Galliford Try’s reboot puts contractor in a good place

Galliford Try Holdings PLC is one of the UK’s leading construction groups, working to improve the UK’s built environment and delivering lasting change for the communities it works in.

Operating as Galliford Try and Morrison Construction, the group carries out building and infrastructure projects with clients in the public, private and regulated sectors across the UK.

Galliford stands out in a competitive market for its innovation and values-driven approach, being a people-orientated, progressive business, driven by its values.

The group’s strategy is focused on robust risk management, sustainable growth, careful cash management, and margin progression. Galliford focuses on sectors where it has core and proven strengths, underpinned by its disciplined approach to project selection.

Galliford Try PLC has snapped up substantially all of nmcn’s water business including the specialist water process and control businesses Nomenca and Lintott for an aggregate consideration of GBP1mln in cash.

Bill Hocking, Galliford Try’s chief executive, said: “This acquisition is an excellent strategic fit with our existing business and will accelerate the growth of our successful environment division, providing work with new clients and increasing our capabilities.”

Formerly North Midland Construction, nmcn entered administration on Monday (4 October) since when its businesses have started to be sold off piecemeal.

The water business generates annual revenue of approximately GBP100mln and the transaction is expected to be immediately earnings enhancing, before transaction and restructuring costs.

Galliford Try Holdings PLC (LSE:GFRD) was added to a key new public infrastructure framework, maintaining its position as an approved services provider for school, community and public buildings projects.

The company said in a statement it has been added to the GBP1.6bn LHC Public Buildings, Construction, and Infrastructure PB3 framework – which replaces the LHC’s prior School and Community Building framework.

Galliford Try is in a good place according to broker Liberum with its restructuring now complete and legacy contracts rolling off.

Balance sheet strength is key adds the broker, which is expecting the contractor to have net cash of GBP239m of spot net cash and GBP217m of average monthly net cash by the end of GBP222mln.

Galliford Try’s acquisition of nmcn’s water businesses (out of administration) for GBP1m is consistent with the recently articulated sustainable growth strategy, said Peel Hunt.

The broker has raised its June 2022E profits estimate to GBP18mln from GBP17.5mln to reflect the purchase with a first full year bumping up the 2023 numbers to GBP21mln from GBP19.7mln or 7% accretion.

There is potential for more outperformance given the new growth opportunities arising from Galliford’s strong sector record, the complementary client portfolio and synergistic activity profiles.

Galliford Try PLC’s Andrew Duxbury talks to Proactive London about their newest acquisition – all of NMCN’s water business.

This deal includes the specialist water process and control businesses Nomenca and Lintott for an aggregate consideration of GBP1m in cash.

He explains how this move fits with their existing business and now plan to accelerate the growth of their environment division.