Galliford Try - nearly 50% higher and still they look undervalued

Mark Watson-Mitchell - 04.03.2026

A year ago, I commented that the investors in the shares of construction group Galliford Try (LON:GFRD) could gain confidence from this group’s continued strong performance, while analyst estimates underlined the overall attractions of the group and the prospects for its rising share price from the then 384p.

At that time, 6th March 2025, I suggested that investors should hold tightly to the group’s shares as they progress higher in sales, profits and price.

That was on the basis of a good set of Interim Results.

Well, today the group has repeated that event, as it reported a strong first half to end-December 2025, with revenue increasing by 1.3% to £934.9m and adjusted profit before tax rising by 20.5% to £24.7m, leading to an improved divisional adjusted operating margin of 3.2%.

The company has a secure order book of £4.1bn, with 98% of projected FY26 revenue secured, and anticipates full-year revenue and adjusted profit before tax to be above market expectations.

The recent acquisition of Nene Valley Fire & Acoustic for some £10.0m is expected to be margin accretive.

The interim dividend was increased by 18.2% to 6.5p per share.

Management Comment

CEO Bill Hocking stated that:

"I am pleased with the Group's performance in the first half of the financial year which supports increased confidence in improved revenue, adjusted operating margins and profit expectations for the full year.

In addition to the transition to the AMP8 water programme and our continued framework and project successes, we also see further opportunities across all our chosen sectors.

Our track record of operational delivery, focused risk management, committed people and established relationships with our supply chain and clients provides consistency to our results.

The Group benefits from a strong balance sheet and a high quality, carefully selected order book, providing good visibility of future workloads well beyond the current financial year.

Continued investment in our people ensures consistent delivery for our clients and positions us well to support the Government's commitment to economic growth through major infrastructure investment.

Our continuing strong performance and order book gives us confidence to raise our expectations for the full year to 30 June 2026.

We will continue to focus on driving long-term value creation for all our stakeholders in our Sustainable Growth Strategy to 2030."

Broker's View

Analysts Joe Brent and Joe Walker, at Panmure Liberum, put out a Buy note on the group, with an increased Target Price of 650p (600p).

For the current year to end June, they estimate sales of £1,945m (£1,875m) with pre-tax profits rising to £53.4m (£45.0m), lifting earnings to 39.5p (32.9p) and an increase in the dividend to 22.6p (19.0p) per share.

The coming 2027 year could see revenues of £2,010m, profits of £56.9m, with earnings at 42.4p and a 24.2p dividend.

They state that:

"We maintain our BUY recommendation but increase our TP from 600p to 650p; a CY 26 P/E of 13.0x is still cheap given the growth potential.

We maintain our BUY recommendation but increase our TP from 600p to 650p to reflect the profit upgrades.

The market is attributing insufficient value to the Building and Infrastructure businesses, which is unjustified given management has returned the business to profitability while implementing a strict low-risk strategy."

My View

The brokers are targeting earnings of 60p a share by 2028 - which makes the group's shares at the current 574p, up nearly 8% on the day, still look attractive.

However, after today's rapid rise, new investors should wait back a while to see if some profit-taking helps to offer the shares more cheaply.