Galliford Try has delivered strong growth and profits in the year to June after a surge in previously delayed building jobs and a strong flow of water infrastructure spending.

Pre-exceptional pre-tax profits jumped 40% to £33m on turnover rising 27% to £1.77bn.

The improvement helped group operating margin edge up to 2.5% as the firm remained selective about new work on the back of a strong order book.

Bill Hocking, chief executive, said: “During the year, the group enjoyed the benefits of both strong AMP7 revenues from its water clients and the realisation of delayed Building division projects that had been delayed due to public sector challenges and inflation delays in 2022.

“As AMP7 now runs off, we are pleased by the early trading on the change over to the much larger AMP8 water plan, with the contract awards reflecting recognition of our differentiated quality offering, supporting delivery of our Sustainable Growth Strategy target of in excess of £2.2bn of revenue by 2030.”

The results were ahead of city expectations with the infrastructure division leading the growth spurt, as building strengthened its margins.

The building division’s order book is now 2% ahead of last year at £2.3bn, while infrastructure was nearly 5% ahead at £1.5bn.

Hocking added: “We are confident in the outlook for the current financial year, with 92% of revenue already secured for this financial year.

“We are also encouraged by our recent framework and sector wins which align with our strategy to 2030 and underpin the opportunity to deliver further strong performance and sustainable long-term value for all stakeholders.”

Galliford Try’s order book reached £3.8bn (2023: £3.7bn), which has been further boosted by further water framework wins after the year-end.

Galliford Try has set it sights on growing margins to 4% by 2030, which it aims to achieve by building workloads steadily in higher margin areas.

Hocking “We will also grow our higher margin specialist businesses, including within Environment where we have completed several acquisitions to increase our capital maintenance and asset optimisation capabilities.

The firm was also develop the Specialist Services division and Affordable Homes business where margins reach 6%.

He said that the firm was making progress in re-establishing relationships in the house building sector, winning framework positions and bidding selectively to grow the business.”

Galliford Try said it had started a share buyback programme of up to £10m.

With strong average daily cash up 13% to £155m, this would still provide needed “flexibility for growth-related investments, including acquisitions”.