New profits warning
Galliford Try shares sink as business to be reshaped
Queensferry Crossing: readjusted final cost (pic: Terry Murden)
Shares in Galliford Try, which built the Queensferry Crossing over the Forth, fell 20% after it announced another profits warning and said it would undertake a strategic review of its construction arm that will reduce the size of the business.
The firm said the review that will focus on its key strengths in markets and sectors with sustainable prospects for profitability and growth, where it has a track record of success.
Its annual profits this will be £30 million to £40m down on previous expectations due to restructuring costs and additional provisions for loss making contracts.
Analysts had expected £156m for the full year, but this could now be reduced to as low as £116m.
In a statement to the London Stock Exchange, the company said: “The board anticipates that this review will result in reduced profitability in the current year reflecting a reassessment of positions in legacy and some current contracts and the effect of some recent adverse settlements, as well as the costs of the restructure.
“The single largest element relates to the Queensferry Crossing joint venture, which has recently increased its estimated final costs on the project”.
In all, the group’s full year post-exceptional profit before tax will be reduced by £30m-£40m below the current consensus analysts’ forecast, the company said.