Galliford Try : Annual Results statement for the year ended 30 June

Galliford Try plc Annual Results statement for the year ended 30 June 2017

Wednesday, 13 September 2017 @ 07:00

GALLIFORD TRY PLC - ANNUAL RESULTS STATEMENT FOR THE YEAR ENDED 30 JUNE 2017

STRONG UNDERLYING PERFORMANCE

Highlights

Group

• Strong underlying performance across all three businesses
• Profit impact of the one-off charge of £98.3 million announced in May unchanged; a charge of £87.9 million in respect of two infrastructure joint ventures has been classified as exceptional
• 17% increase in full year dividend payment to 96.0 pence per share
• Net cash of £7.2 million at 30 June 2017 (2016: net debt £8.7 million)
• Pre-exceptional return on net assets improved to 27.5% from 26.9%
• Good progress against strategy to 2021, as set out in February 2017

Linden Homes

• Further progress on process efficiency and standard layouts, contributing to improved operating margin of 18.2% (2016: 17.5%) and operating profit up 16% to £170.3 million (2016: £147.2)
• 3,296 completions (2016: 3,078) producing revenue of £937 million (2016: £841 million), up 11%
• Sales per outlet per week stable at 0.62 (2016: 0.62) with sales reserved, contracted or completed of £545 million7 (2016: £510 million)
• Landbank of 11,250 plots7,8 (2016: 11,700), in line with strategy of maintaining around 3.5 years' supply

Partnerships & Regeneration

• Mixed-tenure revenue increased by 23% to £82 million, from 594 completions6 (2016: £67 million and 526 completions respectively)
• Contracting revenue of £248 million (2016: £234 million)
• Margin improved to 4.5% (2016: 3.9%) and operating profit up 27% to £14.9 million (2016: £11.7 million)
• Contracting order book increased significantly to £1,050 million7 (2016: £865 million) and mixed-tenure sales reserved, contracted or completed of £93 million7 (2016: £73 million)
• Landbank stable at 2,700 plots7 (2016: 2,800)
• Further progress on regional expansion, including the acquisition of mixed-tenure developer, Drew Smith Group, in Hampshire, which is accelerating growth across the southern region

Construction

• Order book of £3.6 billion7 (2016: £3.5 billion)
• Pre-exceptional Construction margin of 0.0%, on revenue of £1,527 million (2016: 1.1% and £1,503 million respectively)
• Cash of £137 million (2016: £161 million), with the reduction primarily reflecting cash funding of two infrastructure joint ventures
• Good progress in resolving legacy contracts, whilst some risks remain, and continuing benefit to underlying business from improved risk management and project selection processes

Peter Truscott, Chief Executive, commented:

'I am pleased to announce strong operating progress in the financial year, which has been supported by robust market conditions. Our reorganised management teams in Linden Homes and Partnerships & Regeneration have achieved excellent revenue and margin growth and continue to enhance their operating effectiveness as described in our strategy presentation in February. While the one-off costs relating to legacy contracts in Construction have impacted the reported financial performance, we remain confident in the prospects for the business, with the underlying portfolio of newer contracts performing well, and simplified and strengthened processes proving effective. Reflecting our strong underlying performance we are proposing an increase in our full year dividend of 17% to 96.0 pence per share.

Entering the new financial year, we remain cautious about the impact of the current political uncertainty and the medium-term outlook for the macro economy. However, all three businesses have clearly defined plans as part of our 2021 strategy, providing the Group with confidence in its ability to deliver a strong performance even in a period of lower growth in the wider economy. Our strong Group order book and disciplined approach to land acquisition and contract selection provide us with solid foundations to deliver further growth in FY 2018.'

This announcement contains inside information.

Enquiries:

'Revenue' includes share of joint ventures' revenue of £158.1 million (2016: £175.5 million). 'Group revenue' where stated excludes
share of joint ventures.

Pre-exceptional measures exclude exceptional costs as described in note 3. All future references to pre-exceptional data or ratios are
consistent with this definition.

Exceptional costs in 2017 were £88.9 million. There were no exceptional costs in 2016.

Group return on net assets represents profit before tax, finance costs and amortisation divided by average net assets.

Pre-exceptional Group return on net assets represents pre-exceptional profit before tax, finance costs and amortisation divided by average pre-exceptional net assets.

Completions net of joint venture partner share were 2,876 (2016: 2,691) for Linden Homes and 444 (2016: 394) for Partnerships and Regeneration.

As at 11 September 2017. All future references to this data is for the same period.

Linden Homes landbank includes 2,737 plots (2016: 2,449) representing Linden Homes share of plots held in joint ventures.

Galliford Try will hold its results presentation at 09:30 am on Wednesday 13 September 2017 at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS. A live audio webcast will be available at http://webcast.openbriefing.com/gallifordtry. Recorded interviews with Peter Truscott and Graham Prothero, regarding the full year results will be available on the Group's website: www.gallifordtry.co.uk from Wednesday 13 September 2017.

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