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The chief executive of the construction company is frustrated at being able to pick up a bargain

by Carlo Svaluto Moreolo

The chief executive of house building and construction firm Galliford Try, Greg Fitzgerald, threw open the door to his own personal coffers, making last week’s biggest boardroom share buy. Calling shares in the company ‘ridiculously cheap’, both he and his wife Judith, ploughed in £297,000 between them to snap up a slug of 600,000 shares in the company. This takes Fitzgerald’s stake – including stock owned by Judith Fitzgerald – to just shy of 3.2 million shares, a stake worth nearly £1.8 million at the current 56p trading price.

The 43-year old CEO says: ‘To be honest I was going to buy the shares the week before at 55p, before they fell further.’ Fitzgerald can’t hide his frustration at the current share price, which is at its lowest level for years, having drifted from 180p to below 50p in the past 12 months. The shares have fallen along with the wider construction sector, particularly due to the company’s exposure to the housing market.

He admits things are really tough in the market, but objects: ‘We have a huge construction business, with a strong infrastructure division. We also have an excellent affordable housing division that will support us during the slowdown in the housing market. We have more grants in this sector than any developer in the country.’

He became CEO of Galliford Try in 2005, after a career in house building, as he was one of the founder members of Midas Homes in 1992. Midas was then acquired by Galliford Try in 1997. Fitzgerald has been a strong advocate of the so-called ‘hybrid’ model, whereby construction companies develop a range of skills rather then focusing on one sector, a strategy that has helped Galliford Try so far. The interims in February showed a 56% increase in taxable profits to 33.8 million.

Merrill Lynch analyst Mark Hake last month downgraded his June 2008 EPS forecasts by 24.8% to 10.6p. However he expects a 12.1% EBIT margin and that the dividend, which should yield 6.07% for 2008, will be 3.21 times covered by earnings.