Galliford Try shares hit a record high on Wednesday after the contruction group said it stands to ‘benefit’ from the government’s plans for affordable housing and infrastructure.Â
The group, which operates across the public and regulated sectors including water, transport and building projects, expects to report a profit ahead of forecasts this year.
The government’s infrastructure strategy pledged £725billion over the next decade, while the spending review committed billions to the affordable housing pipeline.
The strategy included £15.6billion for city region transport settlements and £2.6billion earmarked for transport decarbonisation.
Galliford Try shares rose 3.31 per cent or 13.90p to 433.90p on Wednesday, having surged over 60 per cent in the last year.Â
National Infrastructure and Service Transformation Authority chief Becky Wood described the infrastructure spending as crucial to ‘ensuring our vital public services remain resilient and fit for purpose’.Â
Beneficial: Galliford Try said it stands to ‘benefit’ from the government’s plans for affordable housing and infrastructure
In a trading update on Wednesday, FTSE 250-listed Galliford Try said it expects to report full year revenue and adjusted profit before tax slightly above the upper end of current analyst forecasts.Â
The current forecasts are around £1.8billion for revenue and between £40.1million to $41.6million for pre-tax profit.Â
The construction group said it had secured a number of large contracts this year, including an £850million project with Yorkshire Water, a £1billion highway project with the North East Procurement Organisation Civil Engineering and Infrastructure Works, and an £814million facilities project with Pagabo.
Around 90 per cent of Galliford Try’s work is secured via long-term frameworks with government and regulated utilities.Â
The firm said its order book was ‘robust’, standing at £4.1billion on 30 June and up from £3.8billion last year. Â
Bill Hocking, chief executive of Galliford Try, said: ‘All our operations continued to perform strongly throughout the second half of the year and we expect to report another year of increased revenue and profit in September.
‘Our balance sheet strength and reputation continue to be key to all stakeholders.Â
‘We welcome the Government’s commitment to invest in improving the UK’s social and economic infrastructure and affordable housing.Â
‘As a UK only contractor, our confidence in the future is supported by our high-quality order book as well as a long-term pipeline of future opportunities in key sectors as supported by the investment proposals in last month’s Spending Review and UK Infrastructure Strategy plans.’
He added: ‘We are excited about the opportunities in our chosen sectors and the delivery of further strong performance and long-term value for all stakeholders as we work to deliver our sustainable growth targets by 2030.’
Analysts at Peel Hunt upgraded the broker’s price target for Gallifford shares on Wednesday from 500p to 525p.
Peel Hunt said: ‘As a UK-only contractor, Galliford’s outlook is supported by the composition of its order book and a long-term pipeline of opportunities in its chosen sectors.Â
‘These markets have been further supported by recent government initiatives, including the Comprehensive Spending Review, the UK Infrastructure Strategy, and the UK Industrial Strategy.Â
‘We also highlight the additional support from favourable structural shifts in procurement and supply chain behaviours.’Â
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