Galliford Try has vowed to slim down its contract construction arm after a series of problem contracts forced the builder to slash profit forecasts.

The FTSE 250 firm has begun a review of the division, which builds roads, schools and commercial buildings, and said it plans to focus on less risky and more profitable areas of the market.

Costs from the overhaul, along with new charges against existing and historic contracts, are expected to knock between £30m and £40m off Galliford’s pre-tax profits this year.  

Analysts had previously been expecting profits to come in at about £156m.

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