Date 12 Sep 2018
GALLIFORD TRY PLC ANNUAL RESULTS STATEMENT FOR THE YEAR ENDED 30 JUNE 2018
STRONG UNDERLYING PERFORMANCE DRIVEN BY PROGRESS AGAINST STRATEGIC OBJECTIVES
|Revenue1 (including share of joint ventures)||£3,132m||£2,820m||+ 11%|
|Group revenue1||£2,932m||£2,662m||+ 10%|
|Pre-exceptional profit before tax2,3||£188.7m||£147.6m||+ 28%|
|Profit before tax||£143.7m||£58.7m||+ 145%|
|Pre-exceptional earnings per share2,3,4||158.4p||131.1p||+ 21%|
|Earnings per share4
|Full year dividend per share5
|Group return on net assets6
|Pre-exceptional Group return on net assets7
- Very strong underlying performance reflecting excellent progress made against strategy to 2021
- 6,193 total new homes built by Linden Homes and Partnerships & Regeneration (2017: 5,490)
- Sales order books in Linden Homes and Partnerships & Regeneration robust at £698m (2017: £638m)
- Successful 1 for 3 rights issue in April 2018 resulting in net proceeds of £150m
- Average net debt at £227m (excluding the rights issue proceeds)
- Full year dividend payment of 77.0p (2017 restated: 86.0p), covered 2.0x by pre-exceptional profits in line with policy announced at the rights issue
- Pre-exceptional return on net assets improved to 29.2% from 27.5%
- On track to achieve Group 2021 strategic targets with adjustments to divisional targets
- Excellent progress against our objectives, generating an improved operating margin of 19.5% (2017: 18.2%) and operating profit up 8% to £184.4m (2017: £170.3m)
- 3,442 completions8 (2017: 3,296), revenue up to £947m (2017: £937m)
- 0.59 sales rate per outlet per week (2017: 0.62) with sales reserved, contracted or completed of £510m9 (2017: £545m)
- 11,830 plot landbank9,10 (2017: 11,250), estimated to be around 3.5 years’ supply
Partnerships and Regeneration
- Continuing strong profitable growth with mixed-tenure revenue up 51% to £124m, from 751 completions7 (2017: £82m and 594 completions respectively) and contracting revenue of £351m, up 42% (2017: £248m)
- Operating margin improved to 5.0% (2017: 4.5%), generating a 58% increase in operating profit to £23.6m (2017: £14.9m)
- £1.2bn9 contracting order book (2017: £1.05bn) and mixed-tenure sales reserved, contracted or completed of £188m9 (2017: £93m)
- 3,760 plot landbank9, up 39% (2017: 2,700)
- Pre-exceptional margin improved to 0.9%, on revenue of £1,687m (2017: 0% and £1,527m respectively)
- £26m net debt (2017: net cash £137m), reduction primarily reflecting cash funding of Aberdeen Western Peripheral Route (AWPR)
- Good progress on the AWPR contract, with the vast majority of the road complete, significant sections already opened to traffic and final completion expected in late Autumn. Construction result impacted by exceptional charge of £45.0m from the contract, in line with earlier guidance
- £3.3bn9 risk managed high-quality order book (2017: £3.6bn)
Peter Truscott, Chief Executive, commented:
"We have delivered a very strong underlying performance during the year, driven by excellent progress towards our strategic objectives across all three businesses.
Linden Homes continued to prioritise margin growth, benefiting from further standardisation and the robust control of overheads. This resulted in increased profitability in a year with modest house price inflation. Volumes also grew reflecting the strength of our product offering, and with the sector supported by Help to Buy, good mortgage availability and the cut in stamp duty for first-time buyers. The land market continues to be favourable, allowing us to buy land at robust margins, in the right locations for our new standardised product.
Partnerships & Regeneration achieved strong growth in both revenue and margin, with excellent contributions from the new businesses in Southampton, Bristol and East Midlands. The business has a strong order book and continues to see growing demand across all regions with opportunities in both contracting and mixed-tenure.
The underlying Construction business performed well and continues to see a pipeline of suitable opportunities, with new projects delivering improved margins. We have made good progress towards completion of the AWPR contract, with significant sections of the road open to traffic and the final section expected to be open by late Autumn 2018.
The rights issue in April has strengthened the balance sheet and ensures that the Group's businesses are well positioned, with the appropriate capital, to deliver on their respective growth opportunities in line with our Strategy to 2021."
This announcement contains inside information.
|Galliford Try plc||Peter Truscott, Chief Executive
Graham Prothero, Finance Director
|Tulchan Communications||James Macey White / Martin Pengelley / Elizabeth Snow||020 7353 4200|
1 ‘Revenue’ includes share of joint ventures’ revenue of £200.7m (2017: £158.1m). ‘Group revenue’ where stated excludes share of joint ventures.
2 Pre-exceptional measures exclude exceptional costs as described in note 3. All future references to pre-exceptional data or ratios are consistent with this definition.
3 Exceptional costs in 2018 were £45.0m. Exceptional costs in 2017 of £88.9m.
4 2017 restated due to rights issue (note 7)
5 2017 restated due to rights issue (note 6)
6 Group return on net assets represents profit before tax, finance costs and amortisation divided by average net assets.
7 Pre-exceptional Group return on net assets represents pre-exceptional profit before tax, finance costs and amortisation divided by average pre-exceptional net assets.
8 Completions net of joint venture partner share were 2,903 (2017: 2,876) for Linden Homes and 564 (2017: 444) for Partnerships & Regeneration.
9 As at 10 September 2018. All future references to this data is for the same period.
10 Linden Homes landbank includes 3,276 plots (2017: 2,737) representing Linden Homes share of plots held in joint ventures.
Galliford Try will hold its results presentation at 09:30 am on Wednesday 12 September 2018 at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS. A live audio webcast will be available at http://webcast.openbriefing.com/galliford_FY18/. Recorded interviews with Peter Truscott and Graham Prothero, regarding the full year results will be available on the Group’s website: www.gallifordtry.co.uk from Wednesday 12 September 2018.
Capital Markets Day
The housebuilding businesses, Linden Homes and Partnerships & Regeneration, will host a Capital Markets Day for institutional investors and analysts in London on 11 October 2018.