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Results point to “fragile” recovery

25 February 2011

Despite a fragile market, a number of contractors posted profits last year point to a “progressive recovery”, Building reported.

Both Kier and Galliford Try reported increased profits despite a challenging environment revenue. Kier's profits grew by 9% and underlying pre-tax profits jumped by over a quarter at Kier in the six months to 31 December. It made an underlying pre-tax profit of £31.3m compared to £24.8m in 2009 - although this excludes a profit in that year of £7.1m from Partnerships Homes land. Higher margins at Galliford Try’s construction business boosted profits by 29 % in the six months to 31 December 2010. After allowing for one off charges, the firm made a pre-tax profit in the last six months of 2010 of £17m, compared to £13.2m a year earlier.

Australian Lend Lease Group, saw operating  profits after tax increase by 17% in the first half of the 2010 financial year, and after tax profit increase to AU$220m in 2010, up from AU$188m in 2009- although global revenue fell 22% to AU$4.4bn (£2.75bn) in the first six months of its financial year, compared with AU$5.6bn (£3.5bn) in the same period a year earlier.

According to a Lend Lease spokesman, the UK market is “likely to see a progressive recovery but it will still be some time before it sees a full one”. While it did not disclose the financial performance of the UK business, Steve McCann, group chief executive, said: “In Europe, despite continuing difficult conditions we have had a good profit result.”

And there was good news for volume house builder Barratt, which slashed its losses and saw its revenues hold firm in the six months to December 31.The company posted a £4.6m loss, compared to a loss of £178.4m in the same half of 2009. Revenue was slightly up, at £877.6m compared to £872.4m. However, chief executive Mark Clare said the market remains “fragile” and emphasised that longer term recovery will depend on the greater availability of mortgage finance.

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