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magazineMarket panics as Galliford Try announces £150m fundraising
Galliford Try (GFRD) 878p
Loss to date: 20% (stopped out)
Original entry price: ‘Buy’ at £11.51, 30 November 2017
Construction, regeneration and housebuilding company Galliford Try (GFRD) falls out of our Great Ideas portfolio after share price weakness triggered our stop loss.
The market didn’t like news of a £150m fundraising which is associated with needing money to finish a project carried out in partnership with failed construction firm Carillion and Balfour Beatty (BBY) in Aberdeen.
The company says it could have absorbed the extra costs without having to issue new shares but it didn’t want to divert resources away from its better performing regeneration and housebuilding divisions.
Liberum analyst Charlie Campbell says the capital raise ‘is neither a signal of a worsening outcome on the Aberdeen road nor a sign of urgent need; rather we see this giving the group a balance sheet more appropriate for its activities and growth prospects’.
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