Trading Statement

RNS Number : 4405L

Galliford Try PLC

12 January 2009

 



12 January 2009

GALLIFORD TRY PLC - TRADING UPDATE 

Galliford Try plc, the construction and housebuilding group, is providing the following update on trading for the half year to 31 December 2008.

Since announcing our interim management statement in November 2008 the Group has traded in line with our expectations. Cash generation in our contracting business remains excellent and we are making progress in reducing the capital in housebuilding. The Group held net cash of over £1 million at 31 December 2008 compared to net debts of £47 million at 31 December 2007 and £2 million at 30 June 2008, demonstrating that although the Group's borrowings do fluctuate significantly throughout the financial year, we are making our planned progress in debt reduction. The Group continues to operate in compliance with the covenants of its bank facilities.

The Group's strategic concentration on the construction markets for the public and regulated sectors is continuing to mitigate the effects of the deteriorating economy. The contracting order book at 31 December was £1.7 billion, of which 91% is for the public and regulated sectors, with 93% of anticipated revenues for the financial year to 30 June 2009 secured. Although the market generally is becoming more competitive, the Group's construction business is therefore well placed as opportunities for commercial clients reduce.  

The housing market remains extremely difficult and we have made significant further reductions in our cost base to align our operational structure to the current market. The measures include the successful introduction of a four day working week across our housebuilding businesses to reduce cost while enabling us to preserve our geographical coverage. Total housing completions for the period were 964 units compared to 1,174 units the previous year at an average selling price of £171,000 compared with £203,000 a year ago. There was some evidence of a re-emergence of interest from the investor market during December in appropriately located and priced homes, and total sales reserved, contracted or completed at 31 December stood at £281 million compared to £473 million a year ago. £214 million is for the current financial year to 30 June 2009, representing 75% of projected sales for the year compared to 65% at the same point last year. Our strength in the affordable housing sector continues to prove its worth, and although overall activity in this market remains muted, in the six months to 31 December we drew down total revenues of £11.6 million under the National Affordable Housing Programme and were awarded further grant allocations for 132 plots.

The board continues to anticipate that, as announced in the interim management statement last November, a write down of the carrying value of land in the Group's balance sheet of the order of £50 million will be accounted for in the half year results. When announcing the half year results, the board will declare an interim dividend in the light of the economic environment and the Group's trading prospects at that time which, based on the current outlook, the Board does not expect to exceed half of the amount of the interim dividend paid for the previous financial year.

Across our businesses we remain focused on tight cash control, the implementation of stringent cost reduction measures and efficient management of our supply chain. The Group continues to benefit from the spread and depth of its business operations across the construction and housebuilding sectors, with the strategic objective to position itself to take advantage of the opportunities that will arise when economic conditions permit.

The interim results for the half year ended 31 December 2008 are expected to be announced on 19 February 2009.

Further enquiries to:

Greg Fitzgerald, Chief Executive                       01895 855219

Frank Nelson, Finance Director                        01895 855226

Louise Mantio, Communications Director          01895 855092

 

END

 

 

TSTILFSDLVIAIIA