Final Results
Galliford Try PLC
07 September 2006
GALLIFORD TRY PLC
PRELIMINARY STATEMENT FOR THE YEAR ENDED 30 JUNE 2006
HIGHLIGHTS
2006 2005 Increase
£m £m
Revenue 851 718 + 19%
Profit before tax
- Pre exceptional* 32.5 27.4 + 19%
- Post exceptional 34.5 27.4 + 26%
Earnings per share pence pence
- Pre exceptional* 9.7 8.6 + 13%
- Post exceptional 10.8 8.6 + 26%
Dividend per share 2.5 2.1 + 19%
• Construction
- Profit from operations* at a record £13.2 million, representing margin
of 2.1%
- Forward order book £2.3bn, over 90% on non price competitive basis
- Strong cash flow
• Housebuilding
- Profit from operations* at record £32.0 million, representing margin
of 14.3%
- Current sales in hand up 22% on a year ago at £122m
- Landbank up 58% at record 4,115 units
• Net cash at the year end of £16m
• Profit from operations* (excluding acquisitions) up 14% to £35.6m
• Acquisitions of Morrison Construction and Chartdale Homes performing
well.
*The net exceptional gain of £2 million (2005: nil) arises from the profit on
the sale and leaseback of Group premises net of restructuring costs. Profit from
operations is stated before finance costs, exceptional items, amortisation and
share of joint venture interest and tax.
Commenting today, Greg Fitzgerald, Chief Executive, said:
'We have had an excellent year with record financial results and transformed the
business with two key acquisitions.
Our finances are very strong. Acquiring Morrison and Chartdale has demonstrated
our ability to supplement organic growth with carefully positioned acquisitions
that fit our strategy. We have proved the success of our business model in
delivering profitable growth and we look forward to reporting further progress
in the coming year.'
For further enquiries please contact:
Greg Fitzgerald,
Chief Executive Galliford Try plc 01895 855219
Frank Nelson,
Finance Director Galliford Try plc 01895 855226
Ann marie Wilkinson / Geoff Callow
Bell Pottinger Corporate & Financial 020 7861 3232
CHIEF EXECUTIVE'S COMMENTARY
We have had an excellent year with record financial results and transformed the
business with two key acquisitions.
FINANCIAL REVIEW
Profit before tax increased 26% to £34.5 million (2005: £27.4 million). Revenue
increased 19% to £851 million. The results include four and a half month's
trading from Chartdale Homes, acquired on deferred payment terms for £67 million
in February, and three month's results from the Morrison Construction
businesses, acquired on a debt and cash free basis for £42 million at the end of
March. Profit from operations excluding acquisitions rose 14% to £35.6 million,
with £2.6 million from acquired businesses resulting in a total of £38.2
million. The acquisitions delivered their projected profits to the year end,
their integration into Galliford Try is on track and their prospects for the
future are encouraging. Total Group revenue is therefore anticipated to
significantly exceed £1 billion in the first full financial year following the
acquisitions.
Construction profit from operations rose 45% to £13.2 million on revenue,
including joint ventures, up 16% to £629 million, representing a margin of 2.1%.
Housebuilding has performed well in a market that returned to satisfactory
levels in the second half of the year and profit from operations increased by
15% to a record £32.0 million on revenue, including joint ventures, of £224
million. The costs of our PPP Investments business exceeded income in the year
as we continue to build up our portfolio resulting in a net loss from operations
of £1.6 million. Group profit before tax is stated after a net exceptional gain
of £2.0 million which includes £3.9 million profit on the sale and leaseback of
two of the Group's office premises net of £1.9 million restructuring costs
following the Morrison acquisition.
Our rigorous approach to cash management continues. Construction generated
strong positive cash flows throughout the period and we have closely managed the
capital employed in housebuilding. Net interest reported of £5.0 million
includes £1.9 million of net bank interest (2005: £1.6 million) and at 30 June
2006 we had net cash of £16 million compared to net debt of £12.4 million last
year. Notable cash movements in the year were the payment of the first £25
million of the Chartdale Homes purchase price, £40 million on the acquisition of
Morrison Construction, sale and leaseback receipts of £11.2 million and receipt
of the proceeds of the placing and open offer in March amounting to a net £48.6
million. The tax charge for the year was 26%, reflecting the availability of
capital losses to offset the sale and leaseback profit.
