Galliford Try reports fresh wobble in house sales

Aaron Morby 12 years ago

Galllford Try has seen housing sales drop by a quarter in recent weeks as buyer confidence falters.

The firm said that average weekly sales were down from around 27 a week in the first half to around 21 units a week.

Cancellation rates have also increased from historically low levels to around the long term average at 16%, as fears about jobs and the impact of the Autumn spending review dent confidence.

Despite the recent dip in confidence, Galliford Try said it remained confident about prospects as it posted strong results for the year to June 30.

Galliford Try said the construction division had maintained its performance despite a tightening market and housing recovered strongly.

Group turnover fell 16% to £1.2bn, due mainly to lower work levels at the construction division as Galliford maintained the quality of its order book, successfully holding operating margins at 2.4%.

Cash balances exceeded management’s expectations at £207m. While £81m was ploughed into expansion the housing land bank.

    Division performance

    Construction Profit £22.8m (£27.9m); turnover £936m (£1,176m); margin 2.4%
    House building Profit  £17.6m (£11.6m); turnover £316m (£306m); margin 5.6%
    Building Profit £10.8m (£11.9m); turnover £445m (£529m); margin 2.4%
    Partnerships Profit £1.3m (£2.9m); turnover £94m (£130m); margin 1.4%
    Infrastructure Profit £10.7m (£13.9m); turnover £397m (£517m); margin 2.7%
    PPP Profit £2.1m (£10.2m); turnover £3.5m (£27m);

Greg Fitzgerald, chief executive, said: “We are on track to deliver the house building expansion plan we set out at the time of the rights issue in September 2009.

“We have been encouraged by the level of sales and prices achieved since the start of our new financial year when set against the backdrop of the effect on consumer confidence of the current economic uncertainty.

“Our presence across the more resilient markets in the South, and the opportunities we continue to generate from our leading position in affordable housing and on regeneration schemes underpin our progress.”

He added: “We have maintained a quality construction order book in increasingly challenging market conditions and anticipated reductions in public sector work”

The contracting order book rose 6% to £1.8 billion helped by Galliford renewing all its five year water frameworks to 2015.

Half of this is public sector generated, with 40% from the regulated sectors and just 9% from private sector orders.

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