Final Results
Galliford Try PLC
09 September 2002
GALLIFORD TRY PLC
PRELIMINARY STATEMENT FOR THE YEAR ENDING 30 JUNE 2002
FINANCIAL HIGHLIGHTS
• Turnover up 14% to £649 million (2001: £569 million)
• Profit before tax of £18 million up by 19% (2001 pre exceptional profit:
£15.1 million)
• Earnings per share up 14% to 5.8p (2001: 5.1p)
• Final dividend of 1.0p per share making total up 7% at 1.5p for the year
(2001: 1.4p)
• Borrowings of £12.9 million representing gearing of 24% (2001: £14.1
million, 32%)
• Return on shareholders funds of 34% (2001: 35%)
OPERATIONAL HIGHLIGHTS
• Record performance from housebuilding
• Acquisitions successfully integrated
• Joint Venture to develop Fairfield Hospital, Letchworth
• 3 year joint venture contract from United Utilities
• Strong construction order book at £592 million
Tony Palmer, Chairman of Galliford Try plc, commented:
'I am pleased to report that we have again delivered a strong set of results for
the full year. The performance of our housebuilding business has been
excellent, and we have the scope to drive profit growth through improving
construction margins and further investment in housebuilding. As we continue to
refocus our construction business we expect growth to be more modest in the
current year. We are confident that we will deliver substantial growth going
forward.'
Enquiries to:
David Calverley, Chief Executive: 01895 855219
George Marsh, Deputy Chief Executive: 01455 222722
Frank Nelson, Finance Director: 01895 855226
Ann marie Wilkinson, Beattie Financial: 020 7398 3300
James Chandler, Beattie Financial: 020 7398 3300
www.gallifordtry.co.uk
CHAIRMAN'S STATEMENT
I am pleased to report that we have again delivered strong results for the full
year. Profit before tax of £18 million was up by 19% on last year's
pre-exceptionals profit of £15.1 million and earnings per share rose by 14% to
5.8p. Turnover increased by 14% to £649 million. The directors are
recommending a final dividend of 1.0p per share, making a total of 1.5p for the
year, an increase of 7% over last year. Notwithstanding our increased
investment in housebuilding, our year end gearing stood at 24%.
The performance of our housebuilding business has been excellent, demonstrating
the benefit of our concentration on individually designed developments and a
geographic spread that enables us to take advantage of the strongest areas of
growth across our three regions.
Although we have not achieved the rate of progress originally anticipated in
construction, which has resulted in disappointing profits, we are in the process
of repositioning the business within the specific market sectors, particularly
in infrastructure, communications and public sector works that will provide
sustainable future profits.
Our strategy in construction is to be a market leader in specific sectors,
delivering a complete construction service through a long-term partnership
approach. In housebuilding it is to be a leading regional developer with strong
local brands, specialising in individually designed developments with an
expertise in brownfield and conversion.
CONSTRUCTION
We are making progress in repositioning the business. Our focus on long term
framework agreements in infrastructure and telecommunications together with a
greater emphasis on the health, education and social housing sectors is enabling
us to take advantage of the increased spending in these markets. However we have
experienced longer than expected lead times for some of our larger new contracts
and some contract losses in parts of the business that rely more heavily on
traditional competitive tendering. We have made changes in these businesses to
strengthen their risk management and rebalance their workload away from these
markets but have not yet benefited from these changes. Consequently, operating
profits for the year were £0.4 million on a turnover of £487 million.
Our objective for construction is to provide an acceptable profit commensurate
with the risk taken and generate cash for reinvestment in the business. Our
success in securing partnering contracts and long term agreements has resulted
in 73% of our £592 million order book being secured on criteria other than price
alone, an encouraging improvement, and in line with our plans going forward.
Our infrastructure skills encompass water engineering, highways and railway
projects. Long term framework contracts are providing an increasing proportion
of our work. In February this year we secured a three year contract from United
Utilities in a joint venture with Costain which is expected to provide revenues
of £215 million. We renewed our agreement with British Waterways for a further
six years of maintenance works in their north east region and our Welsh Water
(Dwr Cymru) framework contract resulted in eight projects undertaken during the
year. In rail we were awarded framework agreements by Railtrack for both
building works and structures in the North West and for building in the
Midlands. We are also constructing four depots for M40 Trains.