The results for 2006 are being reported for the first time on an IFRS basis. The
return on average shareholders funds in the year of £71.6 million was 48%.
Shareholders funds at 30 June 2006 were £120.1 million (2005: £53.7 million). At
30 June 2006 the final salary pension scheme deficit was £33 million net of
deferred tax. In light of the continuing uncertainties of running final salary
pension schemes, the Company has commenced the process of consulting with
members to close the scheme to future service accrual and provide defined
contribution arrangements. The Company also increased its regular cash
contribution towards the deficit from £3.2 million per annum to £6.2 million in
the year, and is in discussions with the Trustees over funding the remainder of
the deficit.
DIVIDEND
The directors have taken into account current performance and their confidence
in the future prospects for the Group in determining an appropriate level of
dividend. Accordingly, the directors are recommending a final dividend of 1.8p
per share, an increase of 20% on 2005, resulting in a total dividend up 19% to
2.5p. The directors remain committed to a progressive dividend policy which
takes into account earnings growth as well as the need for continued investment
in the business.
OPERATING REVIEW
Construction
Construction profit from operations reached a record level of £13.2 million on
revenue, including joint ventures, of £629 million during the year. The results
include three months trading from Morrison Construction, which delivered its
planned profits for the period and exceeded our targets for securing new work.
The integration of Morrison is proceeding well. We have rationalised the
structure and office network across the country and are confident of exceeding
the anticipated savings to our cost base. Since the start of our new financial
year our construction activities have been operating as two divisions, Building
and Infrastructure, targeting clearly defined market sectors with the objective
of building on our significant presence in each of them. Our overall
construction order book totals £2.3 billion of which 90% is in the public and
regulated sector and over 90% has been secured on criteria other than on a
purely price competitive basis.
Building - Our building division has a good spread of work across its markets in
both private and public sectors. The acquisition of Morrison has given us a
significant presence in the Scottish market, particularly north of the central
belt. The integration of Morrison's English and Welsh operations into the well
established Galliford Try business enables us to offer clients a comprehensive
service across the country in our selected sectors.
Education is a key market for the business. The securing of the 41 school £192
million Northamptonshire Schools PFI project and the 11 school £134 million
Highland Schools PFI project during the year provides work over a three year
period to add to our existing portfolio for universities, schools and colleges.
Since the year end we have also been awarded £51 million of work for two new
academies in London.
Other major public sector markets are in healthcare and prisons. We already
participate in four LIFT frameworks for primary care health authorities and are
now securing projects in subsequent tranches to the initial workload. We are
also at preferred bidder stage for a further LIFT for the South East Essex
Primary Care Trust. We carry out a range of projects for the Home Office under
framework agreements for its prison programme, an area where expenditure is
likely to increase.
We are putting additional investment into our affordable housing business to
generate more development led opportunities with our well established housing
association partners.
The commercial market is more buoyant and we have a number of encouraging
opportunities, particularly in London, where we have recently commenced a £28
million urban regeneration project for the Igloo regeneration fund, at
Bermondsey. We continue to carry out a significant amount of work for the
Ministry of Defence in upgrading living accommodation across the country and are
carrying out a substantial redevelopment for Defence Housing Estates in
Portsmouth.
At the end of August the building division's forward order book stood at £1.14
billion of which 90% has been secured on criteria other than on pure price
competition and over 80% is in the public and regulated sectors.
Infrastructure - The infrastructure division focuses on water, highways, rail,
remediation and ground engineering, renewable energy and telecommunications.
Over 90% of its workload is in frameworks and it has long established
relationships with clients such as the Highways Agency, Scottish Power and
National Grid.
Following the Morrison acquisition, Galliford Try is one of the leading
contractors to the water industry, operating through framework agreements which
provide visibility to future workload, resulting in more predictable profits and
controlled construction risk. We work for most of the UK's water companies;
Southern, Thames, Anglian, United Utilities, Welsh and Yorkshire as well as
Scottish, for whom we have been awarded additional framework projects that will
take our revenue in water to £180 million per annum over the next three years.
