Acquisition costs dampen Galliford Try profits but operating margin improves

Latest financial results from Galliford try show a substantial drop in bottom-line profit but an even greater improvement in its trading position.

Chief executive Bill Hocking For the year to 30th June 2022 Galliford Try made a pre-tax profit of £5.4m, down from £11.4m the previous year, on turnover up 10% to £1,237m (2021: £1,125m). This result includes an exceptional £7.7m cost relating to the acquisition of NMCN's water business (even though the actual purchase price was only £1m) and £6m spent on a new cloud-based IT system.

Underlying profits, therefore, were up 68%, at £19.1m. The operating profit margin improved in the building division from 2.0% to 2.4% and in the infrastructure division from 1.8% to 2.4%. Building (which includes the FM business) generated revenue of £789.1m (2021: £789.2m), generating an operating profit before amortisation of £18.9m (2021: £15.9m). Building's order book stands at £2,047m, compared to £1,920m last year.

Infrastructure's revenue was £441.9m (2021: £329.2m), thanks to more activity from the AMP7 programme in the water sector and the acquisition of NMCN’s water operations, which contributed £74.1m revenue in the year. Infrastructure generated an operating profit before amortisation of £10.8m (2021: £6.0m) and its order book stands at £1,396m, compared to £1,348m last year.

Chief executive Bill Hocking said: “The group is well capitalised and has a strong and selective order book, focused in our chosen and proven sectors. This has enabled us to significantly increase shareholder dividends and capital returns. With strong and disciplined risk management we continue to manage the current market conditions, including the inflationary pressures, and are well placed for further progress in FY23.”