Interim Management Statement

RNS Number : 0800C

Galliford Try PLC

06 November 2009

 



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 and is issuing its interim management statement for the period from 1 July 2009 to 5 November 2009.

Housebuilding

The encouraging start to our financial year in housebuilding has continued into the autumn selling season with a stable housing market, and improved sales volumes and income levels achieved across our southern based business. On 18% fewer active selling sites than a year ago total sales reserved, contracted or completed are up by 7% and currently stand at £274 million. £184 million is for the current financial year to 30 June 2010, representing 60% of projected sales for the year. Mortgage availability, although still a major constraint, has continued to improve and our cancellation rates have fallen back to 12% in the current financial year, whereas they were at 28% a year ago.  

Following the raising of a net £119 million in the recently completed rights issue we are pressing ahead with our plans to deliver significant growth in our housebuilding business over the next three years. Good progress is being made on bringing land acquisition opportunities to fruition. Since the start of the financial year we have secured a number of sites across our areas of operation that meet our criteria, adding 800 units to the landbank.  Positive progress is also being made by our affordable housing and regeneration business, with both further direct grant awards and £16.8 million of Kickstart funding now secured from the Homes and Communities Agency's housing stimulus package.

Construction

Our construction businesses continue to perform well in a competitive market and to benefit from their concentration on public and regulated sector work. The anticipated five year framework renewals in our water business are now coming through and since the start of our financial year we have secured our positions on the £2 billion capital works framework for Scottish Water and the £400 million capital works framework for United Utilities, with the remaining renewals expected around the end of 2009. We have also succeeded in winning some significant private commercial projects as well as work in the public sector. Contracts secured in the period include £83 million of hotel and residential projects, £49 million of health sector work, £32 million of highways in Scotland, and a position as one of the contractors on Network Rail's five year £1 billion enhancements multi asset framework. Notwithstanding the competitive market, our contracting order book has increased during the period to £1.75 billion, 81% of which is for the public and regulated sectors with 80% of our anticipated revenues secured for the financial year to 30 June 2010.

As announced on 22 September, as one of 103 construction companies found to be in breach of the 1998 Competition Act, we were fined £8.33 million by the Office of Fair Trading in respect of three instances of cover pricing that took place in the early 2000s. We are totally committed to complying with competition law and are considering the grounds for appealing the fine imposed.

Outlook

The Board is cautiously optimistic on the immediate outlook for housebuilding, with the rights issue giving us the resources that, when added to our organisational strength, will enable us to deliver our strategic expansion plan. We are performing well in construction, with the spread of our order book mitigating the effect of the market, albeit we continue to view the outlook with caution as future constraints on public expenditure will add to the competitive pressures across the industry. Overall, the Board considers the Group is well positioned to take advantage of the opportunities that are arising as its markets develop.

Further enquiries to:

Greg Fitzgerald, Chief Executive                    01895 855219

Frank Nelson, Finance Director                      01895 855226

Louise Mantio, Communications Director        01895 855153

 

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