The new look Galliford Try (GFRD) is off to a strong start, gaining 10.3% to 159p as it updates on trading after the sale of its housebuilding operation.

The business is now fully concentrated on the construction sector, having sold its Linden Homes division and regeneration arm to Bovis (BVS) – a deal which completed on 3 January.

The company said it continued to expect performance to be weighted to the second half of the financial year due to market uncertainty and the settlement of certain claims in the first half.

However, this is fully in line with expectations and encouragingly Galliford said it had entered the New Year with an order book of £3.2bn underpinned by recent 'significant' contract wins.

As at 31 December 2019, the group's pro-forma cash balance was £225m, with average month-end cash balances for the second half of the financial year expected to be in excess of £100m.

Investors’ attention will now turn to the publication of half year results in full on 12 March, and more pertinently the strategy update which accompanies it.

This will be a first opportunity for new chief executive Bill Hocking, who assumed the role at the beginning of 2020, to outline his vision for the streamlined group.

Reflecting on the importance of a strong balance sheet in a sector which has seen several businesses run into financial difficulty, Hocking said: ‘The successful completion of the disposal of the housing and partnerships divisions means Galliford Try is now a well-capitalised and focused UK construction group.

‘Our robust financial position combined with market leading positions in our chosen sectors means that we are strongly positioned for future disciplined growth.’

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Issue Date: 09 Jan 2020