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TWST: Can we set the context with quick introduction to Galliford Try (London: GFRD.L)?

Mr. Calverley: Galliford Try was created a little over two years ago by the merger of Galliford and Try giving us the two divisions of the business: construction and housing. We have in place a strategy for sustainable growth that’s based on: construction, being a market leader in the delivery of a complete construction service through a partnership approach with a strong sector focus; housing, being a leading regional developer with strong local brands specializing in individually designed developments, with an expertise in brownfield and conversion work.

TWST: We spoke close to a year ago. Could you summarize those 12 months in terms of key developments and overall performance?

Mr. Calverley: On the financials we reported record profits of £18million for the year to June. That was 19% up on the previous year. Earnings per share was up 14% to 5.8 pay per share. Borrowings were £12.9 million representing a gearing of 24%. So that was the overall position. Underneath that we saw excellent results on our housing side, but disappointing results on our contracting side, the details of which I will cover. The operational highlights were three small acquisitions during the end of the previous year, Gerald Wood Homes and Knapp Homes on the housing side and a company called Burton Communications, which specializes in the rigging of telecoms masts, on the construction side. They were successfully integrated into the business during the year. The other highlight was we entered into a joint venture to develop Fairfield hospital near Letchworth in Hertfordshire and we entered into a three year joint venture contract with United Utilities in the water industry. This is a framework contract, a joint venture with Costain and has a value of £215 million in total. We finished the year with a strong construction order book of about £592 million. On the construction side, our results were disappointing and looking to this year will be roughly in line with last year. We are taking action to address this. We announced recently that we were going take a restructuring provision in the current year to deal with the specific areas of concern, which are: our maintenance business and some traditional building contracts. These particular types of contract are coming to a conclusion. There is only one that isn’t complete and it will be completed this month. So we’re confident that the action we’re taking will address these issues and that next year we will move forward on the construction side. We have appointed a new Managing Director of Construction, Andy Sturgess who joins us from Skanska where he was Director responsible for all UK building operations. He brings to us the experience of managing one of the UK’s leading building contractors, and in particular has extensive expertise in working for the public and regulated sectors as well as for commercial clients, much of it through partnerships and framework agreements.

TWST: On the construction side, do you have exposure to both the commercial and the public sector?

Mr. Calverley: Yes, but if you went back a year 50% of our order book would have been in the commercial sector, 50% would have been in the public and regulations sector. Today, it’s over 70% in the public and regulatory sector, and 30% in the commercial sector. That was a deliberate move because there’s no doubt, over the next few years, the spend will be in the public and regulated sector, whereas the commercial markets will be quieter. So there has been a transition during the year, which will create benefits going forward.