Record property year is thwarted

Sep 12 2008 by Peter McCusker, The Journal

HOUSEBUILDER Galliford Try yesterday said a record year for its construction arm was thwarted by the housing downturn as the firm posted flat annual profits.

The Uxbridge-based group said its construction division – working on projects including the clean-up of the London 2012 Olympic park and the rebuilding of Wimbledon’s Centre Court – was in excellent shape.

But the declining property market squeezed housebuilding margins and selling prices as the firm offered more discounts and sales incentives.

Pre-tax profits were virtually unmoved at £60.3m in the year to June 30, despite a 30% leap in revenues to £1.83bn following its acquisition of Linden Homes in 2007.

The firm’s aggressive pricing strategy saw average selling prices fall from £242,000 to £220,000 over the year. It also cut 240 jobs and merged some regions to cope with the downturn.

Since the end of June, sales have halved to £126m. Visitor levels to its sites have fallen 15%, although cancellations have fallen from a peak of more than 60% in the spring to around 20%.

North East builder Barratt yesterday announced a profit fall of 68% and unveiled a package of measures to encourage buyers back into the market.