Britain's Galliford sees return to profitability, dividend resumption

(Reuters) - British construction firm Galliford Try GFRD.L on Wednesday said it expects to return to profitability in fiscal 2021 as site activity resumes and productivity nears normal levels, after coronavirus lockdowns led to a loss this year.

The FTSE small-cap company reported a loss for the second year running, but said it expects to resume dividend payouts next year as margins improve and a year-on-year increase in its order book helped it secure 90% of planned revenue for 2021.

“We have successfully transitioned to a well-capitalised UK construction business and I am confident about our future ... The Group is performing well and focusing on its core strengths of building, highways and environment,” said Chief Executive Officer Bill Hocking.

Galliford, known for the re-development of the Wimbledon tennis venue, forecast revenue between 1.1 billion pounds and 1.3 billion pounds ($1.4 billion and $1.7 billion) for the year ending June 2021.

The company’s operating margins had taken a massive hit from the pandemic in fiscal 2020 and it has been opting for smaller contracts to avoid unexpected cost hits from larger, fixed-price contracts.

Excluding one-time items, Galliford reported a pretax loss of 59.7 million pounds for the year ended June 30, compared with a loss of 17.2 million pounds last year. Revenue fell 22% to 1.09 billion pounds.

Peel Hunt analysts said the reinstated guidance was confident, given the company’s “well-bid order book, attractive infrastructure markets and the sector-leading balance sheet.”

(This story corrects to FTSE small-cap company from FTSE 250 company in paragraph 2)

Reporting by Pushkala Aripaka in Bengaluru; Editing by Devika Syamnath