Galliford Try has set aside £98 million to cover costs on two major infrastructure projects.

In a trading update, the company revealed it was setting aside the funds to cover non-recurring costs on the legacy contracts, with 80% of which relating to its share in two joint venture projects.

The Group said: "A reappraisal of costs to complete and recoveries from two major infrastructure joint venture projects has substantially increased the anticipated liability to conclude the legacy contracts (contracted in 2014 and earlier) in the Group's Construction business since Galliford Try reported its half year results on 21 February 2017.


"The Group estimates non-recurring costs of circa £98 million, some 80% of which relates to our share of the two joint venture projects. A thorough review process has been performed to determine the anticipated liability.

"One of these projects will finish on site in Summer 2017, while the other, which represents the larger proportion of the estimated non-recurring costs, is scheduled to complete in mid-2018."

Peter Truscott, Chief Executive, said: "The impact of the legacy projects in Construction, in particular the two large infrastructure projects, is regrettable. However, as described in our recent Strategy presentation, Galliford Try is no longer undertaking large infrastructure jobs on fixed price contracts. There are no other similarly procured major projects in our current portfolio and we are encouraged by the performance of the underlying portfolio of newer work.

"Excluding the non-recurring charge, we remain confident in delivering a strong performance over the full year, and we plan to pay the dividend in line with previous guidance."

(LM)