Galliford Try (LON:GFRD) reported a sixth consecutive year of improvement in its key financial measures for the year ended 2026, supported by margin gains in its Building and Infrastructure divisions, strong cash generation and a growing order book.
The construction group said revenue increased 3% to £1.93 billion, while adjusted profit before tax rose 24% to £55.9 million. Adjusted operating profit increased 21.9% to £49.5 million, with divisional adjusted operating margin improving to 3.5% from 3.0% a year earlier.
Profit growth outpaced revenue
Kris Hampson, Galliford Try’s CFO, said the results reflected “continued execution” of the company’s strategy, with profit and margin growth exceeding revenue growth. He attributed the margin progression to commercial discipline, improved terms on newer frameworks, delivery from the group’s risk-managed order book and a larger contribution from specialist services businesses.
Adjusted basic earnings per share rose 23.1% to 42.4 pence. Net interest income increased 45% to £6.4 million, reflecting higher average cash balances and cash management. The adjusted effective tax rate was 25.0%.
The company raised its full-year dividend 23.5% to 23.5 pence per share. Hampson said the group planned to continue growing its dividend while maintaining 1.8 times adjusted EPS cover.
There were no exceptional items during the year, marking the second consecutive year without such charges, according to the company.
Building and Infrastructure margins reach 3.5%
In the Building division, revenue slipped to £951 million as delayed decision-making pushed some activity into 2027. However, adjusted operating profit increased 17.8% to £33.1 million and margins rose by 57 basis points.
The Building order book increased by more than 8% to £2.7 billion. Galliford Try said it had secured 93% of Building revenue for financial 2027 and 60% for the following year. Demand was particularly strong in defence and custodial work.
The Infrastructure division delivered revenue growth of 7.7% to £971.6 million, aided by the transition from AMP7 to AMP8 in the water industry and what Hampson described as an exceptional year for highways.
The highways business completed and opened three major road projects during the year: the Melton Mowbray distributor road, also known as the Pork Pie Way; the Carlisle Southern Link Road; and the A47 project at Blofield in Norfolk. The projects represented more than £400 million in total revenues and included approximately 12 miles of roads and 15 major structures.
Infrastructure adjusted operating profit increased 25.2% to £34.3 million, while margin also reached 3.5%, up 49 basis points. The infrastructure order book remained at £1.7 billion, including £1.17 billion in environmental work. The division had secured 87% of revenue for the current financial year and nearly two-thirds for financial 2028.
Management said Infrastructure revenue was expected to be broadly flat in 2027 as the revenue mix shifted toward environmental work and highways teams moved into earlier phases of new projects.
Cash strength supports buybacks and investment
Year-end cash rose 9% to £259 million, while average month-end cash increased 21% to £216.2 million. The company reported no bank debt or pension liabilities, and its £25 million revolving credit facility remained undrawn. Galliford Try extended the facility to 2029.
Cash from operating activities totaled £56.1 million, ahead of adjusted operating profit, while working capital generated a £0.9 million inflow for the year. The group said it had delivered 100% cash conversion.
During the year, Galliford Try deployed £39.5 million of capital, including:
- £20.3 million in cash dividends;
- £10 million for a share buyback completed in April;
- £8.1 million for the acquisition of Nene Valley Fire; and
- £1.1 million of organic investment, including work at its Keighley fabrication facility and commercial reporting systems.
The company said corporation tax payments would resume in 2027 after historic tax losses had largely been used. Hampson said the group expected to retain flexibility to pursue bolt-on acquisitions, organic investment and further shareholder returns, depending on its pipeline of opportunities.
Focus on specialist services, water and affordable homes
Management said future acquisitions would remain bolt-on and focused on adjacent specialist markets. Areas of interest include capital maintenance and water technologies, fire protection, asset security and hard facilities management.
Hampson said Nene Valley Fire was performing ahead of its business case, with integration progressing and cross-selling and geographic expansion underway. The company is seeking to develop broader capabilities across clean water, wastewater and fire services.
In water, Galliford Try said design work under AMP8 was progressing into construction and manufacturing activity. Hampson said the group expected water revenues to reach approximately £600 million at the peak of AMP8, compared with around £250 million represented by its original water frameworks and acquired water revenues.
Management also pointed to renewed activity in affordable housing following the government’s announced £10 billion funding allocation. Galliford Try has begun its first affordable-housing project in Chester and said it was in discussions with registered providers about additional schemes.
Looking ahead, Hampson said the company expected similar revenue growth in 2027 alongside continued margin progression. Management said Galliford Try’s substantial order book, framework positions and balance sheet provided a long line of sight for growth, while emphasizing that contract selection and risk discipline would remain central to its strategy.
About Galliford Try (LON:GFRD)
Galliford Try is one of the UK’s leading construction groups, working to improve the UK’s built environment, delivering positive, lasting change for the communities we work in on behalf of our clients.
Our business operates mainly under the Galliford Try and Morrison Construction brands, focusing on areas where we have core and proven strengths, namely in Building, Highways and Environment. We see long-term growth and appropriate margins in these markets.
Our company is founded on our values of excellence, passion, integrity and collaboration, and our vision is to be a people-orientated, progressive business, driven by our values to deliver lasting change for our stakeholders and the communities we work in.
