Galliford Try’s Linden Homes posts 20% margin

Galliford Try’s Linden Homes posted a near-20% operating margin in the year to the end of June, level with 2018, after completing more than 3,000 homes.

The contractor said the housebuilding operation, which it is looking to sell to Bovis together with its partnerships and regeneration arm in a £1.1bn deal, delivered £820m in turnover, down 13%, and £161m in operating profit, similarly down 13%.

Linden Homes had made “further strong progress, delivering on its strategic objectives, achieving good financial performance and preparing for further growth and margin progression”, Galliford Try said.

The group said the division built 3,227 homes, down by 6%. It delivered 17% more affordable homes in the year, 1,002, while the number of private units dipped by 14% year-on-year to 2,227.

The operation’s overall average selling price slipped by 8% to £284,000, “in line with our plan”, it said.

Its partnerships and regeneration operation fared better than last year, increasing turnover by nearly a third (31%) to £623m and operating profit up 47% to £35m.

The division was chosen by Enfield council to build the first 725 homes at the £6bn Meridian Water development in north London, while over in the west of the capital it signed a development agreement with Ealing council to create a new mixed-use scheme, including 470 homes.

The proposed £1.1bn sale to Bovis would leave Galliford Try as a pure construction play, delivering an operating margin of around 1%, its construction boss Bill Hocking said.