The chief executive of Galliford Try has said he does not expect the Spring Budget to contain anything “of great import” to his company.
In an interview with Construction News, Bill Hocking also said he is relaxed about which party wins the next general election but is keen to seen an overhaul of the UK’s planning process – in particular relating to national infrastructure schemes.
Hocking was speaking as Galliford Try published interim results for the six months ending 31 December. The group’s revenue increased 21 per cent year on year to £819m, while pre-tax profit increased by a third to £15.6m.
“We don’t foresee any changes in spending plans [that affect Galliford Try] – departmental budgets have already been set,” said Hocking ahead of chancellor Jeremy Hunt’s tax and spending announcements this afternoon.
“If there is some change, I think it will be very moderate in terms of our sectors. We don’t see anything of any great import coming out of the Budget today in terms of our markets.”
Hocking added that “giving markets confidence is the main thing” he would like to see from the budget, saying that recent growth in the company’s building division was largely due to a bounceback after “a hiatus [in developer investment] after the Liz Truss debacle”.
Financial markets were spooked in 2022 after then prime minister Truss and her chancellor Kwasi Kwarteng announced unfunded tax cuts in a disastrous “mini-budget” that cost the country £30bn, according to the independent Resolution Foundation.
Hocking told CN that despite the impact of politics on the economy, Galliford Try is relaxed about the outcome of the next general election, which is widely expected to take place later this year.
“In all of our sectors the work has to carry on regardless, pretty much. I don’t want to sound blasé about that, but if you look at defence, education, water, highways, energy… everywhere you look there is a huge amount of work to be done.
“I think whichever government [comes next], our markets remain robust,” he said, before adding: “Historically Labour governments have been better for the construction industry than Conservative.”
However, on the UK planning process Hocking said: “The whole consenting process can take forever and is open to challenge from all. Respecting democracy [is important] but [we need to ensure] we can’t allow interminable challenges to delay the infrastructure that this country needs.”
Galliford Try has a forward order book of £3.7bn, a divisional operating margin of 2.5 per cent and an average month-end net cash of £150m, according to results posted to the London Stock Exchange this morning.
The company’s building division saw its revenue increase 12 per cent to £446m, while its infrastructure division saw revenue leap 31 per cent to £362m. The company also had £11.1m in “investments” revenue after starting work on its first build-to-rent development, in Cardiff.
In a statement accompanying the results, Hocking said: “There is strong momentum in the business and our continued excellent performance is a reflection of our disciplined strategy, committed people and long-established relationships with our supply chain and clients.
“Our strong and high-quality order book, predominantly in long-term frameworks, provides visibility and security of future workloads and continued growth prospects well beyond the current financial year.
“Our performance over the past three years, together with our excellent people and our strong balance sheet, gives us confidence to announce our updated strategy to 2030 at a Capital Markets Event on 23 May 2024.”
