Contractor Galliford Try is returning to the affordable housing market as a key part of its new sustainable growth strategy to 2030.<\/p>\n
Following a market announcement to investors and shareholders today (23 May), chief executive Bill Hocking told Construction News <\/em>that the new 2030 plan involved re-entering the affordable homes market and \u201cputs more emphasis on our higher-margin specialist businesses\u201d.<\/p>\n Galliford sold its Linden Homes and Galliford Try Partnerships businesses to Vistry<\/a> for a combined \u00a31.1bn in January 2020.<\/p>\n This divestment from housebuilding shielded Galliford from the decline in the residential construction market but Hocking said that the time is ripe to return.<\/p>\n This is partly because a restrictive covenant on the deal with Vistry has now expired, he said.<\/p>\n \u201cLast year we started to get back into that market, and we intend to go from a standing start to be a reasonable-sized player [by 2030],\u201d he added.<\/p>\n Hocking said his firm is targeting the construction of affordable low-to-medium density blocks of flats for residential social landlords and local authorities.<\/p>\n \u201cWe\u2019re not talking about housebuilding \u2013 it\u2019s a totally different game,\u201d he said.<\/p>\n Galliford said it expects its divisions to achieve an operating margin of 4 per cent in six years\u2019 time, with an annual revenue of \u00a32.2bn.<\/p>\n This compares with a \u00a31.39bn turnover in the year ending 30 June 2023.<\/p>\n The latest growth strategy for the London Stock Exchange-listed contractor follows its 2021-2026 plan, which targeted annual revenue of \u00a31.6bn and a 3 per cent operating margin by 2026.<\/p>\n \u201cThe upshot is we\u2019re trading ahead of that expectation,\u201d said Hocking. \u201cThis year, we’ll be bumping up against those original 2026 targets two years ahead of schedule.\u201d<\/p>\n In its most recent annual results announcement last September<\/a>, Galliford said it was set to make around \u00a327m in pre-tax profit in 2023\/24, with 92 per cent of its order book already filled.<\/p>\n The company\u2019s order book stood at \u00a33.7bn at the start of the current financial year, up by 8.8 per cent from the previous year.<\/p>\n Hocking told CN<\/em> that infrastructure will account for about \u00a3700m of revenue in 2023\/24, \u201cand we envisage that continuing to grow\u201d.<\/p>\n He has been directly responsible for Galliford\u2019s infrastructure activities, but said that growth in this area was the main reason a new post of divisional managing director for infrastructure was created<\/a>. David Lowery will take up the role on 1 July.<\/p>\n Hocking said the firm\u2019s activities in water infrastructure<\/a> and roads<\/a> frameworks will remain major revenue generators but the firm is also \u201caccelerating the growth of our specialist businesses\u201d.<\/p>\n Recent acquisitions included a \u00a37m deal last November for mechanical and electrical specialist AVRS Systems, which has a place on multiple water frameworks.<\/p>\n \u201cWhile our strategy doesn\u2019t anticipate or depend on any further acquisitions\u2026 if something comes along that accelerates our strategy, then we\u2019ll have a look at that,\u201d said Hocking.<\/p>\n \u201cWe’ve got the balance sheet, the agility and the proven experience in acquiring and integrating companies to do that.\u201d<\/p>\n Galliford identified \u201cgreen retrofit\u201d as a growth area in its latest strategy announcement. Hocking said the phrase has an \u201cenormously wide definition\u201d, ranging from installing energy-efficient lightbulbs to more complex building alterations.<\/p>\n