Our highways business carries out road projects for the Scottish Executive and
Highways Agency as well as maintenance services, primarily provided to local
authorities. We are shortly to start a £20 million project on the A595 under the
'early contractor involvement' form of contract that suits our collaborative
approach to major construction projects and have a further £100 million of ECI
work in our order book including a £45 million project for remodelling the
intersection at junction 15 of the M40.
Galliford Try is also a leading provider of civil engineering and building
services for the rail sector. We carry out the reconstruction of rail
infrastructure, including bridgeworks, tunnels and viaducts as well as the
refurbishment and new build of stations and rail depots let under a mixture of
framework and individual projects.
We have a well established track record on ground remediation with over 180
sites completed including a series of projects under a long term framework for
the National Grid. The award of the major land remediation contract for the
northern section of Olympic Park in east London, let in a framework agreement
under which we expect to provide work until 2010, demonstrates our success in
developing our presence in a growth market.
We are an established service provider to the renewable energy sector and our
portfolio of windfarm developments for clients such as Scottish Power and Fred
Olsen Renewables is enabling us to take advantage of the good opportunities we
have in this expanding market. Our telecommunications infrastructure business
expanded the range of its activities during the year by acquiring Pentland to
offer a fully integrated service that includes site acquisition.
The forward order book for the infrastructure division currently stands at £1.15
billion of which 90% has been secured on criteria other than on pure price
competition and over 90% is in the public and regulated sectors.
PPP Investments
PPP Investments role is to develop and take equity participation in public /
private partnership arrangements for public sector work, with the objective of
providing negotiated work for our construction activities.
During the year financial close was achieved on two of the largest education PFI
projects in the UK for Northamptonshire County Council and for the Highland
Council, securing £326 million of construction work. We have recently been
appointed preferred bidder on a further LIFT for the South East Essex Primary
Care Trust which has an initial value of £11 million with the potential for a
total of £100 million of work over a number of future tranches.
The integration of the Morrison PFI team into Galliford Try Investments has been
completed, and the Company has now acquired the PFI equity interests from AWG
Group in Highland Schools and Defence Housing Estates Portsmouth following
receipt of the necessary consents. Our strategy is to build up our PFI portfolio
for the future and there were no sales of equity during the year. The division
incurred a net loss from operations of £1.6 million compared to a £1.2 million
loss from operations last year.
Housebuilding
Galliford Try's regional housebuilding businesses in the south west, eastern
counties and the south east of England had a record year for units sold, revenue
and profit.
During the year we completed 1,054 homes compared to 853 in 2005. Our average
selling price rose slightly from £208,000 to £212,000, maintaining our presence
in the mainstream market. Our record profit from operations of £32 million,
representing a margin of 14.3% on revenue, including joint ventures, of £224
million, was achieved in a market that was challenging during the first half of
our financial year, picking up to an acceptable level during the second half.
Our progress was helped by the differentiation that our business model gives us,
with its focus on individually designed developments with a particular strength
in conversions and brownfield developments. We continue to avoid high rise
apartment developments and do not depend on major consortium sites, giving us a
competitive advantage in the market place.
Our business in the eastern counties was significantly boosted during February
with the acquisition of Chartdale Homes. Acquired for a total consideration of
£67 million spread over a two year period, the acquisition added 1,350 plots to
our landbank and extended our geographical coverage throughout the whole of
Lincolnshire. Sales since acquisition have met our expectations, we have secured
the planning consents that were outstanding at the time of acquisition and are
encouraged by the new opportunities that our critical mass in the eastern
counties is now bringing us.
Our track record in brownfield land development, and our relationships with
housing associations and regeneration bodies is increasing the number and size
of schemes we can undertake. 75% of homes sold were on brownfield developments
with all in the south east on brownfield land. We have started selling on the
108 home conversion of the former Queen Elizabeth II hospital at Banstead and
are making progress in securing the necessary planning consents to develop the 8
acre brownfield site in Osterley, west London that we acquired last year. In the
south west, we are following our redevelopment of Truro hospital into 190 units
with our joint development with English Partnerships of a 17 acre site in
Camborne, Cornwall, expected to provide a total of 390 homes, both affordable
and for sale, on which we exchanged contracts since the year end.
We continue to achieve one of the highest scores in independent customer care
research, with over 90% of our purchasers stating they would recommend us to
their best friend. This helps minimise our after sales costs and supports our
reputation among homebuyers generally in the market. We received a number of
sustainable development and design awards during the year, two gold and two
silver awards at the annual Daily Telegraph / What House awards and a CABE
(Commission for Architecture and the Built Environment) gold award for our mixed
development at Gun Wharf, Plymouth.
