Interim Management Statement

RNS Number : 9046R

Galliford Try PLC

11 November 2011

 



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 11 November, and is issuing its Interim Management Statement for the period from 1 July 2011 to 10 November 2011.

Highlights

·      Housebuilding

·      38% growth in sales reserved, contracted or completed to £430 million following an encouraging autumn selling season.  £342 million is for the current financial year to 30 June 2012. (2010: £312 million and £212 million respectively).

·      47% increase in sales per outlet to 0.50 per week from 1 July 2011 (2010: 0.34), averaging 0.60 during the autumn selling season.  Selling outlets increased to 82 (2010: 59).

·      Sales prices achieved in line with expectations.  Cancellation rates below the long term average at 16%.  Mortgage availability showing signs of improvement.

·      73% of 10,500 plot land bank (2010: 9,600 plots) secured at current market values.  On target to secure all plots required for financial year to 30 June 2013 by February 2012.

·      Construction

·      Industry leading cash balances continue.

·      £1.6 billion order book in line with expectations (2010: £1.75 billion).

·      95% of projected revenues for financial year to 30 June 2012 secured with 58% for year to 30 June 2013. (2010: 91% and 55% respectively).

Greg Fitzgerald, Chief Executive, commented:

"Although the economic outlook remains uncertain, we have been encouraged by the performance of our housebuilding business as its growth plan comes to fruition during this financial year.  Construction is benefitting from its long term frameworks, particularly for the water industry, during the current more challenging markets.

While continuing to adopt an appropriate level of caution, we remain confident in 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 -          Christian Cowley                                   020 7353 4200

Housebuilding

Total sales reserved, contracted or completed are up by 38% from a year ago, standing at £430 million.  £342 million is for the current financial year to 30 June 2012, representing 56% of projected sales for the year (2010: £212m, 52%).

Since the start of our financial year prices achieved have met our expectations.  We generated encouraging sales volumes during the autumn selling season which we have maintained at similar levels into recent weeks.  The strongest market continues to be in the south east, where we have a well established presence. 

Mortgage availability has eased and we have secured access to a product that provides a 95% loan to value mortgage for our purchasers.  Cancellation levels are below the long term average at 16%, and we are selling with fewer than expected financial incentives, carefully controlling the use of shared equity and part exchange. 

We currently have 82 active selling sites with sales from 1 July 2011 to date representing 0.50 units per site per week, with the average rising to 0.60 during the autumn.  We anticipate selling from around 100 sites by June 2012, in line with our expansion plan.  The increase in the number of outlets, and the greater proportion of our sales coming from the new land on which profit margins are higher, will continue to drive increased profitability.  73% of our 10,500 plot land bank (2010: 9,600) has now been secured at current market prices with only 27% remaining from our 2008 financial year or before, when land prices were higher.  We see the Government's current proposals to reform the planning process as positive, with the National Planning Policy Framework expected to support the delivery of more new homes.

Construction

In line with our clearly stated strategy in more challenging markets of only pursuing work on which we can earn an acceptable return and cash profile we have maintained our targeted inflow.  This has been achieved despite the decline in public sector opportunities and the limited recovery in the private sector, although the London market is more positive.  Our total construction order book has therefore reduced, and is in line with our expectations at £1.6 billion (2010: £1.75 billion).  40% is in the regulated sector, 45% in the public sector and 15% in the private sector.  64% has been secured in frameworks or on a basis other than through pure price competition.  95% of our projected revenues have been secured for the current financial year to 30 June 2012, with 58% for 2013.  (2010: 91% and 55% respectively).

We are now starting to work strongly through the AMP5 framework workload for our water clients as we approach the mid point of the five year cycle.  Framework positions qualify us for additional projects, and we recently secured a further £35 million of work in joint venture for Anglian Water, one of our longstanding framework clients.  Our framework with the Environment Agency has been extended to 2013, and we anticipate a further £30 million of work as a result. 

We secured a position on the affordable housing framework for A2 Dominion in London, and in joint venture with the Notting Hill Housing Group, won a £23 million project for the London Development Agency.  We have also been appointed by Genting UK as preferred bidder for a £80 million project to construct Resorts World at the NEC in Birmingham.

Outlook

Although the economic outlook remains uncertain, we have been encouraged by the performance of our housebuilding business as its growth plan comes to fruition during this financial year.  Construction is benefitting from its long term frameworks, particularly for the water industry, during the current more challenging markets.  Our financial position remains robust as we continue to manage closely the investment in housebuilding with cash balances generated from construction remaining at industry leading levels, albeit levelling down, as forecast, to reflect the current market.  While continuing to adopt an appropriate level of caution, the Group remains confident in delivering the objectives of its expansion plan. 

 

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