The Group employs around 5,500 employees and benefits from a strong client base and integrated supply chain, spanning both industries in which it operates.

Our Business Model & Strategy

Strategy to 2018

At the start of 2014 the Board reviewed its strategy against a backdrop of an improving and recovering economy and concluded that a continuation of the Group's disciplined approach to growth would create further substantial value for shareholders. Across all of our businesses we identified disciplined growth opportunities over those five years, some of which we enhanced in February 2015, and operational and financial strategies have been implemented to achieve these growth objectives.

Group strategy

The Group’s ultimate aim is to deliver superior returns to shareholders. To do this, we have a Group strategy with three main elements:

  • Delivering disciplined growth by focusing on the quality of opportunities, prioritising margin and leveraging synergies between Housebuilding and Construction.
  • Operating sustainably, recognising that health and safety and our people are the top two priorities for achieving our 2018 objectives.
  • Generating shareholder return by growing earnings and dividends, and carefully managing our balance sheet.
Housebuilding strategy Progress against strategy

Linden Homes

  • Focus on increasing our operating margin towards 18% by maximising the efficiency and effectiveness of our operations.
  • Deliver disciplined expansion in volumes by continuing to focus on prime sites in prime locations.
  • Increase the predominance of houses over apartments.

Galliford Try Partnerships

  • Continue to grow our contracting revenues.
  • Grow our mixed-tenure revenue by leveraging Linden Homes’ relationships, reputation and development skills.
  • Use the cash generated by Galliford Try Partnerships’ contracting activities to fund mixed-tenure developments.

Landbank

  • Strengthen our landbank across all our Housebuilding activities, building a landbank of around 14,000 plots early in the strategy period and maintaining it at this level to 2018.

Linden Homes

  • Further increased the margin to 16.0%, from 15.1% in 2014, and 13.3% in 2013 and set up Business Improvement Forums to drive further efficiencies across all disciplines.
  • Grew revenue by 3%, including an increase in the average selling price.
  • Maintained Southern focus, while increasing our presence in the Midlands and the North.
  • Acquired Shepherd Homes’ land assets in Yorkshire, including six sites under development.
  • Increased the proportion of larger houses, while slightly reducing the overall number of units completed, reflecting our disciplined approach.

Galliford Try Partnerships

  • Delivered rapid growth in both contracting and mixed-tenure revenues, securing a number of important contract wins and investing cash generated by contracting into mixed-tenure projects.
  • Enhanced our 2018 revenue and margin targets, and announced our intention to allow Galliford Try Partnerships to operate in a net debt position of up to £30 million to accelerate its mixed-tenure growth.

Landbank

  • Took advantage of the continuing favourable land market to further increase the number of plots to a record 15,750, including 515 plots acquired from Shepherd Homes.
  • Secured all the plots needed by Housebuilding for 2016 and 87% for 2017.

Construction strategy Progress against strategy

Building and Infrastructure

  • Retain our discipline and select projects with appropriate risk and cash profiles.
  • Focus on both the public and private sectors, frameworks and increasing our capability in major projects.
  • Target margin improvements.

Investments

  • Target our PPP investment capabilities to support our Construction, Galliford Try Partnerships and Facilities Management businesses.
  • Increasingly become a collaborative investment partner for public sector clients to give us access to a pipeline of projects rather than one-off bids.

Building and Infrastructure

  • Acquired Miller Construction, accelerating our growth, strengthening our position on major frameworks and expanding our geographical presence.
  • Awarded places on a number of major frameworks and continued to win a wide range of new business at appropriate margins.

Investments

  • Substantially increased the scale of our PPP business through the Miller Construction acquisition.
  • Reached financial close on a number of key projects, providing equity investment opportunities and significant additions to the order book for Construction, Galliford Try Partnerships and Facilities Management.

Sustainability strategy Progress against strategy

Health & Safety

  • Implement policies and procedures to establish safe working practices for everyone.
  • Implement programmes to improve employee and subcontractor safety behaviours.
  • Work with our employees to ensure we maintain our culture of care.

People

  • Implement policies and procedures to ensure we have sufficient competent and capable employees.
  • Consult our employees to identify training and development needs and opportunities to improve business performance.
  • Implement programmes to drive fairness, inclusion and respect across the Group.

Health & Safety

  • Our RIDDOR Accident Frequency Rate rose from 0.10 in 2014 to 0.14.
  • Continued to address the behavioural aspects of safety, through our 'Challenging Beliefs, Affecting Behaviour' programme, and reaffirmed a 'back to basics' approach to fundamental health and safety principles.

People

  • Employee churn rate was 18.1%, up from 15.7% in 2014, reflecting increased employee mobility across the industry.
  • Acquisition of Miller Construction brought 600 people into the Group, with a further 59 joining from Shepherd Homes.
  • A culture of fairness, inclusion and respect is supported by enhanced maternity and paternity benefits along with a focus on attracting diverse new talent to the business.

Shareholder return Progress against strategy

Financial management

  • Actively manage cash in Construction and investment in Housebuilding to control the Group’s net debt position.
  • Ensure the Group has the funding to implement its growth strategy through internal cash generation and appropriate debt facilities.

Efficiency

  • Help the divisions to implement their strategies by providing high-quality Group functions, such as health and safety, sustainability and people development, contributing to profit and earnings growth, and the ability to pay higher dividends.

Financial management

  • Grew profit before tax and exceptional items by 24% compared to 2014, leading to a 23% increase in pre-exceptional earnings per share.
  • Continued to focus on cash and working capital management, with a strong cash performance in our Construction business helping to fund further investment in land and work-in-progress in Housebuilding.
  • Year end net debt of £17.3 million, resulting in gearing of 3.0%.
  • Enhanced our progressive dividend policy, leading to a 28% increase in dividend per share to 68.0 pence, with earnings cover of 1.7 times.

Eighteen months after this strategy was adopted we have made excellent progress and remain on track to deliver our growth and margin objectives in each of our housebuilding and construction businesses.