Last checked at 16 Apr 2019 07:00
GALLIFORD TRY PLC
OPERATIONAL UPDATE
Galliford Try plc, the housebuilding, regeneration and construction group, announces that it is undertaking a strategic review of its Construction business.
The review will reduce the size of the Construction business, focusing on its key strengths in markets and sectors with sustainable prospects for profitability and growth, where we have a track record of success.
The review includes an assessment of operational progress and contract positions throughout the Construction business. The Board anticipates that this review will result in reduced profitability in the current year reflecting a reassessment of positions in legacy and some current contracts and the effect of some recent adverse settlements, as well as the costs of the restructure. The single largest element relates to the Queensferry Crossing joint venture, which has recently increased its estimated final costs on the project. With regard to the claim in respect of the completed Aberdeen Western Peripheral Route, and the previously disclosed £38m work in progress balance in respect of three contracts for a single client, our position is unchanged.
The Board expects that the outcome of this assessment will reduce the Group's full year post-exceptional profit before tax by £30m-£40m below the current consensus analysts' forecast1. The majority of our construction businesses continue to perform well, and these adjustments are not expected to have a significant impact on the Group's previous guidance on average net debt for the year.
The Board anticipates finalising its conclusions in the next few weeks and will share the detail of the review of the Construction business along with a further update on Group trading in its scheduled statement on 21 May 2019.
This announcement contains inside information for the purposes of article 7 of EU Regulation 596/2014. The person responsible for making this announcement on behalf of Galliford Try is Kevin Corbett, General Counsel and Company Secretary.
For further enquiries:
Galliford Try | Graham Prothero, Chief Executive Andrew Duxbury, Finance Director Kevin Corbett, General Counsel & Company Secretary
| 01895 855001 |
Tulchan Communications | James Macey White, Martin Pengelley, Elizabeth Snow | 020 7353 4200 |
Notes to editors:
1. The mean of publicly available analysts' forecasts for profit before tax after taking into account exceptional items for the year ending 30 June 2019 is £156m based on company compiled consensus as at 15 April 2019.
2. Galliford Try plc is a leading UK housebuilding, regeneration and construction group. It is listed on the London Stock Exchange and a member of the FTSE 250. Housebuilding - through our Linden Homes business - develops private and affordable homes in prime locations. Galliford Try Partnerships - our regeneration business - delivers mixed-tenure solutions working with housing association, local authority and private sector partners. Operating as Galliford Try and Morrison Construction, our Construction business carries out building and infrastructure with clients in the public, private and regulated sectors. At the end of the last financial year to 30 June 2018, the Group generated revenue of £3.1bn.