Our market leading communications business is under contract to all five of the
mobile phone licence holders. It completed 1,000 cell sites in the year and
launched a new range of temporary mobile phone installations which can be
erected and commissioned in less than 24 hours. It has also expanded its design
and rigging service to offer a complete service.
We are well placed to satisfy the demand for affordable housing, and to take
advantage from the increased investment in both refurbishment and new build,
particularly around London. Working on over 2,200 units during the year, we
have partnership agreements with a number of housing associations.
Public expenditure on education and health continues to grow and we worked on 40
education projects during the year, including 10 schools in Birmingham
constructed and now being operated under our PFI contract. We are pursuing a
limited number of new PFI opportunities, managing our overall commitment by
focusing our resources on smaller projects with satisfactory risk and reward
profiles.
Despite a degree of softening in the commercial and industrial markets, we
maintain a strong presence based on long term relationships with many of our
clients, exemplified by the securing of a new partnership agreement for a
further five years work with the All England Lawn Tennis Club at Wimbledon.
We have carried out the remediation works on the high specification floor at the
contract at Daventry for which we provided last year and are progressing the
contractual position.
HOUSEBUILDING
Our geographic spread and concentration on individually designed developments in
good locations enabled us to take full advantage of the buoyancy in the
housebuilding market during the year. Operating profits were up 76% to £22.5
million achieved on a turnover of £162 million, a 46% increase on last year.
Housing completions were up 15% at 899 for the full year with an increase in the
average selling price of 25% to £177,000 primarily resulting from a higher
proportion of middle market homes in the eastern counties and the South West.
Try Homes' expertise in urban developments and conversions in the south east
resulted in 100% of its production coming from brownfield sites. Our
concentration on the mainstream market in outer London and the southern counties
has insulated us from the more volatile central London market.
In the South West, the timely acquisitions of Gerald Wood Homes last year and
Exeter based Knapp Homes in July 2001 contributed to Midas Homes achieving a
record year for growth and profits. The integration of these businesses was
successfully completed in the year, enabling us to provide the range of homes
required to meet the expanding demand in the region, and to benefit from the
resultant sales price increases.
The repositioning of Stamford Homes in the eastern counties to carry out a
greater proportion of its developments in urban locations and in the more
affluent southern sector of its region is producing significantly better
margins. The recently announced joint venture to develop and project manage 44
acres at Fairfield Hospital near Letchworth is an example of the specialist
skills now being developed in the region, which will also provide Stamford with
a total of 106 homes to develop.
In line with our strategy for growth we have continued to replace and increase
our land bank. During the year we purchased 1145 plots at a cost of £56
million, and now have a total of 2252 plots compared to 2044 a year ago,
representing 21/2 years supply at current production levels. In addition, we
have 600 acres of strategic land holdings under option. As we enter the new
financial year our order book is up 19% at 234 units.
OUTLOOK
The economic forecasts for the UK construction industry remain on the whole,
optimistic, and we are well positioned, particularly in the infrastructure and
public sector markets, to benefit from rising activity in these areas. We
anticipate an easing in the investment rate of some of our private commercial
clients, in light of the more cautious forecasts for this sector. Our
construction order book of £592 million and the record level secured by value
criteria is encouraging.
It is realistic to assume that the current rate of house price growth will slow
down, but in all our regions, overall affordability remains positive with
interest rates continuing at low levels. Underlying demand and the continued
planning constraints on the supply of land are likely to support a more
consistent rate of growth, which is particularly encouraging for the more
individually designed developments in which we specialise. We take confidence
from the level of our sales in hand as we enter the new financial year.
We have the scope to drive profit growth through improving construction margins
and further investment in housebuilding. As we continue to refocus construction
we expect growth to be more modest in the current year. We are confident that
we will deliver substantial growth going forward.
