Topic business
Date 31 Mar 2020
Galliford Try provides an operational update on the impact of the Covid-19 pandemic on its business and the measures it is taking in response.
The health and safety of our staff, subcontractors, suppliers, clients and the public is paramount, and in compliance with Government guidance we are implementing additional measures to protect and mitigate risk.
Management response
Across the Group we are working with the NHS and others to assist and support them to increase capacity to meet the current challenges and immediate needs.
In accordance with Government advice on construction works and the Standard Operating Procedures issued by the Construction Leadership Council, we have risk assessed every one of our construction sites and modified or curtailed site activities to ensure that no work is undertaken if we are unable to fully comply with the hygiene and social distancing guidelines or if our people cannot travel safely to work. Sites that remain operating do so under the strictest of parameters, as set out by the Construction Leadership Council, in conjunction with our own rigorous risk assessments. In addition, where specific client instructions have been received, we are carefully managing temporary closure of sites to leave them in a safe state whilst they are closed.
Where projects are temporarily suspended, we are planning for the speedy resumption of works as soon as conditions allow. We are continuing to monitor the situation and liaise with our clients, and support our supply chain, on all projects.
We have already taken a number of actions to manage costs in the business and conserve cash, and we will continue to review our resources to match business requirements. The business expects to make use of the Government Coronavirus Job Retention Scheme and other measures announced by the Government in response to the pandemic. The Group is committed to fully supporting all staff and has implemented furloughing of personnel where appropriate.
The scale and duration of disruption to our activities, and the impact on our supply chain, is not yet clear. For this reason, it is too early to quantify the potential impact of Covid-19 on revenue and operating profit, and hence it is not possible at the present time to provide guidance for our financial years ending 30 June 2020 and 30 June 2021.
Balance sheet and dividend
Galliford Try remains a well-capitalised business with no debt or bank covenants. The Government is continuing to support our sector, for example through the Cabinet Office Procurement Policy Note which provides guidance on payment by public bodies during the Covid-19 outbreak, and 83% of our order book is in the public and regulated sectors. The Group's cash levels remain in line with management's expectations, with average month end cash for the second half of the financial year to 30 June 2020 expected to remain over £100m, and the Group continues to hold a PPP portfolio of £39m. The Group is implementing additional measures, including the furloughing of personnel referred to above, to manage its working capital and preserve its liquidity through this period of disruption. The Board is continuing to monitor developments closely and is confident that the Group is well placed to withstand the current period of uncertainty and positioned to deliver as the market recovers. In the prevailing circumstances the Board considers it prudent to cancel payment of the interim dividend of 1.0p per share announced on 12 March 2020. The Board will at the appropriate time consider paying the interim dividend with the final dividend.
Bill Hocking, Chief Executive of Galliford Try, commented: "These are extremely challenging times and our upmost priority remains the health and safety of our employees and the wider community. We are a well-capitalised business, taking all necessary steps through the present circumstances to ensure that we are well placed to support economic recovery."