By Malcolm Stacey | Wednesday 12 July 2017
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello Share Twitchers. Truth be told I was getting a bit worried about my Galliford Try (GFRD) shares. They initially did really well for me. So much so that I topped up rather generously a few months ago. That led to the usual falling away of share value.
But now I’ve zoomed back into profit, with a jolly report from the company on trading results for the last 12 months. Though the company doesn’t give too much away as full details will be posted on September 13th.
But it boasts of ‘a strong underlying financial and operating performance across all three businesses, with profits towards the upper end of the analysts' range’. That range for profit before tax for the year ending 30 June 2017 is £46 million to £59 million.
That was enough to lift the share price by 8% as I write. And I expect it to trickle up until the final figures are out.
It’s likely that Galliford Try’s share price has declined recently because of general fears about the building industry. These include Brexit putting off foreign buyers, a falling house market and poor wages making it hard for would-be buyers to save up the huge deposits required these days.
But Galliford Try does affordable houses and these are likely to be more in demand, if buyers can no longer afford to look at the top end. The company’s number of completions for the second half were up 7% on last time.
A different part of the business involves partnerships with local councils and housing associations. It also has a construction arm, serving both private and public projects.
It enters the financial year with an order book of nearly £5 billion. Despite a general perception that building firms must be suffering, Galliford Try says market conditions have been ‘robust’. Together with increasing efficiency in all its departments, this week's share rise may only be starting.
See you in the Punter’s Return.
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