Galliford Try PLC
31 October 2003
31 October 2003
GALLIFORD TRY PLC
ANNUAL GENERAL MEETING STATEMENT
Tony Palmer, Chairman of Galliford Try plc, will make the following comments at
the annual general meeting of the Company to be held at 12:00 noon today:
'Since announcing our results for the year to 30 June, the Group has continued
to build on the momentum generated in the second half of last year. We are
making our anticipated progress and I would reiterate the comment I made in my
Chairman's statement that this would form the basis for the directors'
expectation of paying a progressive dividend for this financial year.
Against this background, the board announced on 30 September that it had
rejected an indicative and highly conditional proposal from Rok property
solutions to acquire the Company at 51p per share. At Rok's request, we met
with them early last week. During the meeting Rok reconfirmed its proposal of
51p per share but indicated that it would consider a price of up to 54p per
share depending on the outcome of due diligence. The proposal was confirmed to
us in writing on 27 October. It remains highly conditional, particularly in
respect of financing and due diligence, with the price to be satisfied as to
£25-30 million in new Rok shares and the balance in cash. Rok has indicated
that it would be prepared to offer an underwritten cash alternative at an
unspecified discount for the share element. As at yesterday, £30 million
represents over 45% of Rok's market capitalisation.
The board, together with its advisers, has carefully considered this proposal.
It firmly believes that it cannot be recommended to shareholders as it
significantly undervalues the Company. Accordingly the proposal is rejected.
The board is determined to deliver on its obligation to maximise value for
shareholders. We are pro-actively considering, with our advisers, how this can
best be achieved. We will also continue to consider carefully any proposal that
is put to us.
Moving now to our operating performance, I am pleased to report that the good
progress being made by our construction division has continued. The streamlined
management structure and the rationalisation of the division into six clearly
focussed business units put in place following the appointment of Andy Sturgess
as Managing Director of construction early this year is working well. We are
now seeing the benefits of a more efficient cost base.
We are winning new work in exactly the market sectors we are targeting. The
award in September of our contract as part of the consortium to deliver Scottish
Water's four year, £1.8 billion asset management project cemented our position
as one of the top five construction providers to the water industry. We are
already working on the project's first schemes.
Our position as leaders in partnership contracting has also been endorsed in the
last month by our selection as preferred construction partner on our first NHS
local improvement finance trust project for Coventry primary care trust, with an
initial workload of £42 million. We anticipate announcing preferred partner
appointments on a further two LIFT projects shortly. Overall, our current order
book is £664 million of which 76% is in the public and regulated sectors and 87%
has been secured on a non competitive basis. Our objective is to make
predictable and progressively growing profits from construction. With the work
we are winning, and our transformed management structure, the Board is confident
that we are on track.
Housebuilding has consistently turned in excellent profits. Following a record
performance last year, I am pleased to report that sales in the financial year
to date are ahead of last year, with a total of £103 million now secured for the
year to 30 June 2004, up 11% on a year ago.
Our plans envisage significant growth of the division over the medium term based
on our extremely successful housebuilding formula. Led by Greg Fitzgerald,
appointed Managing Director of housebuilding in July 2003, the objective is to
maximise profits by developing our existing regions organically, geographic
expansion and acquisition.
In the first three months of this financial year we have acquired new sites for
a total of 254 homes, and our planned expansion of Midas Homes eastwards has
made a good start with three sites for over 100 homes already owned or
controlled. The infrastructure on our major joint venture site at Fairfield is
well underway. The first two housebuilders have drawn down the initial tranches
of land, and Stamford Homes has started production with the first homes
scheduled for completion this financial year.
We said at the year end that we had consents in place for all our planned
production for this financial year. Applications often go to appeal and, last
month alone, we obtained consents in the south east for 54 units on three
brownfield sites, with the planning inspectors citing quality of design and best
use of the site in all cases. With reasonable market conditions continuing, we
expect to make progress for the remainder of the year.
The Group has made an excellent start to the new financial year. We have clear
strategies in both construction and housebuilding and a management team that has
the determination and ability to drive the business forward. The Group now has
real momentum.
Tony Palmer
Chairman
The Directors of Galliford Try plc accept responsibility for the information set
out above. To the best of the knowledge and belief of the Directors (who have
taken all reasonable care to ensure that such is the case) the information set
out above is in accordance with the facts and does not omit anything likely to
affect the import of such information.
Enquiries:
Ann-marie Wilkinson/James Chandler 07730 415019/0207 398 3300
Beattie Financial
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