Galliford Try, the infrastructure and housing com-pany that owns Morrison Construction in Scotland, turned in record profits in several divisions in the year to June, but the housing slump forced it to declare a writedown in land values.

The company, whose activities include construction, infrastructure, public-private partnerships, housebuilding, and affordable housing and regeneration, reported a 30% increase in group revenue to £1.8bn, with pre-tax profits up 35% to £71.8m before exceptional items.

Galliford's directors were bullish about the group's prospects in their outlook statement, but said they "have taken into account the group's performance and trading prospects in the light of the current economic environment and decided that the total dividend should remain the same as last year".

Greg Fitzgerald, chief executive, said the dividend policy would be reviewed in the current year depending on the prevailing economic situation and the company's performance, but added that he could not see it increasing for the next 12 to 18 months.

The total dividend for the year was 3p, comprising a final dividend of 2.1p and an interim payout of 0.9p.

Fitzgerald said the company was not expecting any further writedowns to the value of its land bank, but added that if house prices continue to fall, the company would have to review the situation.

Housebuilding comprised about 35% of the group's profits in the year to June.

Fitzgerald said he expected this contribution to profits would fall in the current year, but would stay above 20%.

Galliford, which helped build the Falkirk Wheel, said its business mix allowed it to benefit from resilience in some sectors of the construction market. The firm made record profits in its building, infrastructure and affordable housing divisions, bolstering cash generation.

Public spending on buildings has not faltered, although the group said that there are signs that the current economic despondency in the UK is starting to affect the private commercial sector.

The group, which is based at Uxbridge, Middlesex, said it expected its infrastructure businesses would continue to benefit from long-term improvement programmes. The firm recently secured four projects worth a total of £84.5m to regenerate communities and build affordable homes in London and the south-east.

The company's financial position remains strong because of the strong cash-generation qualities of certain of its businesses, in particular, the building division. "Our early and aggressive policy on homes sales and stringent controls applied through our housebuilding business as the market deteriorated resulted in a better-than-expected net debt position of £2m compared to last's year's number of £99m," the company stated.

Investment bank Merrill Lynch repeated its "underperform" recommendation, while Royal Bank of Scotland were more bullish, repeating a "buy" recommendation, saying the overall statement is about as robust as it can be, and Galliford is one of the few homebuilders currently selling homes.

The company does considerable business north of the border where it builds windfarms for ScottishPower among other projects.

Galliford closed the day 3.25p lower at 62p, largely on profit-taking by investors.