Our landbank, currently standing at 4,115 units after the Chartdale acquisition,
compares to 2,605 last year. We have limited our exposure to apartments, which
represent 22% of our landbank. In the last year we have secured consents for 81
plots from our strategic land, which currently stands at 625 acres.
Since the start of the new financial year sales, supported by the limited use of
incentives, have exceeded targets and at the end of August the value of total
sales in hand stood at £122 million, up 22% on a year ago.
Health, Safety and Environment
We treat health, safety and environment issues as a priority in our business,
focussing on continuous improvement in our standards as an integral part of our
management process. Our accident incident rate of 7.11 per 1,000 people for the
year showed a reduction for the third successive year.
We are also committed to a policy of effectively managing our environmental
performance in order to minimise the impact of our business processes on the
natural environment. During the year seven of our business units achieved
ISO14001 accreditation.
OUTLOOK
We enter our new financial year in a strong position. Our building and
infrastructure divisions have a well balanced workload across their specific
sectors of expertise, and the structure is in place to deliver continued growth.
The expansion of our housebuilding division is progressing well. We are
encouraged by the way the business has performed in the markets we have faced
and by the opportunities we have to grow both our traditional development and
urban regeneration activities. Our objective is to continue our expansion.
Our finances are very strong. Acquiring Morrison and Chartdale has demonstrated
our ability to supplement organic growth with carefully positioned acquisitions
that fit our strategy. We have proved the success of our business model in
delivering profitable growth and we look forward to reporting further progress
in the coming year.
Greg Fitzgerald
Chief Executive
7 September 2006
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2006
2006 2005
Notes £'000 £'000
-----------------------------------------------------------------------
Continuing operations
Revenue 2 851,499 718,494
Cost of sales (763,456) (651,675)
-----------------------------------------------------------------------
Gross profit 88,043 66,819
Administrative expenses (48,861) (35,596)
Share of post tax profit/(losses)
from joint ventures 315 (219)
-----------------------------------------------------------------------
Profit before finance costs 2 39,497 31,004
------------------------------------------------------------------------
Profit before finance costs,
amortisation and exceptional items: 37,971 31,004
Amortisation of intangibles (447) -
Exceptional items:
- Profit on sale and leaseback of
property 3,908 -
- Restructuring costs (1,935) -
-----------------------------------------------------------------------
Profit before finance costs 39,497 31,004
=======================================================================
Finance costs:
Interest receivable 3 657 664
Interest payable 3 (5,695) (4,411)
Income from investments - 100
-----------------------------------------------------------------------
Profit on ordinary activities before tax 34,459 27,357
Taxation 4 (9,085) (8,312)
-----------------------------------------------------------------------
Profit for the financial period 25,374 19,045
=======================================================================
Profit for the year attributable to:
- equity shareholders 25,352 19,045
- minority interest 22 -
-----------------------------------------------------------------------
25,374 19,045
=======================================================================
Earnings per ordinary share
- basic 5 10.8p 8.6p
- diluted 5 10.6p 8.5p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the year ended 30 June 2006
2006 2005
£'000 £'000
------------------------------------------------------------------------
Profit for the financial period 25,374 19,045
Actuarial losses in pension scheme (5,135) (15,175)
Deferred tax on items taken directly
to equity 2,278 4,552
Current tax on items taken directly
to equity 1,390 -
Net losses not recognised in the
income statement (1,467) (10,623)
Total recognised income for the period 23,907 8,422
CONSOLIDATED BALANCE SHEET
at 30 June 2006
2006 2005
£'000 £'000
-----------------------------------------------------------------------
Non-current assets
Intangible assets 2,305 -
Goodwill 57,242 -
Property, plant and equipment 7,968 11,630
Investments in joint ventures and associates 3,314 2,111
Financial assets - Available for sale investments 1,167 468
Trade and other receivables 251 245
Deferred tax assets 15,676 15,187
-----------------------------------------------------------------------
Total non-current assets 87,923 29,641
