Good news for housing market: Galliford Try expecting record results again
The figures
Construction group Galliford Try is expecting record results once again, according to a trading update released today.
The housebuilder expects pre-tax profits for the full year to the end of June to be in the “upper range” of analysts’ range, while net debt will fall to less than £20m.
Completions in its housebuilding arm will rise to 3,177 units, up from 3,107 units last year, although year-end sales carried forward are likely to fall to £343m, down from £348m last year.
In its construction arm, the company said its order book had risen to £3.5bn, from £1.4bn this time last year. Meanwhile its cash position will hit more than £170m, up from £151m last year.
Why it's interesting
Housebuilders act as a barometer for the housing market – and after the result of the General Election, Galliford Try is feeling good.
The Conservatives' win effectively eliminated the threat of the mansion tax, causing the property market to breathe a sigh of relief – although all eyes will now be on the chancellor's announcements during today's Budget. Last time, he announced a "Help to Buy Isa", which pushed up share prices of housebuilders and construction firms. This time, he isn't expected to be as generous – although the odd bone might be thrown to the sector.
What Galliford Try said
Greg Fitzgerald, the company's executive chairman:
It has been another record year for Galliford Try, and we are pleased to see that the momentum across the Group continues, supported by encouraging market trends for all three businesses.
We are also delighted with the two important acquisitions of Miller Construction and Shepherd Homes, further increasing the Group's opportunities and capacity. Labour availability and cost remain challenging but we continue to manage this effectively working closely with our supply chain.“
In Short
Galliford Try is feeling confident with another record year in sight, a clear sign that the UK housing market continues its inexorable rise.