Galliford Try plans to shrink its construction arm after the contractor warned today it will report a £30m-£40m hit on profit in its upcoming full-year results.
The contractor has announced it will report a profit before tax result which could be as much as 26% below current predictions from analysts, who have forecast the contractor will make a £156m profit before tax.
In a statement to the City, Galliford Try said it would reduce the size of its construction business and focus 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 of the construction and regeneration business will include a reassessment of two legacy contracts: its Queensferry Crossing joint venture (of which estimated final costs on the project have recently increased), and its Aberdeen Western Peripheral Route project.
Galliford Try is delivering the AWPR in a joint venture with Balfour Beatty, but the project took a blow after Carillion, which was also a partner on the scheme, collapsed last year.
The company will announce the results of its review of the construction business and an update on group trading next month.
The news comes just weeks after Galliford Try signed an agreement with Homes England to build more than 850 homes across the UK.
The national partnership with Galliford Try Partnerships will deliver housing across key sites in Redcar, Cheshire, Staffordshire and Dorset as part of Homes England’s initiative to build new housing at pace.
Last month, chief executive Peter Truscott left the company with immediate effect to take the reins at housebuilder Crest Nicholson.
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