Current assets
Inventories 886 613
Developments 283,825 206,171
Trade and other receivables 184,065 100,204
Financial assets
- Available for sale financial assets - 3,412
- Derivative financial assets 49 139
Cash and cash equivalents 21,738 2,007
-----------------------------------------------------------------------
Total current assets 490,563 312,546
-----------------------------------------------------------------------
Total assets 578,486 342,187
-----------------------------------------------------------------------
Current liabilities
Financial liabilities - borrowings (3,864) (16,769)
Trade and other payables (344,429) (215,108)
Current tax liabilities (3,101) (3,549)
Provisions (1,939) (99)
-----------------------------------------------------------------------
Total current liabilities (353,333) (235,525)
-----------------------------------------------------------------------
Net current assets 137,230 77,021
-----------------------------------------------------------------------
Non- current liabilities
Financial liabilities - borrowings (1,919) (1,013)
Retirement benefit obligations (47,088) (46,168)
Deferred tax liabilities (13,489) (2,837)
Other liabilities (42,100) (2,598)
Provisions (428) (342)
-----------------------------------------------------------------------
Total non-current liabilities (105,024) (52,958)
-----------------------------------------------------------------------
Total liabilities (458,357) (288,483)
-----------------------------------------------------------------------
Net assets 120,129 53,704
=======================================================================
Shareholders' equity
Share capital 13,740 11,340
Share premium 48,698 2,295
Merger reserves 4,687 4,687
Retained earnings 52,982 35,382
-----------------------------------------------------------------------
Total shareholders' equity 120,107 53,704
Minority interest in equity 22 -
-----------------------------------------------------------------------
Total equity 120,129 53,704
=======================================================================
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 June 2006
2006 2005
Notes £'000 £'000
-----------------------------------------------------------------------
Cashflows from operating activities:
Net cash from operations 8 18,234 15,608
Net interest paid (4,623) (3,299)
Tax paid (10,291) (8,472)
-----------------------------------------------------------------------
Net cash from operating activities 3,320 3,837
Cash flows from investing activities:
Acquisition of subsidiary (net of
cash acquired) (24,863) -
Acquisition of investments in joint
ventures and associates (1,003) (75)
Income from investments in joint
ventures and associates 115 35
Acquisition of available for sale
investments (699) (69)
Proceeds from sale of available for
sale investment - 1,771
Purchase of property, plant and
equipment (1,609) (1,598)
Proceeds from sale of property, plant
and equipment 11,123 29
-----------------------------------------------------------------------
Net cash (used in)/from investing activities (16,936) 93
Cash flows from financing activities:
Net proceeds from issue of ordinary
share capital 48,803 200
Purchase of treasury shares (1,866) (450)
Repayment of borrowings (82) (144)
Borrowing acquired with subsidiary (48) -
Dividends paid to group shareholders (4,902) (3,875)
Available for sale financial asset 3,412 (3,412)
-----------------------------------------------------------------------
Net cash used in financing activities 45,317 (7,681)
-----------------------------------------------------------------------
Increase/(decrease) in net cash and
cash equivalents 31,701 (3,751)
-----------------------------------------------------------------------
Net cash and cash equivalents at
beginning of period (13,733) (9,982)
-----------------------------------------------------------------------
Net cash and cash equivalents at end
of period 9 17,968 (13,733)
=======================================================================
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. Galliford Try plc ('the Group') has adopted
International Financial Reporting Standards ('IFRS') with effect from 1 July
2005, in accordance with the European Union Regulations. The financial
information for the year ended 30 June 2005 has been restated accordingly.
2 Business segment reporting
During the year ended 30 June 2006, for management purposes the Group was
organised into three operating divisions, Construction, PPP Investments and
Housebuilding. The divisions are the basis on which the Group reports its
primary segmental information. With effect from 1 July 2006, Construction
activities have been operating as two divisions Building and Infrastructure. As
the Group has no material activities outside the UK, segmental reporting is not
required by geographical area.
