Date 11 Sep 2019
GALLIFORD TRY PLC ANNUAL RESULTS STATEMENT FOR THE YEAR ENDED 30 JUNE 2019
GROUP PERFORMANCE IN LINE WITH EXPECTATIONS
|Revenue1 (including share of joint ventures)||£2,863m||£3,132m|
|Pre-exceptional profit before tax2,3||£155.5m||£188.7m|
|Profit before tax||£104.7m||£143.7m|
|Pre-exceptional earnings per share2,3
|Earnings per share
|Full year dividend per share
|Pre-exceptional Group return on net assets4
|Group return on net assets5
- Strong progress against strategic operational targets in all three businesses
- Pre-exceptional profit before tax2,3 of £155.5m in line with previous guidance
- 6,507 total new homes built by Linden Homes and Partnerships & Regeneration (2018: 6,193)
- Average net debt at £186m (2018: £227m)
- Strong sales in hand across Linden Homes and Partnerships of £677m (2018: £698m)
- Full year dividend payment of 58.0p (2018: 77.0p), covered 2.0x by pre-exceptional profits
- Opportunity to strengthen and advance all three businesses through the potential transaction with Bovis Homes Group PLC
- Maintained strong margin of 19.6% (2018:19.5%) and four-star housebuilder status
- Continued progress against objectives of standardisation of units and process
- 3,229 completions6 (2018: 3,442) at a lower average selling price, generating revenue of £820m (2018: £947m) and operating profit of £160.5m (2018: £184.4m)
- 0.56 sales rate per outlet per week (2018: 0.59) from lower average outlets with sales reserved, contracted or completed of £474m7 (2018: £510m)
- 12,600 plot landbank7,8 (2018: 11,830), estimated to be around 3.5 years’ supply
Partnerships & Regeneration
- Excellent progress against strategy of extending geographic coverage and growing margins
- Strong profitable growth with mixed-tenure revenue up 55% to £192m, from 1,178 completions6 (2018: £124m and 751 completions respectively) and contracting revenue of £431m, up 23% (2018: £351m)
- 5.6% operating margin (2018: 5.0%), generating a 47% increase in operating profit to £34.8m (2018: £23.6m)
- £1.0bn7 contracting order book (2018: £1.2bn) and mixed-tenure sales reserved, contracted or completed of £203m7 (2018: £188m)
- 5,400 plot landbank7(2018: 3,760)
- Restructured and refocused to deliver improved future performance
- Pre-exceptional revenue of £1,387m as the business focuses on core sectors (2018: £1,687m)
- Results impacted by contract write-downs and restructuring costs previously announced
- £2.9bn7 order book (2018: £3.3bn), reflecting improved focus
Graham Prothero, Chief Executive, commented:
“The Group has continued to perform well and our talented teams across the businesses have delivered a good performance despite the challenges faced.
We continue to make great progress in Linden Homes, focusing on the benefits of standardising our range and rationalising process. We are building homes more cost effectively while delivering well-designed, high quality units which meet our customers’ needs, as reflected in our improving satisfaction scores. We continue to head towards our target of 80% of completions being Linden Collection.
Partnerships & Regeneration has continued its excellent performance with both revenue growth and margin expansion, as we increase our delivery of affordable new homes. The acquisition of Strategic Team Group in Yorkshire accelerates our strategy of targeting growth in key regions around the country. We continue to see strong demand across the regions, and we are well placed to respond to this, working alongside Housing Associations, local authorities and other partners.
Construction’s result for the year has been impacted by challenges with both legacy and some current projects and by the restructure, which is now complete. The business continues to see good demand in its Building and Infrastructure divisions and is focusing on disciplined growth across its core sectors of building, water and highways, which we believe will deliver improved margins.
The potential combination of our Linden Homes and Partnerships businesses with Bovis Homes represents a superb opportunity, enhancing the prospects for all three of our businesses to thrive as strategically focused and well-financed operations with excellent opportunities for growth. The transaction allows Construction to continue trading as a standalone well capitalised business.”
This announcement contains inside information.
|Galliford Try plc||Graham Prothero, Chief Executive
Andrew Duxbury, Finance Director
|Tulchan Communications||James Macey White
|020 7353 4200|
1 ‘Revenue’ includes share of joint ventures’ revenue of £249.7m (2018: £200.7m) and excludes revenue from part exchange properties of £100.7m (2018: N/A9). ‘Group revenue’ where stated excludes share of joint ventures and includes revenue from sales of part-exchange properties.
2 Pre-exceptional measures exclude exceptional costs as described in note 5. All future references to pre-exceptional data or ratios are consistent with this definition.
3 Exceptional costs in 2019 were £50.8m. Exceptional costs in 2018 of £45.0m.
4 Pre-exceptional Group return on net assets represents pre-exceptional profit before tax, finance costs and amortisation divided by average pre-exceptional net assets.
5 Group return on net assets represents profit before tax, finance costs and amortisation divided by average net assets.
6 Completions net of joint venture partner share were 2,781 (2018: 2,903) for Linden Homes and 837 (2018: 564) for Partnerships & Regeneration.
7 As at 9 September 2019. All future references to this data are for the same period.
8 Linden Homes landbank includes 4,024 plots (2018: 3,276) representing Linden Homes share of plots held in joint ventures.
9 Following the introduction of IFRS15 with effect from 1 July 2018, Group revenue includes sales of part-exchange properties with a total of £100.7m in the year to 30 June 2019. (£98.7m in Linden Homes and £2.0m in Partnerships and Regeneration). Previous periods have not been restated to include part-exchange revenue (see notes 2 and 23).
Galliford Try will hold its results presentation at 09:30 am on Wednesday 11 September 2019 at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS. A live audio webcast will be available at https://webcast.openbriefing.com/gallifordtry-fyr19/