Galliford 'on track' to build more houses

The company, which in February revealed it had returned to interim profitability, said housing cancellation rates were now down to 15 per cent, below the historical average.

Galliford chief executive Greg Fitzgerald said the group – which owns Edinburgh-based Morrison Construction – was "well on track" to deliver a housebuilding expansion plan announced with its 119.3 million rights issue in October.

The company said 443m of sales had been reserved, contracted or completed in the division, of which 308m was for the financial year to 30 June.

Galliford said it was now selling homes from 60 sites, up from 54 at 1 July, 2009, while the landbank was ahead of target at 9,700 plots, of which 50 per cent was secured at current low market values. This compared with 7,800 plots at 1 July, 2009.

Galliford said the housing market was stabilising, with "welcome signs that the number of mortgage products on the market continues to increase and become more flexible".

In February, the company struck an interim pre-tax profit of 6.4m, compared with an interim loss of 37.5m in the first half of 2008.

Galliford has laid off 20 per cent of its Scottish workforce over the past nine months, taking its headcount down to about 1,000.

The company, which is renovating London St Pancras railway station, was named last autumn as the main contractor for a 31.5m bypass on the A96 trunk road, the main route from Aberdeen to Inverness.

Fitzgerald said such recent awards had "underpinned the resilience" of the group's construction business in what remained challenging markets.

The company said at its interim results that it was braced for drastic cutbacks in UK government spending after the General Election, with big infrastructure projects such as roads being seen as under threat.

Galliford's construction order book stands at 1.7 billion.