黑洞社区

Galliford Try has been forced to make a further 拢20m writedown on its disastrous Aberdeen road job.

The firm wrote off 拢25m on the project in the first half of its financial year, with the total additional charge to date now sitting at 拢123m.

Galliford Try said the writedown "reflected the additional share of costs taken on following the insolvency of Carillion, one of our two joint venture partners, and further cost rises in the second half of the financial year, driven mainly by poor weather conditions".

The firm said the additional 拢20m writedown was inline with the warning it gave in May.

Peter Truscott, the company鈥檚 chief executive, said the project was due to be finished in "late autumn" - 12 months later than it was originally expected.

The deal for Transport Scotland has been blighted by weather problems since work began more than three years ago 鈥� parts of the site were under water following devastating floods at the end of 2015 鈥� as well as complications with the ground conditions with large sections of it passing through undulating countryside.

The job, known as the Aberdeen Western Peripheral Route (AWPR), was bid under a lump sum fixed price prompting Galliford Try鈥檚 construction boss Bill Hocking, who joined the firm from Skanska nine months after the scheme started, to draw a line under these sorts of schemes. 鈥淲e will not do mega, lump sum fixed-price jobs anymore,鈥� he told 黑洞社区 earlier this year.

In April, Galliford Try said it had raised 拢144m in a rights issue to cover spiralling costs on the problem-plagued 拢745m AWPR project.

The contractor revealed the proceeds would be used to cover soaring costs in relation to the bypass, which it is building with remaining joint venture partner Balfour Beatty.

The writedown had a negative impact on Galliford Try's construction business which recorded an operating loss of 拢29.1m. But this was an improvement on last year where the construction arm haemorrhaged 拢88.2m.

Truscott said: "The underlying Construction business performed well and continues to see a pipeline of suitable opportunities, with new projects delivering improved margins.

"We have made good progress towards completion of the AWPR contract, with significant sections of the road open to traffic and the final section expected to be open by late autumn 2018."

The construction business was a dark spot on a bright set of results, which saw the company as whole record a 145% increase in pre-tax profit, with this figure growing from 拢58.7m in 2017 to 拢143.7m this year.

Group revenue, which now sits at 拢2.9bn, grew by 10% from 拢2.7bn last year.

Linden Homes, the firm鈥檚 housing arm, recorded a 1.1% increase in revenue and an 8.3% growth in profit.

Revenue increased from 拢937.4m to 拢947.3m and profit from operations increased from 拢170.3m to 拢184.4m.