Year ended 30 June 2006
£'000 Construction PPP Housebuilding Group Total
Investments
£'000 £'000 £'000 £'000 £'000
Group revenue and share
of joint venture revenue 628,847 914 223,787 557 854,105
Share of joint ventures'
revenue (2,481) - (125) - (2,606)
--------------------------------------------------------------------------------------
Revenue 626,366 914 223,662 557 851,499
--------------------------------------------------------------------------------------
Segment result:
Profit before joint ventures 13,211 (1,523) 31,369 (5,401) 37,656
Share of joint ventures' profit (4) (58) 650 - 588
--------------------------------------------------------------------------------------
Profit from operations* 13,207 (1,581) 32,019 (5,401) 38,244
Share of joint ventures'
interest and tax (64) 289 (498) - (273)
--------------------------------------------------------------------------------------
Profit before finance
costs, amortisation and
exceptional items 13,143 (1,292) 31,521 (5,401) 37,971
Amortisation and
exceptional items (113) - 1,388 251 1,526
--------------------------------------------------------------------------------------
Profit before finance costs 13,030 (1,292) 32,909 (5,150) 39,497
Net finance costs (5,038)
--------------------------------------------------------------------------------------
Profit before tax 34,459
Taxation (9,085)
--------------------------------------------------------------------------------------
Profit for the year from
continuing operations 25,374
======================================================================================
Year ended 30 June 2005
Construction PPP Housebuilding Group Total
Investments
£'000 £'000 £'000 £'000 £'000
Group revenue and share
of joint venture revenue 537,733 - 187,991 514 726,238
Share of joint ventures'
revenue (1,714) - (6,030) - (7,744)
---------------------------------------------------------------------------------------
Revenue 536,019 - 181,961 514 718,494
========================================================================================
Segment result:
Profit before joint ventures 8,901 (1,240) 28,002 (4,440) 31,223
Share of joint ventures' profit 188 (28) (134) - 26
---------------------------------------------------------------------------------------
Profit from operations* 9,089 (1,268) 27,868 (4,440) 31,249
Share of joint ventures'
interest and tax (54) - (191) - (245)
---------------------------------------------------------------------------------------
Profit before finance
costs, amortisation and
exceptional items 9,035 (1,268) 27,677 (4,440) 31,004
Amortisation and
exceptional items - - - - -
---------------------------------------------------------------------------------------
Profit before finance costs 9,035 (1,268) 27,677 (4,440) 31,004
Net finance costs (3,747)
Income from investments 100
---------------------------------------------------------------------------------------
Profit before tax 27,357
Taxation (8,312)
---------------------------------------------------------------------------------------
Profit for the year from
continuing operations 19,045
=======================================================================================
* Profit from operations is stated before finance costs, exceptional items,
amortisation and share of joint venture interest and tax.
Construction PPP Housebuilding Group Total
Investments
£'000 £'000 £'000 £'000 £'000
Year ended 30 June 2006
Assets
Goodwill 55,284 1,958 - - 57,242
Intangibles 2,305 - - - 2,305
Investment in joint
ventures and associates 285 1,204 1,825 - 3,314
Segment assets 179,600 1,511 291,078 21,698 493,887
------------------------------------------------------------------------------------
237,474 4,673 292,903 21,698 556,748
Cash and cash equivalents 21,738
------------------------------------------------------------------------------------
Consolidated total assets 578,486
====================================================================================
Liabilities
Segment liabilities 256,767 2,047 149,411 44,349 452,574
--------------------------------------------------------------------------
Gross debt 5,783
------------------------------------------------------------------------------------
Consolidated total liabilities 458,357
====================================================================================
Net assets/(liabilities)
excluding net debt,
goodwill and intangibles (76,882) 668 143,492 (22,651) 44,627
Goodwill and intangibles 57,589 1,958 - - 59,547
------------------------------------------------------------------------------------
Net assets/(liabilities)
excluding net debt (19,293) 2,626 143,492 (22,651) 104,174
--------------------------------------------------------------------------
Net cash/(debt) 15,955
------------------------------------------------------------------------------------
Net assets 120,129
------------------------------------------------------------------------------------
Year ended 30 June 2005
Assets
Goodwill - - - - -
Intangibles - - - - -
Investments in joint
ventures and associates 447 (28) 1,692 - 2,111
Other assets 91,990 1,484 212,812 28,371 334,657
------------------------------------------------------------------------------------
92,437 1,456 214,504 28,371 336,768
--------------------------------------------------------------------------
Current asset investment 3,412
Cash and cash equivalents 2,007
------------------------------------------------------------------------------------
Consolidated total assets 342,187
===================================================================================-
Liabilities
Segment liabilities 139,919 1,113 76,371 53,298 270,701
