Galliford Try pays 20% on profit warning related to its struggling construction arm
Galliford Try lost more than a fifth of its value after a profit warning in connection with its struggling construction arm.
On a cruel day for investors, stocks fell 20.5 percent yesterday, or 149p to 576.5p, while wiping £ 165 million.
The route came after it said the full-year earnings would be £ 30 million to £ 40 million lower than predicted by analysts. It was expected to earn £ 156 million.
FTSE 250-listed Galliford said the biggest blow to profits would come from the new costs associated with the £ 1.3 billion Queensferry Crossing (photo), a bridge connecting Edinburgh and Fife
Galliford has now launched an evaluation of its construction arm, which says it is the & # 39; size & # 39; of the company.
It is just the newest government contractor to suffer after the collapse of Carillion and Interserve.
The problems come a day after Kier Group's new boss, Andrew Davies, published an evaluation to support his company's finances.
FTSE 250-listed Galliford said the biggest blow to the profit would come from the new costs associated with the £ 1.3 billion Queensferry Crossing, a bridge that connects Edinburgh and Fife.
It also has difficulty with higher bills linked to a bypass in Aberdeen following a project partner, Carillion, collapsed in administration, and problems with unnamed contracts that could cost as much as £ 38 million.
The paper-thin profit margin of the construction arm is less than 1%.
Galliford is divided into three units: construction, the residential block of Linden Homes and a partnership company that works on social housing and joint ventures with local authorities.
In the company's half-yearly results in February, construction represented more than half of Galliford's £ 1.4 billion sales, but only 7 percent of its £ 94 million operating result.
It said yesterday that it will & # 39; reduce the size of the business & # 39; to focus on its key strengths and to enter into fewer contracts in the future.
An evaluation ends next month and the outcome will be announced on May 21.