Aberdeen bypass to cost Galliford Try an extra £20m
FTSE 250 construction group Galliford Try warned on Wednesday that costs to complete the Aberdeen bypass - a joint venture with Balfour Beatty - will increase by around £20m due to further delays and higher-than-expected direct costs.
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The company, which already cautioned back in May that delays due to freezing weather had added tens of millions to costs for the project, said the completion date for the final section of the Aberdeen Western Peripheral Route is now expected to be December due to "increased complexity" and weather delays in implementing repairs to the bridge.
"The final impact on Galliford Try's financial results will be determined more importantly by the result of the group's significant claim, in respect of which the board continues to pursue constructive discussions with the client," it said.
Galliford said the underlying construction business continues to trade in line with expectations, while the Linden Homes housebuilding unit is making good progress against its strategic targets.
Sales rates are lower than levels achieved in FY 2018, but prices and margins remain in line with expectations and the business expects to achieve its targets for the full year.
Meanwhile, the Partnerships & Regeneration business, which works with local authorities and housing associations, is trading strongly in mixed-tenure and contracting, with continuing strong demand across all regions.
The company said it expects to report a FY 2019 pre-exceptional pre-tax profit in line with previous guidance, while average net debt should remain in the previously guided range of £170m to £190m before any recoveries in relation to the AWPR contract.
At 1340 GMT, the shares were down 1.7% to 878.80p.