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Builder Galliford Try's sales, prices up after Brexit vote

Published 14/09/2016, 08:30
© Reuters.  Builder Galliford Try's sales, prices up after Brexit vote
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By Costas Pitas

LONDON (Reuters) - Galliford Try (LON:GFRD) said on Wednesday sales rates and prices at its housing division had risen since Britain's vote the leave the European Union, adding to signs the housing sector is recovering from an immediate hit after the June 23 referendum.

In the aftermath of the result, some housebuilders saw around a third of their share price wiped off and numerous commercial funds were temporarily suspended as investors pulled out their money.

But in recent weeks, several builders have said sales have risen, and data has suggested prices are climbing again.

"Consumer confidence has simply been gradually returning following the referendum," CEO Peter Truscott told Reuters.

"As soon as you got that stability with a new government ... you could just see that consumer confidence generally was returning and people were starting to see that it was beginning to look and feel like business as usual," he said.

Britain's biggest housebuilder Barratt and smaller rival Redrow (LON:RDW) have both said sales have increased in recent weeks.

In August, British house price rises also increased more quickly than expected as a shortage in the market outweighed uncertainty over the Brexit vote and a recent tax increase, according to mortgage lender Nationwide.

But Galliford Try, which posted a slightly better-than-expected 18 percent rise in pretax profit to 135 million pounds for the year ended June, said it would maintain a cautious approach towards land purchases due to the economic uncertainty created by the vote.

In its construction division, the firm said there had been almost no downturn caused by the referendum, with around 90 percent of its work coming from public sector projects to build infrastructure such as schools, roads and hospitals, which were all continuing as planned.

However, some private commercial work had not started as planned in the aftermath of the vote.

"Gradually as confidence returned we've seen most of those projects now start. Some haven't but the vast majority actually have," Truscott said.

Shares in the firm were up 4.8 percent to 1,191 pence at 0720 GMT.

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