TIDMGFRD
RNS Number : 6476K
Galliford Try PLC
11 July 2017
GALLIFORD TRY PLC
TRADING UPDATE
11 JULY 2017
Galliford Try plc, the housebuilding, regeneration and
construction group, today provides the following update on trading
for the year ended 30 June 2017. All figures are as at 30 June
2017, unless otherwise stated, and all comparatives relate to the
prior year equivalent period. The Group expects to announce its
results for the full year on 13 September 2017.
Overview
-- A strong underlying financial and operating performance
across all three businesses for FY 2017, with profits towards the
upper end of the analysts' range (1)
-- Linden Homes and Partnerships & Regeneration expected to
deliver increased revenue and improved operating margins, while
newer contracts in Construction are performing well
-- No movement in the GBP98m non-recurring costs in Construction, as announced on 3 May 2017
-- Modest net cash at 30 June 2017 (2016: net debt GBP9m)
-- Expect to pay dividend in line with previous guidance
-- Well positioned to deliver against 2021 strategic targets
Linden Homes
Linden Homes is expected to report a strong performance for the
full year. Revenue growth has accelerated in the second half,
driven by solid growth in volumes, with total completions
(including units in joint ventures) up 7% to 3,296 units (2,876
units net of our partners' shares) at 30 June 2017 (2016: 3,078 and
2,691 units respectively). Average sales rates in the second half
were strong at 0.68 units per site per week, up from 0.56 in H1
2017, from a reduced average number of outlets for the full year of
77 (2016: 80). The average private sales price was up 6% to
GBP354,000 (2016: GBP335,000). Reflecting the strategy to increase
product standardisation and improve operating efficiencies, the
operating margin has continued to improve.
The business maintains a strong forward order book to start the
next financial year, with sales carried forward of GBP373m at 30
June 2017 (2016: GBP380m). All land plots have been secured for FY
2018, with 83% of plots secured for FY 2019. The landbank stands at
10,650 plots, having decreased from 11,500 plots in FY 2016 in line
with our strategy to hold a shorter landbank, equivalent to 3.5
years. Also in line with our stated plan, we have successfully
increased our strategic land assets.
Partnerships & Regeneration
Performance in Partnerships & Regeneration continues to
improve, with both revenue and margin increased over FY 2016 helped
by growth in higher-margin mixed-tenure projects. The business is
making good progress against its strategy, supported by the recent
acquisition of the mixed-tenure developer, Drew Smith, in
Hampshire, which is expected to accelerate growth across the
southern region. At 30 June 2017, the contracting order book is up
23.5% at GBP1.05bn (2016: GBP0.85bn) and the landbank is 2,700
plots (2016: 2,700).
Construction
The underlying portfolio of newer contracts continues to perform
well. As announced on 3 May 2017, Construction's reported
performance in FY 2017 will be impacted by GBP98m non-recurring
costs following a reappraisal of costs to complete and recoveries,
principally from two large legacy contracts. These also affected
the business's cash position, which decreased to GBP136m at 30 June
2017, from GBP160m in 2016. As outlined previously the business no
longer undertakes these types of fixed-price contracts on large
infrastructure projects. Construction enters the new financial year
with a high quality order book of GBP3.5bn (2016: GBP3.5bn),
predominantly in the public and regulated sectors, which includes
84% of projected revenue for FY 2018 (2016: 82%).
Financial Position
We will report net cash at 30 June 2017 of less than GBP10m
(2016: net debt of GBP9m) and average net debt over the full year
is expected to be lower than previous guidance at below GBP250m.
While the non-recurring costs in Construction have impacted the
Group's cash position, overall Galliford Try maintains a strong
balance sheet, with the debt private placement and facility
extension in FY 2017 providing diversification and flexibility in
the Group's funding sources.
Outlook
The Group's outlook for FY 2018 is unchanged. Linden Homes is
expected to deliver further volume growth and improvement in the
operating margin. Partnerships & Regeneration continues to
enhance its position to benefit from the demand for affordable
housing, while Construction's margin is expected to increase as we
close out legacy positions.
Peter Truscott, Chief Executive, commented:
"Galliford Try made excellent operating progress in the
financial year, with our reorganised management teams focused on
improving operating efficiency across the Group, and driving
revenue growth in Linden Homes and Partnerships. Reflecting this
operational focus and benefiting from robust market conditions over
the last twelve months, we expect to deliver a strong underlying
result for FY 2017 notwithstanding the impact on the Group's
reported financial performance from the non-recurring costs in our
Construction business, as previously announced.
As we enter the new financial year, we are cautious about the
impact of the current political uncertainty following the general
election and the medium-term outlook for the macro economy.
However, all three businesses have clearly defined plans to improve
operating efficiency and grow revenue and margins, providing the
Group with confidence in its ability to deliver a strong
performance even in a period of lower growth in the wider economy.
We enter the financial year with a Group order book of GBP4.9bn,
giving us a solid foundation to deliver growth in FY 2018. Overall,
we remain well positioned to deliver against our medium-term
targets for 60% growth in profit before tax to FY 2021, a five year
CAGR on dividend of at least 5% and a return on net assets in FY
2021 of at least 25%, while rebuilding dividend cover to 2.0x.
Reflecting a strong underlying performance, the strength of our
balance sheet and our confidence in the prospects for each of our
businesses, we expect to pay a final dividend in line with previous
guidance."
Conference Call
A conference call for Analysts and Investors will be held at
08:30am (UK time):
Participant telephone number: +44 (0)20 3139 4830
Participant passcode: 17524923#
For further enquiries:
Galliford Try Peter Truscott, Chief Executive 01895 855001
Graham Prothero, Finance Director
Tulchan Communications James Macey White / Martin Pengelley 020
7353 4200
Notes to Editors
Galliford Try plc is a leading UK housebuilding, regeneration
and construction group. It is listed on the London Stock Exchange
and a member of the FTSE 250. Housebuilding - through our Linden
Homes business - develops private and affordable homes in prime
locations. Galliford Try Partnerships - our regeneration business -
delivers mixed-tenure solutions working with housing association,
local authority and private sector partners. Operating as Galliford
Try and Morrison Construction, our Construction business carries
out building and infrastructure with clients in the public, private
and regulated sectors. At the end of the last financial year to 30
June 2016, the Group generated revenue of GBP2.7 billion.
(1) The range of analysts' forecasts for profit before tax for
the year ending 30 June 2017 is GBP46m to GBP59m based on forecasts
at 1 July 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTLLFVRDEIILID
(END) Dow Jones Newswires
July 11, 2017 02:00 ET (06:00 GMT)
Galliford Try (LSE:GFRD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Galliford Try (LSE:GFRD)
Historical Stock Chart
From Apr 2023 to Apr 2024