Tony Palmer
Chairman
9th September 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30 June 2002
2002 2001
£000 £000
Turnover
Continuing operations 636,084 570,673
Acquisitions 13,699 -
Total continuing operations 649,783 570,673
Less share of joint ventures' and associates turnover (881) (2,115)
Group turnover 648,902 568,558
Cost of sales (598,697) (524,400)
Exceptional cost of sales - (6,500)
(598,697) (530,900)
Gross profit 50,205 37,658
Net operating expenditure - administrative expenses (30,458) (28,185)
Exceptional administrative expenses - (1,996)
(30,458) (30,181)
Group operating profit
Continuing operations 16,668 7,477
Acquisitions 3,079 -
19,747 7,477
Shares of (losses)/profits in joint ventures (217) 218
Share of profits in associates - 228
Exceptional merger expenses - (1,716)
Profit on sale of investment in joint venture 483 -
Income from other fixed asset investments 155 -
Profit on ordinary activities before interest 20,168 6,207
Net interest (payable)/receivable
Group (2,078) (1,187)
Joint ventures (75) 12
Associates - (118)
(2,153) (1,293)
Profit on ordinary activities before tax 18,015 4,914
Tax (5,728) (1,781)
Profit on ordinary activities after tax 12,287 3,133
Dividends (3,292) (3,026)
Retained profit for the year 8,995 107
Basic earnings per ordinary share
Before exceptional items 5.8p 5.1p
After exceptional items 5.8p 1.5p
Diluted earnings per share
Before exceptional items 5.6p 5.0p
After exceptional items 5.6p 1.4p
There were no gains or losses in the period other than those shown in the profit
and loss account above.
CONSOLIDATED BALANCE SHEET
At 30 June 2002
2002 2001
£000 £000
Fixed assets
Intangible assets: goodwill 423 698
Tangible assets 12,087 12,032
Investments in joint ventures:
Share of gross assets 660 2,020
Share of gross liabilities (442) (1,670)
218 350
Investments in associates 81 81
Other investments 1,737 990
14,546 14,151
Current assets
Stock 358 337
Developments 128,475 113,300
Debtors 111,316 102,361
Cash at bank & in hand 1,757 22,371
241,906 238,369
Creditors: amounts falling due within one year:
Bank loans and overdrafts (9,556) (33,994)
Other amounts falling due within one year (174,368) (162,346)
Net current assets 57,982 42,029
Total assets less current liabilities 72,528 56,180
Creditors: amounts falling due after more than one year (15,902) (10,555)
Provisions for liabilities and charges (2,905) (1,586)
53,721 44,039
Capital and reserves
Called up share capital 10,999 10,845
Share premium account 1,578 1,045
Merger reserve 4,687 4,687
Revaluation reserve 1,915 1,919
Other reserves - 35
Profit and loss account 34,542 25,508
Equity shareholders' funds 53,721 44,039
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2002
2002 2001
£000 £000
Net cash inflow/(outflow) from operating activities 16,351 (7,761)
Dividends from joint ventures - 100
Returns on investments and servicing of finance
Interest received 292 195
Interest paid (1,889) (1,417)
Loan note interest paid (207) (49)
Interest element of finance lease rentals (5) (6)
Net cash outflow from returns on investments and servicing of (1,809) (1,277)
finance
Tax paid (3,446) (2,880)
Capital expenditure and financial investment:
Purchase of tangible fixed assets (1,597) (2,777)
Sale of tangible fixed assets 105 97
Net cash outflow for capital expenditure and financial (1,492) (2,680)
investment
Acquisitions and disposals:
Increase in investment in joint venture (60) (95)
Purchase of own shares - (445)
Increase in other investments (872) (298)
Purchase of subsidiary undertakings (400) (216)
Net cash acquired with subsidiary undertakings 433 14
Realisation of investment in joint ventures 66 152
Exceptional merger expenses - (1,716)
Net cash outflow for acquisitions and disposals (833) (2,604)
Equity dividends paid (3,044) (2,269)
Net cash inflow/(outflow) before use of liquid resources and 5,727 (19,371)
financing
Management of liquid resources:
