11th Sep 2019 09:26
(Alliance News) - Galliford Try PLC on Wednesday said earnings in the most recently ended financial year were hurt by contract write-downs and restructuring.
The construction and house-building company reported revenue, which includes share of joint ventures, of GBP2.86 billion for the year to June 30, 8.6% lower compared to GBP3.13 billion a year earlier. Revenue, excluding joint ventures, was down 7.5% to GBP2.71 billion from GBP2.93 billion.
As a result, pretax profit declined 27% to GBP104.7 million from GBP143.7 million year-on-year. Exceptional costs rose to GBP50.8 million from GBP45.0 million due to charges against legacy contracts and restructuring within the Construction business.
Galliford Try said its Construction unit performed "well" during the year but there were challenges with some ongoing projects.
Elsewhere, Linden Homes delivered steady sales and strong margins in tougher conditions, the company noted, while Partnerships & Regeneration delivered "impressive" growth and increased profitability.
The FTSE 250-listed company reduced its annual payout to 58.0 pence a share from 77.0p paid the year before.
"The group has continued to perform well and our talented teams across the businesses have delivered a good performance despite the challenges faced," said Chief Executive Graham Prothero.
"The potential combination of our Linden Homes and Partnerships businesses with Bovis Homes represents a superb opportunity, enhancing the prospects for all three of our businesses to thrive as strategically focused and well-financed operations with excellent opportunities for growth. The transaction allows Construction to continue trading as a standalone well capitalised business," added Prothero.
On Tuesday, Galliford Try proposed sale of its housebuilding businesses, Linden Homes and Partnerships & Regeneration, to Bovis Homes Group PLC. The company believes that the sale will help it to become a "well-capitalised standalone construction-focused group". The potential deal would value the two housebuilding businesses at GBP1.08 billion.
Back in May, Galliford Try rejected a GBP1.05 billion bid by Bovis for Galliford's Linden Homes and Partnerships & Regeneration businesses.
Galliford Try shares were trading 0.4% lower on Wednesday in London at 661.19p each, while Bovis shares were up 1.0% at 1,032.63p each.
Related Shares:
Bovis HomesGalliford Try