Trading Statement

RNS Number : 3350V

Galliford Try PLC

11 January 2012

 



11 JANUARY 2012

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 2011.  The group expects to announce its results for the half year on 22 February 2012.

Highlights

·      Housebuilding

·      59% increase in total completions to a record 1,352 units; 1,216 net of joint venture partners' share (2010: 851 and 779).

·      42% increase in total sales reserved, contracted and completed at £522 million (2010: £367 million).  £416 million is for the current financial year to 30 June 2012.

·      36% increase in unit sales per outlet per week to 0.45 (2010: 0.33).  Selling outlets increased to 86 (2010: 65).

·      75% of 10,400 plot landbank now secured at current market values (31 December 2010: 62% of 9,500).

·      Construction

·      100% of projected revenue for current financial year secured with 62% for year to 30 June 2013 (31 December 2010: 96% and 58% respectively).

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

·      41% of order book in regulated sector, 45% in public and 14% in private maintains a quality spread of future revenues.

Greg Fitzgerald, Chief Executive, commented:

"The board has been encouraged by the progress in housebuilding as our southern biased business performed strongly despite the general economic uncertainty.  The spread of long term work in the Group's construction business is underpinning its resilience in challenging market conditions.  The Group therefore remains on track to meet its expectations for the financial year."

For further enquiries please contact:

Galliford Try -                             Greg Fitzgerald, Chief Executive              01895 855001

                                                Frank Nelson, Finance Director

Tulchan Communications -          Christian Cowley, James Macey White     020 7353 4200

Housebuilding

The housing market, particularly in our key geographic locations in the south of England, has remained impressively resilient from the start of the autumn selling season to the end of December.  This is despite persistently negative economic news, and our performance demonstrates both the ability of purchasers of our homes to secure mortgage finance as we have a lower than average proportion of first time buyers, and the relative economic strength of the areas we have chosen to focus on. 

Our three year expansion plan for housebuilding, which comes to fruition this financial year, has been based on substantially growing our landbank and delivering increased unit sales from more outlets.  During the six months we achieved a rate of sale up 36% to 0.45 unit sales per outlet per week on a 32% increase in the number of outlets, resulting in an 86% increase in actual sales reservations made compared to the same period last year.  With sales prices remaining in line with our expectations and with sales reserved, contracted and completed up 42% to £522 million, of which £416 million is for the current financial year (representing 68% of projected sales for the year (2010: £246m, 63%)) we are on track to deliver our plan results this year. 

Our average selling price on private sales was up 17% at £239,000 (2010: £204,000) reflecting an increased proportion of sales in the south east of England.  The average selling price for affordable sales was £102,000 (2010: £110,000) leading to a combined average selling price of £203,000 (2010: £178,000).  Cancellation levels were around the long term average at 18% (2010: 20%).

Mortgage availability continues to ease.  We welcome the Government's intention to support the provision of a 95% loan to value mortgage scheme that will widen the base of potential home buyers.  We are playing our part in working on the scheme with Government, industry and lenders, and hope it can be made available in time to capture the spring 2012 selling season.

Our total landbank at 31 December 2011 was 10,400 plots (2010: 9,500) of which 7,800 plots, or 75% of our total landbank, have been acquired under current market conditions compared to 62% a year ago.  We have 2,100 plots with terms agreed in the pipeline, putting us in a good position to meet our projected requirements for the next financial year ending in June 2013. 

We cemented our position as a leading player in the affordable housing market during the period by securing direct funding awards totalling £17 million under the Government's 2011-2015 national affordable housing programme, one of the largest awards made to date to a private developer.

Construction

At 31 December 2011 we had secured 100% of our projected revenue for the current financial year and 62% for our next financial year (31 December 2010: 96% and 58% respectively).  As we anticipated, the construction market has become even more challenging during the period and we have rigorously maintained our focus on securing work with an acceptable risk and return profile ahead of maintaining the absolute level of our order book.  Our total order book at the period end was in line with our expectations at £1.6 billion (2010: £1.75 billion), of which 41% is in the regulated sector, 45% in the public sector and 14% in the private sector.

63% of our order book is in frameworks or has been secured on a basis other than in pure price competition, underpinning the relative resilience of our business.  This is exemplified by the work being undertaken for our water clients as we approach the mid point of the five year asset management plan cycle.  We have been encouraged by the Government's announcement in the autumn budget statement that it will be proceeding with the financing of a number of major infrastructure projects and are working on bringing those that are in our pipeline of potential future contracts to fruition.

Cash

Net debt at 31 December 2011 was in line with our forecasts at £70 million (2010: £30.7 million).  The increased investment in land and work in progress on our housebuilding sites is in line with our forecasts as we deliver the final year of our housebuilding expansion plan.  The cash balance held by our construction business remains significant, albeit reducing during the period as we anticipated due to the tighter market conditions. 

Company Secretary

Richard Barraclough, Company Secretary and a member of our executive board, has decided to retire early after 22 years with the Group during which time he has made a substantial contribution to the business.  We are delighted that Kevin Corbett will be joining our executive board in February from AECOM Limited, where he was Chief Counsel, Global, and will be appointed Company Secretary and Legal Director with effect from 1 March 2012.

Outlook

The board has been encouraged by the performance in housebuilding as our southern biased business performed strongly despite the general economic uncertainty.  The spread of long term work in the Group's construction business is underpinning its resilience in challenging market conditions.  The Group therefore remains on track to meet its expectations for the financial year.

 

END

 

 

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