Galliford Try set for record profit

Building group Galliford Try has told investors it is confident of overcoming skills shortages and higher labour costs to deliver another set of record results.

Picture: PA

The firm – which last year bought the construction arm of Edinburgh-based Miller – said that its housebuilding division had benefited from a post-­general election upturn, with average selling prices rising 7 per cent to £327,000.

Its construction unit is sitting on an order book of £3.5 billion, compared with £1.4bn a year ago, said executive chairman Greg Fitzgerald.

He added: “It has been another record year for Galliford Try, and we are pleased to see that the momentum across the group continues.

“Labour availability and costs remain challenging but we continue to manage this effectively working closely with our supply chain.”

Industry experts have warned that rapidly rising costs and skills shortages could hold back growth in the construction sector, and the Scottish Building Federation recently highlighted that there are 58,500 fewer people employed in the construction sector north of the Border compared with 2008.

Galliford’s pre-tax profits are expected to come in “towards the upper end of analysts’ range”, the firm said in a trading update yesterday. Analysts at Numis have pencilled in a pre-tax profit of £113.8 million for the year to June, up from £95.2m last time.

In yesterday’s trading update, Fitzgerald said Miller – bought for almost £17m last July – has increased “opportunities and capacity” at the group, which also owns fellow Edinburgh construction operation Morrison.

He said: “Following a resilient performance in construction throughout a tough recession, we are pleased to report another profitable year for the division, and are encouraged by the outlook, with opportunities growing across multiple sectors.”

Morrison, along with Balfour Beatty and Carillion, is involved in the £550m Aberdeen bypass project, which is set for completion in winter 2017. It is also working on the Queensferry Crossing over the Firth of Forth and the redevelopment of the Royal Edinburgh Hospital, and in May the division was named as preferred bidder by Moray Council for the £17m refurbishment of four primary schools in Buckie, Elgin, Forres and Lossiemouth.

Galliford recently announced that housebuilding industry veteran Peter Truscott will become its new chief executive in October, while Fitzgerald will step back to become non-executive chairman at the start of next year. The group also promoted construction boss Ken Gillespie to chief operating officer.

Full-year results are scheduled for 16 September.