(Reuters) - Britain’s government is being distracted from embarking on major projects by the impending exit from the European Union while private sector clients are also dragging their heels on starting work, builder Galliford Try said.
The cautious comments came after Galliford reported a 4 percent rise in first-half pre-exceptional pretax profit to £84.2 million, taking the stock 5.2 percent higher to the top of London’s midcap index.
Higher revenue in its Partnerships and Regeneration business also helped to offset a weaker performance in the company’s Linden Homes housebuilding business.
Galliford joined the chorus of companies warning that a disorderly exit from the European Union could disrupt imports of critical materials. Any weakening of consumer confidence could hit Linden Homes’ market in particular.
“The government is distracted with other things and in the private sector, some clients are just holding off the decision to commence until such time as they know what this (Brexit) is all going to look like,” Chief Executive Officer Peter Truscott told Reuters.
Galliford’s construction business reported lower revenue for the six months ended Dec. 31, hurt by cautious bidding and project deferrals.
Galliford, known for construction projects ranging from the redevelopment of the Wimbledon tennis venue to hospitals and city bypasses, said it was as prepared as possible for Brexit, adding it had engaged with its suppliers.
With Britain at risk of leaving the European Union without a divorce deal, many of its biggest companies started to prepare for the chaotic fallout that could ensue.
Truscott said Galliford wanted to be prepared for any congestion at ports and had stored materials for some projects in warehouses.
Galliford, which has moved away from higher value housebuilding markets such as central London, built 3,069 new homes, up from 2,878 last year, but reported a decline of 3.6 percent in current order book to £5.4 billion.
The firm, which completed construction of Aberdeen’s troubled motorway bypass after its joint venture partner Carillion collapsed under a mass of debt, reported 26 million pounds of exceptional costs from the project.
Galliford trails some UK builders as Carillion costs weigh: tmsnrt.rs/2BANWPw
Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier/Keith Weir