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Galliford Try cuts 350 jobs from its construction arm
House builder Galliford Try is to cut 350 jobs from its construction arm following a strategic review of the business as it tries to improve its profitability.
The company said it will now concentrate on its core strengths in building, water and highways, having already ceased bidding on fixed-price major projects three years ago.
Galliford Try warned last month that the plans to scale back its core construction arm would hit profits by between £30m and £40m, but said today that its guidance for the rest of the year remained unchanged.
The latest announcement confirmed the construction division would shrink to a revenue base of around £1.3bn, from a previous £1.5bn.
Graham Prothero, chief executive at Galliford Try, said: “We have made some difficult decisions in response to the challenges faced by the group’s construction business. The associated operational changes are being implemented across the business. We are confident that the decision to refocus our construction activities will deliver a more stable business for the future and support improved margins.”
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Elsewhere, the company said its Linden Homes division, which builds homes for sale, had maintained a sales rate of 0.68, slightly down from 0.71 last year, in “continuing stable market conditions”.
The number of units reserved, contracted or completed was 4,320, compared with 4,494 in 2018, at a slightly lower average selling price which reflects the different mix of homes it built.
Galliford Try’s partnerships and regeneration business, which builds affordable homes, reported a £1bn contracting order book, down from £1.15bn at the same point in 2018. But it hugely increased its landbank, from 2,918 plots in 2018 to 5,128 plots now, thanks to a recent contract win through Homes England’s Delivery Partner Panel.
The partnerships and regeneration arm has also been selected by Enfield Council to deliver the first 725 homes at the £6bn Meridian Water development, Galliford Try said.
Mr Prothero said: “Despite the ongoing macro-economic and political uncertainty, housing demand continues to be supported by a strong mortgage market and by Help to Buy. Linden Homes continues to see a steady sales rate and to deliver operational improvements, and we are delighted with the continued strong progress of our partnerships and regeneration business.”
