Contractor boss Bill Hocking says firm will bid for jobs with social landlords now non-compete clause with Vistry has expired
Contractor Galliford Try is to start bidding for social housing contracts, the firm’s boss Bill Hocking has said after announcing half year results yesterday.
Hocking confirmed the firm would start bidding for social housing frameworks now a no-compete clause with housebuilder Vistry, which bought its Linden Homes business three years ago, has elapsed.
The firm works building homes in the private rented sector and is carrying out a £56m scheme in Milton Keynes and a £105m deal in Leeds – currently Galliford Try’s biggest job.
“We build residential schemes for private clients all the time. We’ve got no reason we shouldn’t bid for [social hosing].”
Hocking said the schemes it would look at would be mid-rise new build jobs for registered social landlords but added: “We are not going to build houses.”
Hocking added that fears of a recession in the wider construction industry were receding, with projects previously mothballed now coming back on stream.
This week the latest S&P Global/CIPS UK Construction PMI figures showed total construction orders in February increased at their fastest pace for nine months, albeit residential work continued to decline.
Last autumn, Hocking said he thought any recession would be shallow and yesterday said worries of a tough year ahead were easing.
“The public sector has been fairly consistent [in their confidence] and the private sector is now a lot more bullish,” he said.
Last year’s slowdown had been caused by rising inflation and political turmoil, notably the impact of last September’s mini-Budget, Hocking added.
“Apart from some politically-induced delays or the fear of recession, [the slowdown] has not affected the business at all.”
The firm said it was expecting full-year pre-tax profit to be at the upper end of analysts’ expectations with the market consensus pencilling in profit of between £20m and £23.3m on revenue up 9% to £1.35bn.
But he warned that while inflation was slowing costs had not come down. “It’s just that they’re not continuing to go up like they were.”
The firm has written protection clauses for inflation into its contracts which Hocking said “most” clients had been prepared to sign up for. “It’s pleasing to see their pragmatism,” he added.
Interim group turnover was up 14% to £679m with the firm climbing back into the black with a pre-tax profit of £7.6m from a £2.6m loss last time, after exceptional items, including costs associated with its deal to buy collapsed firm NMCN’s water business.
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