黑洞社区

Galliford Try chief executive Greg Fitzgerald is to step down from his role after 33 years with the firm.

The announcement came as the contractor and housebuilder reported its results for the years to 30 June 2014, with group revenue rising 21% to 拢1.77bn and pre-tax profit up 28% to 拢95.2m.

The firm said that Fitzgerald had indicated to the board that he wanted to retire by the end of 2015, with the firm already putting in place measures to appoint his successor. Fitzgerald has been with the firm for 33 years.

Fitzgerald said the decision was a 鈥減ersonal one鈥� and he remained 鈥渇ully committed to delivering the company鈥檚 growth strategy鈥�. 

鈥淎s our full year results announced today demonstrate, the Group is in great shape, with a strong management team, and very well equipped for the future,鈥� he added.

The firm鈥檚 growth was largely driven by the firm鈥檚 housebuilding business, with Linden Homes posted a 20% jump in revenue to 拢760m and operating profit rising 37% to 拢115m, while the affordable homes business Galliford Try Partnerships more than doubled revenue to 拢243m, up from 拢97m the previous year, with operating profit rising from 拢1.4m to 拢5m.

However, while Galliford Try鈥檚 construction business posted a 1.2% in rise in revenue to 拢833m, operating profit fell 38% to 拢8m, with the firm saying its construction margin had tightened to 1%, 鈥渙wing to challenging conditions in the supply chain 鈥� leading to higher costs than we expected at the time we bid for some contracts鈥�.

The firm said the margin pressures were particularly acute in the building arm of its construction business, which posted a 13% rise in revenue to 拢458m, but saw operating profit halve from 拢6.5m to 拢3m.

Speaking to 黑洞社区, Ken Gillespie, chief executive of Galliford Try鈥檚 construction division, said, that he expected margins to rise to 2% by 2018 but that this would not happen 鈥渞apidly鈥�.

鈥淚 do expect it to improve from there [1%] and that鈥檚 a reflection of the improving market conditions that we are seeing at the moment,鈥� he said.

Operating profit in the firm鈥檚 infrastructure arm - also part of the construction business 鈥� also slipped, down from 拢6.4m to 拢5m, with revenue falling 10% to 拢375m.

The firm said that in the UK the construction market 鈥渞emained challenging鈥� but it was now 鈥渟eeing more opportunities across the country and an improving order book鈥�.

In July, after the current results period, Galliford Try bought Miller Construction for 拢16.6m.

Gillespie said he expected synergy savings of over the 拢7m that the firm had previously predicted.

He also said one-off costs associated with the acquisition would be less than the 拢4m Galliford Try had forecast and added that the firm had cut 70 鈥渂ack office鈥� jobs as part of the integration.