Decrease in short term deposits with banks - 1,222
Financing:
Issue of ordinary share capital 687 438
Capital element of finance lease rental payments (1) (60)
(Decrease)/increase in bank loans (35,424) 30,306
Issue of loan notes 159 -
Repayment of loan notes (100) (34)
(34,679) 30,650
(Decrease)/increase in cash in the year (28,952) 12,501
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the year (28,952) 12,501
Decrease/(increase) in debt and lease financing 35,366 (30,408)
Borrowings acquired with subsidiary (1,431) (1,474)
Issued in respect of acquisition (3,820) -
Reduction in short term deposits with banks - (1,222)
Change in net cash/(debt) in the year 1,163 (20,603)
Net (debt)/cash at start of year (14,084) 6,519
Net debt at end of year (12,921) (14,084)
SEGMENTAL ANALYSIS
Turnover Turnover
including including
associates and Associates and associates and Associates and
joint ventures joint ventures joint ventures joint ventures
turnover Group turnover turnover Group Turnover
2002 2002 2002 2001 2001 2001
£000 £000 £000 £000 £000 £000
Construction 487,296 881 486,415 457,299 854 456,445
Housebuilding 161,959 - 161,959 111,380 - 111,380
Group 528 - 528 1,994 1,261 733
Sub-total 649,783 881 648,902 570,673 2,115 568,558
Acquisitions in the year account for turnover of £13,699,000 in housebuilding.
Construction includes joint ventures' turnover of £881,000 (2001: £854,000).
The associates' turnover of £Nil (2001: £1,261,000) is included in group. All
turnover arises in the United Kingdom.
Profit/(loss) before Profit/(loss) before Net assets/(liabilities)
exceptional items and
interest interest
2002 2001 2002 2001 2002 2001
£000 £000 £000 £000 £000 £000
Construction 411 6,244 411 (452) (6,428) (13,683)
Housebuilding 22,487 12,810 22,487 12,810 74,045 68,751
Group (2,730) (2,635) (2,730) (6,151) (975) 3,055
Sub-total 20,168 16,419 20,168 6,207 66,642 58,123
Net (borrowings)/ (12,921) (14,084)
cash
53,721 44,039
Acquisitions in the year account for profit before interest of £3,079,000 in
housebuilding. The share of (losses)/profits in the joint ventures relating to
construction of (£217,000) (2001: £201,000) and housebuilding of £Nil (2001:
£17,000) is included in profit before interest.
The share of net assets/(liabilities) relating to the joint ventures included in
construction and housebuilding is £199,000 (2001: £331,000) and £19,000 (2001:
£19,000) respectively.
The share of profits before interest of £Nil (2001: £228,000) and of net assets
of £81,000 (2001: £81,000) relating to the associates are included in group.
NOTES TO THE PRELIMINARY STATEMENT
1. Basis of Preparation
This preliminary statement has been agreed with the Company's auditors, and does
not constitute statutory accounts for the Company. It has been extracted from
the annual accounts of Galliford Try plc, which have not yet been filed with the
Registrar of Companies. The financial information for the year ended 30 June
2001 has been extracted from the statutory accounts for that year which have
been filed with the Registrar of Companies.
2. Note to the Cashflow Statement
Analysis of changes in net debt
Borrowings Issued in
respect of
At 1 July Cash acquired acquisition At 30 June
2001 flow with subsidiary £000 2002
£000 £000 £000 £000
Cash at bank in hand 22,371 (20,614) - - 1,757
Overdrafts - (8,338) - - (8,338)
22,371 (28,952) - - (6,581)
Loan notes (1,214) (59) - (3,820) (5,093)
Bank loans (35,211) 35,424 (1,431) - (1,218)
(14,054) 6,413 (1,431) (3,820) (12,892)
Finance lease (30) 1 - - (29)
obligations
Net cash/(debt) (14,084) 6,414 (1,431) (3,820) (12,921)
3. Final Dividend
Subject to approval at the Annual General Meeting to be held on Friday 1
November 2002, the final dividend of 1.0p per share will be paid on 6 November
2002 to shareholders on the register on 11 October 2002.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
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