--------------------------------------------------------------------------
Gross debt 17,782
------------------------------------------------------------------------------------
Consolidated total liabilities 288,483
====================================================================================
Net assets/(liabilities)
excluding net debt,
goodwill and intangibles (47,482) 343 138,133 (24,927) 66,067
Goodwill and intangibles - - - - -
------------------------------------------------------------------------------------
Net assets/(liabilities)
excluding net debt (47,482) 343 138,133 (24,927) 66,067
------------------------------------------------------------------------------------
Net cash/(debt) (12,363)
------------------------------------------------------------------------------------
Net assets 53,704
====================================================================================
3 Interest payable
2006 2005
£'000 £'000
------------------------------------------------------------------------------
Bank interest 2,304 2,175
Interest on unwinding of
discounted creditors 2,402 1,320
Net finance cost on retirement
benefit obligations 746 823
Other 243 93
------------------------------------------------------------------------------
Interest payable 5,695 4,411
Interest receivable (657) (664)
------------------------------------------------------------------------------
Interest payable - net 5,038 3,747
==============================================================================
4 Taxation
The tax charge for the year is set out below:
Analysis of charge in year 2006 2005
£000 £000
-------------------------------------------------------------------------------
Current tax
- continuing operations 9,658 8,003
Deferred tax
- continuing operations 255 214
Total previous years' tax (828) 95
-------------------------------------------------------------------------------
Taxation 9,085 8,312
-------------------------------------------------------------------------------
Tax on items charged to equity 2006 2005
£000 £000
-------------------------------------------------------------------------------
Current tax (credit) on stock options (1,390) -
Deferred tax (credit) / charge for stock options (247) 36
Deferred tax on pensions (1,541) (4,588)
Deferred tax on revaluation (490) -
-------------------------------------------------------------------------------
(3,668) (4,552)
-------------------------------------------------------------------------------
Total taxation 5,417 3,760
===============================================================================
The profit and loss tax charge for the year of £9,085,000 is 26.4% of profit on
ordinary activities before tax. This is lower than (2005: the same as) the
standard rate of corporation tax in the UK of 30%. The differences are
explained below:
2006 2005
£000 £000
-------------------------------------------------------------------------------
Profit on ordinary activities before tax 34,459 27,357
-------------------------------------------------------------------------------
Profit on ordinary activities multiplied by the
standard rate in the UK of 30% (2005:30%) 10,338 8,207
Effects of:
Expenses not deductible for tax purposes 855 136
Utilisation of capital gains tax losses (1,112) -
Adjustments in respect of previous years (828) 95
Other (168) (126)
-------------------------------------------------------------------------------
Total taxation (continuing operations) 9,085 8,312
-------------------------------------------------------------------------------
5 Earnings per share
Basic earnings per share is calculated using the profit on ordinary activities
after tax and the weighted average number of ordinary shares in issue during the
year less the weighted average number of shares held by the Galliford Try
Employee Share Trust which have not unconditionally vested in employees. For
diluted earnings per share the weighted average number of ordinary shares is
adjusted to assume conversion of all potentially dilutive ordinary shares.
2006 2005
----------------------------- ---------------------------
Weighted Per Weighted Per
average share average share
Earnings number amount Earnings number amount
£000 of shares pence £000 of shares pence
Basic
Earnings attributable
to ordinary shareholders 25,374 235,209,936 10.8 19,045 221,821,456 8.6
Effect of dilutive
securities:
Options 3,076,310 2,783,273
--------------------------------------------------------------------------------------
Diluted 25,374 238,286,246 10.6 19,045 224,604,729 8.5
======================================================================================
Earnings adjusted for post tax exceptional items of £2,475,000 amount to
£22,899,000. The basic earnings per share on this adjusted basis is 9.7p
(diluted 9.6p).
6 Dividends
2006 2005
£000 £000
---------------------------------------------------------------------------------
Final dividend paid : 2005 1.5p per share (2004: 1.13p
per share) 3,342 2,545
Interim dividend paid 2006: 0.7p per share (2005: 0.6p
per share) 1,560 1,330
---------------------------------------------------------------------------------
4,902 3,875
=================================================================================
The directors are proposing a final dividend in respect of the financial year
ending 30 June 2006 of 1.8p per share bringing the dividend in respect of 2006
to 2.5p (2005: 2.1p). The final dividend will absorb an estimated £4,911,000 of
shareholders' funds. Subject to approval at the Annual General Meeting to be
held on Friday 27 October 2006, the dividend will be paid on 3 November 2006 to
shareholders who are on the register of members on 6 October 2006.
