FURTHER work at the home of Wimbledon and a flow of new contracts with water companies will help Galliford Try weather any cuts in public sector spending, the construction group yesterday said.
In a trading update, the company – which built the roof over centre court at the All England Lawn Tennis Club and is about to begin work on the new number three court – predicts that full-year results for the year to 30 June will be in line with th
e board's forecasts.
Net cash levels stood at about £35 million at the end of June, compared with net debt of £2m on 30 June, 2008.
The group's construction divisions – which includes Scottish firm Morrison Construction – are expected to produce "record results" for the year, with the public and regulated sectors, such as the water industry, accounting for 88 per cent of its order book, which has been maintained at £1.7 billion.
As well as work at Wimbledon, Galliford Try's building arm also has the £54m West Kent College project in its £720m order book.
In Scotland, Morrison Construction recently completed work on the A7 trunk road in the Borders and, alongside Balfour Beatty, is part of the consortium building the M74 extension. About a quarter of the group's turnover comes from Scotland. In the past week, Galliford Try's public-private partnership (PPP) investments division – which is run from Edinburgh by group financial director Frank Nelson – sold its equity investment in the Highland schools PPP for £16.8m.
Nelson told The Scotsman: "Our recent performance has been very good. We've had record profits, not just for Morrison but throughout the whole business. Construction is a 'late cycle' business and is being pumped prime by government just now.
"How long that will last is up for debate because clearly the government purse will tighten up following the next general election. Education, health and community buildings are our bread and butter."
Nelson said he expected Galliford Try would be able to make up any decline in public sector work through the renewal of long-term framework contracts in the water industry, where the group is the leading contractor.
The group also said that the second half of the financial year had been "far more encouraging than the first" for the housebuilding division, which operates in the Midlands, south and south-west of England.
Housing completions totalled 1,769 units, compared with last year's 2,524. The firm added: "Following the initial resurgence of activity during January, the momentum has been maintained albeit the overall housing market remains challenging."
