Trading Statement

RNS Number : 6549L

Galliford Try PLC

13 January 2016

 



13 JANUARY 2016

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 2015.  The Group expects to announce its results for the half year on 25 February 2016.

Group

·      All three of our businesses are trading well, in line with our expectations, in positive market conditions.

·      Total housing units completed (Linden Homes and Galliford Try Partnerships) of 1,603 (2014: 1,529).

·      Record in hand position with total sales reserved, contracted and completed at £740 million (2014: £645 million).

·      Landbank at 15,400 units, in line with our strategy (31 December 2014: 14,050 units).

·      Net debt increased to £95 million (31 December 2014: net debt of £35.9 million), reflecting additional investment in Linden Homes and Partnerships in accordance with plan.

Linden Homes

·      Good progress achieved on operating margin both against the corresponding period and the full year.

·      Revenue is expected to be 5% higher than the prior half year period, from 1,357 unit completions, 1,171 net of joint venture partners' share, broadly in line with the comparative levels (2014: 1,364 and 1,278).  Within this total, private sales were higher, while affordable sales of 233 units were lower than the previous period (31 December 2014: 380 units).

·      Average outlets increased to 76 (6 months ended 31 December 2014: 58; year ended 30 June 2015: 62).

·      Average selling price for private sales up 8% at £334,000 (2014: £310,000). The average selling price for affordable sales was £110,000 (2014: £121,000) producing a combined average selling price of £295,000 (2014: £259,000).

·      Average unit sales per outlet per week at 0.57 for the six months was ahead of last year (31 December 2014: 0.51).

·      Initiatives to rationalise operating processes targeting a reduction in overheads by approximately £5 million on an annualised basis, with the effect at least earnings neutral in the current financial year, and with the full savings expected in FY2017.

·      Bringing forward plans for an additional business unit in West Yorkshire, building on the successful integration of Shepherd Homes.

Galliford Try Partnerships

·      Contracting revenue in the first half below the prior year, reflecting some delays in procurement by registered providers immediately following the changes announced in the Summer Budget.  The impact of these changes has now largely been assimilated, with the effect likely to be positive for our business.

·      Operating margin likely to be ahead of prior half year, reflecting progress in increasing the proportion of mixed tenure.

·      Considering options to accelerate the growth of the business, including bringing forward the opening of a sixth office into this calendar year.

Construction

·      Order book increased to £3.7 billion (2014: £3.2 billion) in an improving market.

·      98% of projected revenue for the current financial year secured with 66% for the year 30 June 2017 (31 December 2014: 98% and 67% respectively).

·      We continue to make progress in concluding legacy contracts whilst seeing improved margins on new work.

·      Continued strong performance on cash.

Peter Truscott, Chief Executive, commented:

"I am delighted to report that all of our businesses continued to trade well in the first half of the year to 30 June 2016. Market conditions have remained positive, with build cost increases stabilised to a manageable level.

In Linden Homes we have improved our margins and increased outlet numbers and unit sales per outlet. In Partnerships we continue to make progress in line with our strategy, and are considering whether we can expedite that growth. In Construction our order book remains strong, with good visibility on projected revenue for the rest of this year and next.

It is now two years since Galliford Try adopted its clear plan for disciplined growth to 2018.  In my first few months as CEO, I am happy that these are the right medium term targets.  I am working with each of the businesses to ensure we achieve these, and to consider the longer term aims.

As we look ahead to the second half of the year, we are in a strong position to deliver results in line with our expectations."

For further enquiries:

Galliford Try                                                          Peter Truscott, Chief Executive                                                    01895 855001

                                                                                Graham Prothero, Finance Director

Tulchan Communications                                 Martin Pengelley, James Macey-White, Giles Kernick            020 7353 4200

 

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