Trading Statement

RNS Number : 2572H

Galliford Try PLC

10 July 2012

 



10 JULY 2012

GALLIFORD TRY PLC - TRADING UPDATE

Galliford Try plc, the housebuilding and construction group, today provides the following update on trading for the year ended 30 June 2012.  The group expects to announce its results for the full year on 19 September 2012.

Greg Fitzgerald, Chief Executive, commented:

"I am very pleased to report that we have exceeded the objectives of our three year transformational housebuilding plan delivering a substantial increase in profits and return on capital.  Since our last update the housing market has been stable.  In addition, and against a background of challenging economic conditions, we have maintained a high quality construction order book and benefited from a number of contract wins.  Our strong financial performance in the period means the group is cash positive at financial year end and, subject to economic conditions, we are well placed to deliver further margin improvement and growth in the new financial year."

HIGHLIGHTS

·      Exceeded the objectives of our three year transformational housebuilding plan.

·      Full year results expected to be in line with market expectations.

·      Net cash of over £20 million at 30 June 2012 (31 December 2011: net debt £70 million and 30 June 2011: net cash £37 million).

Housebuilding

·      Housing completions (including joint ventures) up 40% to a record 3,039 units (2011: 2,170 units).

·      Average private sales price up 10% to £250,000 (2011: £227,000). 

·      11% increase in housing sales carried forward at £273 million (2011: £247 million). 

·      Increase in total landbank to 10,500 plots (30 June 2011: 10,250 plots), with a greater concentration of plots in the stronger south east in line with our strategy.

·      81% of 10,500 plot landbank secured at current market values.  100% of plots secured for the new financial year's production.  87% of plots secured for FY 2014. 

Construction

·      Continued resilient performance in difficult markets.

·      £1.6 billion stable order book in line with expectations (31 December 2011: £1.6 billion and 2011: £1.75 billion).

·      Strong cash management throughout the year with cash balances in line with our expectations.

·      Major contract awards instructed include the £347 million Gateshead Regeneration Programme, the £180 million scheme to upgrade and extend the Liverpool Waste Water Treatment Works and the £80 million Kingskerswell Bypass contract.

·      82% of projected revenue for the new financial year secured (2011: 80%).

For further enquiries:

Galliford Try                               Greg Fitzgerald, Chief Executive              01895 855001

                                                Frank Nelson, Finance Director              

Tulchan Communications            Christian Cowley                                    020 7353 4200

                                                James Macey White

Housebuilding

Sales levels and prices have been stable since our last update.  Cancellation levels of 18% are around the long-term average (2011: 19%).  We continue to benefit from our key geographic focus in the south of England and in particular the south east where the economy remains resilient.

The number of sales outlets currently stands at 87 reflecting our plan and completion of legacy sites.  Completions (including joint ventures) rose 40% during the year to bring the total for the year to a record 3,039 (2011: 2,170 units).  During the second half of the year sales rates averaged 0.55 per site per week (20% ahead of the same period last year).  We enter the new financial year with £273 million of housing sales carried forward, being 11% up on last year and of which £197 million is for the 2012/13 financial year.  Of the 3,039 units completed in the year, private housebuilding represented 2,272 units and affordable and regeneration 767 units.  In private housebuilding the average price was £250,000 (2011: £227,000) while in affordable housing the average price was £104,000 (2011: £106,000).  We continue to have success in acquiring public land on deferred payment terms and in converting funding awards, reflecting our presence on the HCA programme frameworks.

As we enter the new financial year our landbank, as at 5 July 2012, is 10,500 plots of which 81% has been secured at current market values (2011: 10,250 plots and 70% respectively) with 75% in the south of England. This is consistent with our future growth objectives.  We remain focused on improving operating margins in our housebuilding division.

Construction

Against a backdrop of continuing difficult markets our construction business has maintained its workload at acceptable levels.  The division has focused on projects that provide expected returns, maintaining robust risk management and focusing efforts on key clients and long-term frameworks.  At the start of the new financial year the division has a total order book of £1.6 billion with 82% of planned revenues for the new financial year secured (2011: £1.75 billion and 80% respectively).  The division's order book is made up of 44% for the regulated sector, 43% for the public sector with the remainder being in the private sector.

Whilst there has been a clear reduction in public sector commissioned works, we have nevertheless been successful in securing and commencing a number of major projects.  These include achieving financial close on the £347 million Gateshead Regeneration Programme and commencement of the £180 million contract to upgrade and extend the Liverpool Waste Water Treatment Works.  Last month the division also announced it had been awarded the £80 million contract for the A380 South Devon link road (Kingskerswell Bypass) for Devon County Council and Torbay Council. 

We continue to pursue significant project wins in our chosen markets.

Outlook

We have exceeded the objectives of our three year transformational housebuilding plan delivering a substantial increase in profits and return on capital.  Since our last update the housing market has been stable.  In addition, and against a background of challenging economic conditions, we have maintained a quality construction order book and benefited from a number of contract wins.  Our strong financial performance in the period means the group is cash positive at financial year end and, subject to economic conditions, we are well placed to deliver further margin improvement and growth in the new financial year.

Notes to editors:

Galliford Try plc is a leading UK housebuilding and construction group. It is listed on the London Stock Exchange and a member of the FTSE 250. The housebuilding business - through its Linden Homes brand - sells distinctive homes to the public and affordable homes to housing associations and local authority providers across the South and South East of England.  The construction business carries out building and infrastructure work across the UK, with clients ranging from major Government departments through to regulated utilities and private sector companies. At the end of the last financial year to 30 June 2011, the Group generated revenues of £1.3 billion.

 

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