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Galliford to review construction business, lowers forecast

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By Reuters
Galliford to review construction business, lowers forecast
FILE PHOTO: A builder assembles scaffolding as he works on new homes, in south London June 3, 2014. REUTERS/Andrew Winning/Files   -   Copyright  Andrew Winning(Reuters)

(Reuters) – British builder Galliford Try said on Tuesday it was reviewing its construction business which would reduce the size of the unit and lead to a fall in profit for the current year.

The outcome of the review will reduce the full-year post-exceptional pretax profit by 30 million pounds to 40 million pounds below the current consensus forecast of 156 million pounds, the company said.

The review includes an assessment of operational progress and contract positions throughout Galliford’s construction business, with the single largest element being the Queensferry Crossing joint venture, which recently increased its estimated final costs on the project.

A majority of its construction businesses continued to perform well and these adjustments would not have a significant impact on its previous guidance for net debt this year, the housebuilding, regeneration and construction group said.

The review comes weeks after former Finance Director Graham Prothero took over as the builder’s new chief executive officer.

Galliford, known for construction projects ranging from the redevelopment of the Wimbledon tennis venue to hospitals and city bypasses, has also faced Brexit hiccups, with the government distracted from embarking on major projects because of Brexit.

Galliford’s shares were seen opening lower 5 to 25 percent, according to traders.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Gopakumar Warrier)