Try is well placed to weather the Brexit uncertainty. Picture: Cate Gillon/Getty Images
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Galliford Try, the construction to housebuilding and facilities management business, best known in Scotland for its Morrison Construction arm, is the latest British company to admit the Brexit vote has created uncertainty.

But it is also not the first British group to equally remain calm amid that uncertainty. Chief executive Peter Truscott says that the balance of the group’s business, with one sub-sector offsetting another, means the company is well placed to weather that uncertainty.

And the impressive resilience of the group’s latest annual results show that he is clearly not just whistling in the dark. Profits are up 18 per cent and revenues 10 per cent, while net debts have halved, order books look healthy and the total dividend is up 21 per cent.

READ MORE: Galliford Try hikes divi on record annual figures

What’s not to like? Galliford reckons there remains plenty to go for in Scotland, one of its core areas, in education and health particularly. Contracts include the East Lothian Community Hospital.

Perhaps the one negative is pared meat-and-two-veg construction margins, pretty much treading water at 1.1 per cent from 1.2 per cent a year ago.

But that is to be expected when the construction sector fell into technical recession – two quarters of negative performance – earlier this year.

Galliford has not given up hope on aligning margins more closely with its 2 to 2.5 per cent medium-term target over the next 18 months, but that might be optimistic given the period will overlap with the great uncertainty engendered in British industry by the negotiation of our exit from the European Union.

But excessive margin focus is cavilling, particularly in this more uncertain economic climate, when so much of the rest of the business looks as robust as interlocked girders.

Pulling its weight

Even come fire and sword, two things in modern society will remain standing: gyms and coffee shops. They have ridden the good times in the past couple of decades and more, and seen off financial crashes and recessions.

That is why I believe the fast-growing Pure Gym, the biggest in a thriving sector, has every chance of a good flotation as the next stage in its striking growth. It is a company more than pulling its weight.

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