7 Acquisitions
During the year the Group made three acquisitions. The consideration payable,
including expenses, for these acquisitions was as follows:
£000
Pentland 1,484
Chartdale 60,920
Morrison Construction 39,655
--------------------------------------------------------------------------------
102,059
================================================================================
A reconciliation of the above amounts to the total purchase price for Chartdale
and Morrison Construction is set out below. There was no difference for
Pentland.
Chartdale £000
Total purchase price 67,000
Expenses 1,675
Less: Cash received from vendor (4,148)
Less: Discounting of deferred payments (3,607)
--------------------------------------------------------------------------------
60,920
================================================================================
Morrison Construction £000
Total purchase price 42,000
Expenses 1,723
Less: Investments to be acquired (3,500)
Less: Adjustment to purchase price (568)
39,655
From the date of acquisition to 30 June 2006 the acquisitions contributed
£102,738,000 of turnover and £2,567,000 to profit before interest and intangible
amortisation as follows:
Profit before
finance costs
and intangible
amortisation
Revenue
£000 £000
Pentland 2,080 108
Chartdale 9,826 1,491
Morrison Construction 90,832 968
---------------------------------------------------------------------------------
102,738 2,567
=================================================================================
All intangible assets were recognised at their respective fair values. £642,000
of goodwill arose on the acquisition of Pentland. No goodwill on the Chartdale
acquisition. Details of the fair values relating to Morrison Construction and
the associated goodwill arising on the acquisition are given below:
Carrying value Provisional
pre acquisition fair value
---------------------------------------------------------------------------------
£000 £000
Intangibles - 2,752
Property, plant and equipment 1,212 850
Trade and other receivables 83,357 81,825
Cash and cash equivalents 30,240 30,240
Trade and other payables (130,536) (132,457)
Current tax liabilities - -
Deferred taxation (155)
---------------------------------------------------------------------------------
Net assets acquired (15,727) (16,945)
Goodwill 56,600
---------------------------------------------------------------------------------
Consideration 39,655
=================================================================================
The intangible assets acquired as part of the acquisition of Morrison
Construction can be analysed as follows:
£000
Brand 454
Customer contracts 1,865
Relationships 433
---------------------------------------------------------------------------------
2,752
=================================================================================
8 Cashflow from operating activities
2006 2005
£000 £000
------------------------------------------------------------------------------
Cash generated from operations
Continuing operations
Net profit 25,374 19,045
Adjustments for:
Tax 9,085 8,312
Depreciation 1,534 1,821
Amortisation of intangible 447 -
Charge for employee share options 483 274
Profit on sale and leaseback of property (3,908) -
Loss on disposal of property, plant and
equipment 338 54
Profit on sale of fixed asset investments - (1,562)
Interest income (657) (664)
Interest expense 5,695 4,411
Share of results of joint ventures before
taxation (315) 219
Non cash pension credit (4,215) (2,371)
Changes in working capital (excluding the
effects of acquisition of subsidiaries)
Decrease in inventories 510 182
Increase in developments (1,237) (32,102)
(Increase)/decrease in trade and other
receivables (161) 6,083
(Decrease)/increase in payables (16,665) 11,906
Increase in provisions 1,926 -
------------------------------------------------------------------------------
Cash generated from continuing operations 18,234 15,608
==============================================================================
9 Reconciliation of net cash
Net cash/(debt)
2006 2005
£000 £000
---------------------------------------------------------------------------------
Current asset investment - 3,412
Cash and cash equivalents 21,738 2,007
Bank overdrafts (3,770) (15,740)
Current borrowings
Bank loan - secured (67) (1,017)
Other loan (12) (12)
Finance lease obligations (15) -
Non - current
Bank loans (884) -
Unsecured loan notes -
repayable between 2007 and 2011 (1,026) (1,013)
Finance lease obligations (9) -
---------------------------------------------------------------------------------
15,955 (12,363)
=================================================================================
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