Interim Management Statement

RNS Number : 6664V

Galliford Try PLC

05 November 2010

 



GALLIFORD TRY PLC

INTERIM MANAGEMENT STATEMENT AND ANNUAL GENERAL MEETING

Galliford Try plc, the housebuilding and construction Group, is holding its Annual General Meeting today, Friday 5 November, and is issuing its Interim Management Statement for the period from 1 July 2010 to 4 November 2010.

Highlights

·      Housebuilding

·      14% growth in sales reserved, contracted or completed to £312 million of which £212 million is for the current financial year to 30 June 2011. (2009: £274 million and £184 million).

·      Prices achieved slightly above expectations.  Cancellation rates around the long term average at 19%.  Mortgage availability remains a serious constraint.

·      60% of 9,600 plot land bank (2009: 8,250) secured at current market values.

·      Minimal residual dependence on housing grants for developments in Affordable Housing.

·      Construction

·      Continuing to deliver industry leading cash balances.

·      Order book maintained at £1.75 billion (2009: £1.75 billion).

·      91% of anticipated revenues for financial year to 30 June 2011 secured. (2009: 79%).

Greg Fitzgerald, Chief Executive, commented:

"The economic outlook remains uncertain and the Group continues to adopt an appropriate level of caution in the short term. We have a strong balance sheet and remain confident in our strategy for delivering the objectives of our expansion plan."

For further enquiries please contact:

Galliford Try -                             Greg Fitzgerald, Chief Executive             01895 855001

                                                Frank Nelson, Finance Director

Tulchan Communications -          Mal Patel, Matthieu Roussellier              020 7353 4200

Housebuilding

Total sales reserved, contracted or completed are up by 14% from a year ago, standing at £312 million.  £212 million is for the current financial year to 30 June 2011, representing 52% of projected sales for the year (2009: £184m, 60%).

Since the start of our financial year prices achieved have been slightly above our expectations.  We generated encouraging sales volumes over the summer months which we have maintained at similar levels into recent weeks, although we have not seen the historic autumn seasonal upturn.  The strongest market continues to be in the south east where we have a major presence.  Mortgage availability remains a serious constraint, with cancellation levels currently running at around the long term average of 19%.  The controlled use of shared equity and part exchange remain key selling tools. 

We currently have 59 active selling sites, a similar level to a year ago, which is expected to rise significantly in the second half of our financial year.  We are continuing to make selective land acquisitions that meet or exceed our stringent financial criteria.  60% of our 9,600 plot land bank (2009: 8,250) has now been secured at current market prices with only 40% remaining from our 2008 financial year or before, when land prices were higher. 

We anticipated less Government support through direct capital funding for affordable housing in our statements earlier this year and now have very little dependence remaining on housing grant for our developments.  The measures announced in the comprehensive spending review will change the basis of funding from capital grant to a system based on the designation of up to 80% of market rent as affordable. This should provide sufficient impetus to enable housing associations and private providers to increase their development activities and, subject to inevitable delays in implementation, make it possible for the Government to achieve its target of 150,000 affordable homes to be delivered over four years.

As one of only six developers appointed across all three of the Homes and Communities Agency's Developer Partner Panels, we have excellent visibility over public land releases coming to market and anticipate securing good opportunities.

Construction

The business continues to deliver industry leading cash balances.  Our strong position in long-term frameworks for the regulated sector, and with a number of our blue chip private sector clients that are continuing with development programmes, has mitigated the effect of the current competitive market conditions. 

We have maintained our targeted inflow of work despite the uncertainties surrounding the Government's comprehensive spending review.  Our total construction order book has been maintained at £1.75 billion (2009: £1.75 billion).  41% is in the regulated sector, 49% in the public sector and 10% in the private sector.  91% of our anticipated revenues have been secured for the current financial year to 30 June 2011, with 55% for 2012.  (2009: 79% and 49%)

Having secured the five year AMP 5 framework renewals for all of our water clients in the last financial year, our infrastructure business is continuing to win work in the sector.  We recently announced the award to our joint venture of a place on another of Yorkshire Water's frameworks, the £330 million large schemes framework, as well as the first two projects totalling £25 million.  This week we announced the award by Thames Water of a £60 million project at Beckton in London to add to the £280 million of work already secured by our joint venture under our existing frameworks for Thames.

We have a spread of business across the public and private sectors in our building business. We continue to secure projects in health and education, such as the recently announced £8 million project for the University of Manchester and £9 million of work for NHS Tayside.  This week we announced £25 million of work in the commercial sector, a £16 million hotel in Birmingham and a £9 million M40 services project.  James Armitage, who has directed our successful southern building business since 2004, has been appointed Managing Director of the building division during the period.

Board

We were delighted to announce in October that Ian Coull, currently Chief Executive of Segro plc, is joining the board as a non executive director on 8 November and will take over as Chairman when David Calverley retires at the end of June 2011.

Outlook

The economic outlook remains uncertain and the full implications of the Government's comprehensive spending review on both the Group's housebuilding and construction activities are not yet clear.  Our well recognised cash management disciplines continue, with the Group's borrowings at better than expected levels, reinforcing our strong balance sheet.  While continuing to adopt an appropriate level of caution in the short term, the Group remains confident in its strategy for delivering the objectives of its expansion plan.

 

END

 

 

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