Galliford Try : Fully Underwritten £150 million Capital Raising

14 FEBRUARY 2018

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

Galliford Try plc

Fully Underwritten £150 million Capital Raising

Galliford Try plc ('Galliford Try' or 'the Group') today announces that it proposes to raise £150m of new equity capital (the 'Capital Raising') from its shareholders in the coming weeks and is also providing an update on Galliford Try's dividend policy.

Galliford Try today has separately announced its Half Year Results for the six months to 31 December 2017.

Update on trading - strong financial performance, in line with expectations

Galliford Try's Half Year Results show the strong financial and operational performance across all three businesses with good progress being made against the Group's growth plan to 2021. Highlights include:

· Linden Homes delivered an excellent performance in the first half: strong volume growth with revenue up 7%, operating margin (excluding land sales) improved to 18.5% (H1 2017: 16.3%), reflecting the increased focus on standardisation and operating efficiencies;

· Partnerships & Regeneration has seen a significant revenue increase of 55% over H1 2017, excellent operating margin progress to 4.8% (H1 2017: 3.4%), and continuing strengthening of the order book, up 41% to £1.3bn. Further revenue growth and margin gains are expected, driven by continuing strong demand and geographical expansion; and

· Construction's underlying business continues to improve following the changes made to its tendering processes. Pre-exceptional operating margin increased to 0.9% (H1 2017: 0.4%) and a high-quality order book has been maintained at £3.5bn (H1 2017: £3.4bn). There has been an encouraging performance on more recently secured contracts, which supports Construction's strategic objectives.

The Government's stated commitment to the housing market, including Help-to-Buy and the relaxation of stamp duty for first time buyers, is welcome and, along with good mortgage availability and low interest rates, benefits both Galliford Try's private and affordable homes businesses. Galliford Try's Construction business, operating predominantly in the public and regulated sectors, continues to benefit from a strong order book, with an encouraging pipeline of opportunities from the current and planned investment in the nation's infrastructure.

Financial position

Galliford Try continues to operate well within its financial covenants.

However, the compulsory liquidation of Carillion plc ('Carillion') has placed additional financial obligations on the Group arising principally from the joint venture with Carillion and Balfour Beatty plc on the Aberdeen Western Peripheral Route contract ('AWPR').

The over-run costs on AWPR, compounded by the compulsory liquidation of Carillion have increased the Group's total cash commitments on the project by in excess of £150m.

The Group continues to make good progress in resolving both AWPR, the construction of which is expected to complete during summer 2018, and other legacy contracts. The Group no longer undertakes fixed price, all risk major projects of this nature, and has improved its tendering and project selection processes.

The Group has sufficient financial resources to meet its obligations, including the estimated impact of Carillion's liquidation. However, this would involve diverting capital away from the Linden Homes and Partnerships & Regeneration businesses, thereby reducing their ability to capitalise on the material growth opportunities these businesses would otherwise be well positioned to exploit.

Capital Raising

Galliford Try therefore intends to raise £150m of new equity capital in the coming weeks to strengthen further the Group's balance sheet and ensure that the Group's businesses can continue to pursue their respective growth opportunities that were set out in the 'Strategy to 2021' announced in February 2017 (the '2021 Strategy').

The board of Galliford Try (the 'Board') considers that a strengthened financial position for Galliford Try would also bring the following additional benefits, each of which would support the 2021 Strategy:

· Ensures the Group has access to the appropriate capital to maintain its strong growth trajectory; and

· Demonstrate the Group's continued and enhanced financial strength and stability to Galliford Try's shareholders, customers, suppliers and other stakeholders and reaffirm the Group's capacity to act as a leading partner on significant projects.

The Group has £550m of debt facilities, comprised of a £450m revolving credit facility which matures in 2022 of which £100m was drawn as at 31 December 2017 and £100m of private placement notes due 2027.

The Group will continue with its current gearing policy of year end net debt to net assets of no greater than 30%.

The Group's defined benefit pension obligations are well provided, with a fair value of plan assets as at 31 December 2017 of £248.0m and the present value of obligations at £250.7m giving a balance sheet liability of £2.7m.

The Capital Raising has been fully underwritten by HSBC and Peel Hunt on a standby basis.

Rothschild is acting as financial adviser to Galliford Try on the Capital Raising.

Dividend policy

The Board understands the importance of optimising value for shareholders and believes in balancing returns to shareholders with investment in the business to support future growth. To this end the Board has decided to bring forward the planned increase in dividend cover to 2.0x pre-exceptional earnings per share which will be effective for the current financial year ending 30 June 2018.

