Annual Financial Report

RNS Number : 4145D

Galliford Try PLC

26 October 2015

 



GALLIFORD TRY PLC

PUBLICATION OF ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 & NOTICE OF 2015 ANNUAL GENERAL MEETING

Galliford Try plc has today, in accordance with LR 9.6.1 R of the Listing Rules, submitted to the Financial Conduct Authority's National Storage Mechanism copies of the following:

·      The Annual Report and Financial Statements 2015

·      Notice of 2015 Annual General Meeting

·      Form of Proxy for the 2015 Annual General Meeting

The documents will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

The Annual Report and Financial Statements and Notice of Annual General Meeting are also available on the Galliford Try plc website at www.gallifordtry.co.uk/investors

A condensed set of the Group's financial statements and information on important events that have occurred during the financial year and their impact on the financial statements were included in Galliford Try plc's Final Results Announcement on 16 September 2015.  That information together with the information set out below which is extracted from the Annual Report and Financial Statements 2015 constitute the material required by Disclosure and Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.  This announcement is not a substitute for reading the full Annual Report and Financial Statements 2015.  Page and note references in the text below refer to page numbers in the Annual Report and Financial Statements 2015.  To view the results announcement, slides of the results presentation and the results webcast please visit www.gallifordtry.co.uk/investors

Principal risks

Identifying, evaluating and managing our principal risks and uncertainties is integral to the way we do business.

Our policies and procedures enable us to identify, evaluate and manage risk. We maintain risk registers at Group, divisional and business unit level that detail these risks, relate them to our objectives and rate them based on their likelihood and potential impact. This determines how the risk is managed, the responsibility for its management and how it is monitored. The Board assesses the levels of residual risk.

The risk register and associated mitigating actions are regularly reviewed by the Risk Committee we established in the previous year. It is chaired by the Group Finance Director and managed by the Director of Risk & Internal Audit. We undertake an annual review of market developments, Group strategy and projects secured in the context of our risk management processes, to ensure they adapt to changing requirements. This, in co‑ordination with the Board's review of internal controls and their effectiveness, helps to ensure that our management of risk remains up-to-date and relevant.

Key risk areas, implications and mitigating actions

Health, safety, environment and community ·    Maintaining high standards of health and safety, and mitigating negative environmental and community impacts. Implication ·    Failings can cause harm to those on or around our sites and/or have an impact on our reputation, costs and management resource.	Mitigation ·    Implementing our Health, Safety & Sustainability (HS&S) strategy, which is supported by comprehensive policies and frameworks. ·    Demonstrating our commitment to HS&S by having Board level representation via the Chief Operating Officer. ·    Driving the importance of HS&S through our behavioural safety programme and 'back to basics' initiative.
People ·    Developing, attracting and retaining the best people for the business in order to maintain a high-performing, skilled and diverse workforce. Implication ·    Failure to do this could impact our overall leadership of the business and ability to deliver our planned strategy and business growth.	Mitigation ·    Implementing our established HR strategy, based on best practice, Investors in People principles and relevant legislation. ·    Succession planning enables continuity and the ability to identify future leaders. ·    Regularly reviewing remuneration and benefits packages to ensure we remain competitive.
Supply chain ·    A financially stable, high-quality supply chain that allows us to successfully deliver our projects on time and to budget. Implication ·    Exposure to financial, reputational, technical, quality, and health and safety risks in the supply chain, as well as potential supplier insolvency and materials shortage could cause delays and additional costs.	Mitigation ·    Monitoring construction progress against programme in order to replan/reassess resources where applicable. ·    Selecting our supply chain for both materials and people carefully. ·    Continuing to improve our supply chain by integrating their way of working with our internal processes and standards to drive improvement such as BS 11000. ·    Reviewing profit margin and cash forecasting by contract to identify any supply chain issues early.
Macro environment ·    A stable economy has a positive impact on consumer confidence in the housing market. Demand for houses is critically affected by mortgage availability and interest costs. The level of public sector spending governs demand for construction in the important public and regulated sectors. Implication ·    A weakening economy can undermine consumer confidence and hence demand for new houses; this will also be constrained by the threat of interest rate rises. Reduced public spending could impact regulated infrastructure projects and the availability of project finance.	Mitigation ·    Closely monitoring government, industry and economic data on housing prices, sales volumes and construction, together with statistics on mortgage approvals, lending and interest rate expectations. ·    Anticipating market changes and having flexibility to adjust land acquisition plans, development and build programmes, sales releases and purchaser incentives accordingly. ·    Adapting our approach to the sectors and clients where we see the best opportunities. ·    Maintaining a strong balance sheet.
Markets ·    The success of our Housebuilding and Construction businesses relies on a combination of factors. In Housebuilding some of these include the availability and price of land, how long it takes to obtain planning permission and the availability of affordable housing funding. In Construction, some of these include the level of commercial risk we accept in each contract and pricing in relation to this risk as well as having a suitable pipeline of work in place. Implication ·    Our Housebuilding business could be negatively impacted financially by a lack of available land, acquiring land at the wrong price, or underestimating development or project costs. Our delivery could be affected by delays in the planning process or the availability of affordable housing funding. In our Construction business potentially serious financial and allocation issues could result from us taking on too much risk, including credit and counterparty, pricing and technical ability to deliver; failing to secure contracts at a price and on terms that deliver an acceptable return on risk; and lack of a suitable pipeline of opportunities.	Mitigation ·    Maintaining a landbank that balances plots with full planning consent, outline consent and zoned for residential development and strategic land held primarily under options to purchase in the future. ·    Rigorous pre-acquisition site appraisal processes. ·    Robust approach to contract selection and terms, and carrying out further specific risk assessments for major projects. ·    Keeping apprised of market intelligence, monitoring order book and pipeline, and undertaking business planning process forecasts for market trends allowing us to match resources to project workloads.
Corporate ·    Our ability to achieve our 2018 growth strategy is contingent on a number of Group factors. Implication ·    Without access to sufficient financing, the ability to deliver projects on time and to budget, and meet our sustainability targets, as well as being able to maintain a strong brand would be jeopardised, meaning we could be prevented from successfully executing our Company strategy.	Mitigation ·    Funding is provided by equity and bank borrowings; our revolving credit facility was extended to 2020 on improved terms and a new £100 million interest rate hedge was put in place ensuring a stable funding platform and improved visibility for the rest of the decade. ·    Demonstrating our commitment to sustainability by having Board level representation via the Chief Operating Officer. ·    Operating contingency and disaster recovery policies to mitigate any potential financial or reputational damage; these are tested and reviewed on a regular basis.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under company law the directors have prepared the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law, the directors must not approve the financial statements, unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.

In preparing those Financial Statements, the directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgments and accounting estimates that are reasonable and prudent;

·      state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and

·      prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Financial Statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group Financial Statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the directors whose names and functions are listed on pages 38 and 39, confirms that to the best of their knowledge:

·      The Group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group.

·      The Strategic Report contained in pages 1 to 37 includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

For further information contact:

Tim Maw                       Assistant Company Secretary, Galliford Try plc    01895 855001

 

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