In an otherwise upbeat trading statement for the start of 2018, chief executive Peter Truscott said that construction’s underlying performance continued to improve as the division worked through legacy contracts.
He said: “We have experienced some further cost pressure, principally from weather delays, which are likely to increase the exceptional charge in the current year.
“The amount will depend upon progress recovered through the summer, and is expected to be lower than the £25m charge taken in the first half.”
He added: “We are continuing to discuss several significant claims. Practical completion of the project is anticipated this summer.
Construction’s underlying performance continued to improve, as outstanding legacy contracts diminished.
“The business is seeing a good level of new project wins and opportunities on its multiple frameworks, whilst maintaining its disciplined approach to bidding.”
Its partner on the late-running Scottish road project Balfour Beatty also confirmed this morning the project was on track to meet the latest revised completion date this summer.
Chief executive Leo Quinn said there would be no change to the £105m – £120m Balfour Beatty cash outflow guidance for 2018 provided at the full year 2017 results.
He said Balfour continued to make good progress on the second phase of the Build to Last transformation programme and remains on track to achieve industry standard margins in the second half of 2018.
At the rest the Galliford Try business, Partnerships & Regeneration continued to benefit from strong demand and opportunity to grow both its mixed tenure and contracting offering. The business expects to report margin growth driven by market demand, contract wins and our successful geographical expansion.
Truscott added: “In Linden Homes sales rates remain encouraging at 0.71 units per site per week since 1 January, positioning the business well for the remainder of the financial year.
“We are also making good progress in line with our strategic objectives, and expect to report further margin improvement.”