Reflecting this, and the Group's strong underlying performance during the half year to 31 December 2017, the Board has declared an interim dividend of 28p per share (H1 2017: 32p) which will be paid on 6 April 2018 to shareholders on the register at close of business on 16 March 2018.

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This announcement contains inside information for the purposes of article 7 of EU Regulation 596/2014. The person responsible for making this announcement on behalf of Galliford Try is Kevin Corbett, General Counsel and Company Secretary.

Analyst conference call:

Peter Truscott, Chief Executive and Graham Prothero, Finance Director will host a short conference call for analysts on the Capital Raising at 7.15 a.m. today. The telephone number for this conference call is:

United Kingdom Toll-Free: 08003589473 PIN: 78010788#

United Kingdom Toll: +44 3333000804 PIN: 78010788#

http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf

Analysts and Investors presentation:

Galliford Try will hold its half year results presentation for analysts and institutional investors at 09:30 a.m. today at the London Stock Exchange, 10 Paternoster Row, London, EC4M 7LS. An audio webcast will be available at:http://webcast.openbriefing.com/gallifordtry_hyr_14022018/with recording available later.

For further enquiries please contact:

Galliford Try 01895 855 001

Peter Truscott, Chief Executive

Graham Prothero, Finance Director

Rothschild (Financial Adviser to Galliford Try) 020 7280 5000

John Deans

Alex Midgen

Peter Nicklin

Peter Everest

HSBC Bank plc (Joint Corporate Broker and Joint Global Coordinator) 020 7991 8888

Mark Dickenson

Richard Fagan

Simon Cloke

Keith Welch

Peel Hunt LLP (Joint Corporate Broker and Joint Global Coordinator) 020 7418 8900

Charles Batten

Edward Knight

Harry Nicholas

Max Irwin

Tulchan Communications (PR Adviser to Galliford Try) 020 7353 4200

James Macey White

Martin Pengelley

Elizabeth Snow

Notes to editors

Galliford Try is listed on the London Stock Exchange and is a member of the FTSE 250. Housebuilding - through the Linden Homes business - develops private and affordable homes in prime locations. Galliford Try Partnerships - the regeneration business - delivers mixed-tenure solutions working with housing association, local authority and private sector partners. Operating as Galliford Try and Morrison Construction, the Construction business carries out building and infrastructure projects with clients in the public, private and regulated sectors. At the end of the last financial year to 30 June 2017, the Group generated revenue of £2.8bn.

Cautionary statements

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The information in this announcement is subject to change. Nothing in this announcement should be interpreted as a term or condition of the Capital Raising.

This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as such as 'target', 'believe', 'expect', 'aim', 'intend', 'may', 'anticipate', 'estimate', 'plan', 'project', 'will', 'can have', 'likely', 'should', 'would', 'could' and any other words and terms of similar meaning or the negative thereof. Undue reliance should not be placed on any such statements because they speak only as at the date of this announcement and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Galliford Try's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are: increased competition; the loss of or damage to one or more key customer relationships; changes in the economies, political situations and markets in which Galliford Try operates; currency fluctuations; changes in interest and tax rates; changes in laws, regulations or regulatory policies; the failure to retain key management; or the key timing and success of future opportunities or major investment projects.

Galliford Try undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

N M Rothschild & Sons Limited ('Rothschild'), which is authorised and regulated by the Financial Conduct Authority, in the United Kingdom; HSBC Bank plc ('HSBC'), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom; Peel Hunt LLP ('Peel Hunt') which is authorised and regulated by the Financial Conduct Authority in the United Kingdom; and each of Rothschild's, HSBC's and Peel Hunt's respective directors, officers, employees, agents, affiliates, advisors and agents, are acting for Galliford Try and no one else in connection with the Capital Raising referred to in this announcement or any other transaction(s), arrangement(s) or matter(s) referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client and will not be responsible to anyone other than Galliford Try for providing the protections afforded to their respective clients or for providing advice in connection with the Capital Raising referred to in this announcement or any other transaction(s), arrangement(s) or matter(s) referred to in this announcement.

This announcement has been issued by Galliford Try and is the sole responsibility of Galliford Try. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Rothschild, HSBC or Peel Hunt, or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Important notice

This announcement and the information contained herein do not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity.

This announcement and the information contained herein do not constitute an offer of securities in the United States. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933 (the 'Securities Act'), and may not be offered or sold in the United States absent registration under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, such registration requirements. There will be no public offering of any securities in the United States.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

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