Trading Statement

RNS Number : 3740Z

Galliford Try PLC

13 January 2011

 



13 JANUARY 2011  

GALLIFORD TRY PLC

TRADING UPDATE

Galliford Try plc, the housebuilding and construction group, today provides the following update on trading for the half year ended 31 December 2010.  The group expects to announce its results for the half year on 23 February 2011.

Highlights

·      Housebuilding

·      28% increase in total housing completions to 851 units; 779 net of joint venture partners' share (2009: 663 and 638).

·      11% increase in total housing sales reserved, contracted and completed at £359 million (2009: £324 million).

·      8% increase in total landbank to 9,500 plots (31 December 2009: 8,800 plots).

·      62% of landbank now secured at current market values, (31 December 2009: 36%).

·      Selected as preferred developer on projects in all three HCA delivery partner panel regions.

·      Construction

·      £1.75 billion order book maintained  (2009: £1.75 billion).

·      40% of order book in regulated sector, 49% in public and 11% in private maintains a quality spread of work.

·      96% of projected revenue for current financial year secured with 58% for year to 30 June 2012 (31 December 2009: 92% and 54% respectively).

Greg Fitzgerald, Chief Executive, commented:

"While the economic outlook is still uncertain, the board continues to be encouraged by the progress being made in housebuilding and by the resilience of the Group's construction business.  While remaining cautious in the short term, the Group is confident in its strategy for delivering the objectives of its expansion plan."

For further enquiries please contact:

Galliford Try -                             Greg Fitzgerald, Chief Executive              01895 855001

                                                Frank Nelson, Finance Director

Tulchan Communications -          Mal Patel, Matthieu Rousselier                020 7353 4200

Housebuilding

Total sales reserved, contracted or completed of £359 million are up by 11% compared to a year ago.  £238 million is for the current financial year to 30 June 2011, representing 63% of projected sales for the year (2009: £235 million, 75%).  Our sales in the first half have been achieved from a similar number of outlets to last year.  The second half is expected to benefit from a significant increase in the number of active selling sites over the next six months from the current level of 65 to over 85 by the end of the financial year in June 2011, giving us the outlets projected in our three year expansion plan. 

Following the encouraging sales volumes achieved during the first quarter, the market did not benefit from the historic autumn seasonal upturn.  It then remained subdued for the rest of the first half of our financial year, exacerbated by the adverse weather conditions across our operating areas in December.  Mortgage availability remains the most serious constraint to sales volumes, and we continue to make controlled use of shared equity and part exchange sales incentives. Our cancellation levels are currently running at 20%, close to the long term average.

With our strong southern bias and minimal dependence on consortium sites, prices achieved have continued to be at or slightly above our expectations and our average selling price on private sales was up 4% at £204,000 (2009: £197,000).  Due to a higher proportion of lower priced affordable homes completed in the period, the average selling price for affordable sales was £110,000 (2009: £131,000) leading to a combined average selling price of £178,000 (2009: £181,000).

Good land opportunities continue to be available.  Galliford Try's expertise on working with local communities and planning authorities to obtain planning consents on land secured on a conditional basis remains an important factor in providing future development sites.  Our total land bank at 31 December 2010 is 9,500 plots (2009: 8,800) of which 5,900 plots, or 62% of our total landbank, have been acquired under current market conditions, compared to 36% a year ago.  Based on our strict financial criteria for land acquisitions, we have 2,700 plots with terms agreed in the pipeline.

We are now preferred bidder on development opportunities in all three regions of the Homes and Communities Agency's delivery partner panels, demonstrating our industry leading presence in affordable housing and regeneration across the country.  We also anticipate that the Government's designation of up to 80% of open market rent as affordable housing will support development levels, sustaining both pricing and sales volumes in the sector.

Construction

Our focus has been on maintaining the quality and sector spread of our order book during challenging market conditions.  At 31 December 2010 the order book stood at £1.75 billion, the same level as a year ago.  40% is in the regulated sector, 49% in the public sector and 11% in the private sector. 

We have been encouraged by the projects we have continued to secure in those sectors dependent on public finance, particularly in health and in education.  In the period we were appointed on the £300 million south east hub for Scottish NHS, the £50 million Halton Building Schools for the Future and the £57 million Orkney Schools investment programme.  We have a number of significant commercial sector building contracts in negotiation, particularly in London and the South East.

In water, the AMP5 five year framework programmes that we secured last year are now building up revenue levels well as projects start to come on stream.  We are also benefitting from our ability to secure extra work on top of the frameworks, such as the £60 million Beckton Waste Water treatment works for Thames Water which added to the £280 million already secured by our construction joint venture.

Cash

Net debt at 31 December 2010 was better than forecast at £30 million (30 June 2010: £76.5 million net cash, 31 December 2009: £100 million net cash).  The cash balances held by construction remain significant and have reduced less than anticipated in relation to current revenue levels.  In housebuilding we have continued with our land spend, particularly in the South East, and increasing the development spend on existing sites where work in progress has built up from the particularly low level that existed at our previous financial year end on 30 June 2010.  We plan to be selling from 30% more outlets by 30 June 2011.

Outlook

While the economic outlook is still uncertain, the board continues to be encouraged by the progress being made in housebuilding and by the resilience of the Group's construction business.  While remaining cautious in the short term, the Group is confident in its strategy for delivering the objectives of its expansion plan.

 

END

 

 

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