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Galliford Try posts record full-year results driven by strong UK housing market

British construction and housebuilding group Galliford Try Plc posted on Tuesday record results for the year ended June 30th as strong market conditions helped boost performance at both of its main divisions.

The FTSE-250 company said that per-tax profit surged 20% to £114.0 million from £95.2 million a year earlier, making it the latest British housebuilder to report double-digit earnings growth. The jump was on the back of a 33% surge in revenue to £2.348 billion, with around £400 million coming from the acquisition of Miller Construction. Including the contribution from its joint ventures, revenue rose 31% to £2.431 billion.

Based on the upbeat results, the company raised its final dividend to 46 pence per share, which translates into a full-year dividend of 68 pence, up 28% year-on-year.

“I am delighted to announce another record year at Galliford Try with all of our businesses buoyed by encouraging market trends,” said Greg Fitzgerald, Executive Chairman. “In Housebuilding we have achieved progress on margins, and made strides towards further enhancement, implementing some operational restructuring and other business improvement initiatives. We are very pleased to have acquired the Shepherd Homes business, which will accelerate our growth in the North… Our Construction division has made excellent progress in closing out older contracts, and won significant new work in an improving market, strongly assisted by the timely acquisition and swift integration of Miller Construction.”

Across the group, revenue was generated broadly equally from its two main divisions. Housebuilding revenue rose 11% to £1.108 billion from £1.002 billion a year earlier. It completed 3 177 homes, up from 3 107 last year, with a further 1 800 equivalent contracting units in Galliford Try Partnerships, up from 1 500. Linden Homes saw its margin rise to 16.0% and its average selling price was up 7% to £327 000.

Meanwhile, the construction business, which largely focuses on public sector contracts such as water and road infrastructure projects, saw revenue surge 55% to £1.293 billion, but most of the gain came from the acquisition of Miller Construction. Galliford said its construction order book stood at £3.8 billion, up by about £800 million from a year earlier, with 90% of the divisions projected revenue for this year already secured.

The company also said that the UKs growing population, rising proportion of single-person households and shortage of new homes secured its homebuilding divisions growth prospects but it also warned that building costs are rising.

“All businesses saw high levels of build cost inflation but early signs indicate the situation may be moderating,” said Mr. Fitzgerald.

Galliford Try Plc traded 2.06% lower at GBX 1 763.92 per share at 09:32 GMT in London, marking a year-on-year jump of 45.66%. The housebuilder is valued at £1.48 billion. According to the Financial Times, the 5 analysts offering 12-month price targets for Galliford Try Plc have a median target of GBX 1 619, with a high estimate of GBX 1 800 and a low estimate of GBX 1 182. The median estimate represents a 10.11% decrease from the previous close of GBX 1 801.

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