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Date 14 Feb 2018
GALLIFORD TRY PLC - HALF YEAR REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
STRONG FIRST HALF PERFORMANCE
|Financial||H1 2018||H1 2017||Change|
|Revenue £m ¹||1,495||1,308||+ 14%|
|Group revenue £m ¹||1,403||1,235||+ 14%|
|Profit before tax £m||56.3||63.0||- 11%|
|Pre-exceptional profit before tax £m 2, 3||81.3||63.0||+ 29%|
|Earnings per share
|Pre-exceptional earnings per share 2, 3
|Dividend per share
|Net debt £m
|Group return on net assets 4
|Pre-exceptional Group return on net assets 5
- Continued progress on operating margin, rising to 18.5%, with no land sales in the period (H1 2017: 18.2% and 16.3% excluding profits from land sales).
- Revenue up 7% to £436.8m (H1 2017: £407.6m) from 1,587 unit completions, 1,346 units net of joint venture partner share (H1 2017: 1,491 and 1,319 respectively). Total sales currently reserved, contracted and completed at £879m (H1 2017: £857m).
- Good first half sales rate at 0.53 (H1 2017: 0.56); sales rate of 0.65 since 1 January 20186 (H1 2017: 0.70 since 1 January 2017).
Partnerships and Regeneration
- Significant increase in revenue, both organic and from the Drew Smith acquisition, up 55% in total to £223.5m (H1 2017: £144.3m).
- Excellent progress on operating margin rising to 4.8% (H1 2017: 3.4%).
- Total sales currently reserved, contracted and completed up 40% at £129m6 (H1 2017: £92m) with continuing strengthening of the contract order book, up 41%, at £1.3bn (H1 2017: £925m).
- Revenue of £823.6m (H1 2017: £742.0m) and pre-exceptional operating margin improved to 0.9% (H1 2017: 0.4%).
- Additional joint venture contributions arising from Carillion plc (Carillion) failure prompt exceptional charge of £25m.
- Cash balance of £44.5m (H1 2017: £110.8m) reflecting the anticipated cash flow constraints on legacy projects. Estimate of additional cash contribution to the joint venture in respect of Carillion unchanged at £30m - £40m.
- High quality order book maintained at £3.5bn (H1 2017: £3.4bn).
- Net debt of £85m (H1 2017: £114m), with average net debt of £203m (H1 2017: £231m), and committed facilities of £550m.
- The Group continues to operate well within its banking covenants, and maintains a minimal pension deficit of £2.7m (H1 2017: £10.6m).
- Underwritten standby equity capital raise of £150m announced separately.
- Planned increase in dividend cover to 2.0x pre-exceptional earnings brought forward and effective immediately. Interim dividend of 28.0p declared.
Peter Truscott, Chief Executive, commented:
"We have delivered a strong financial and operational performance in the first half, with revenue growth across all three businesses and excellent progress against our 2021 strategy.
Linden Homes had a very strong first half, with both volume growth and improving margins. Our strategy of focusing on standardisation is proving to be effective and we continue to benefit from further operating efficiencies. The market continues to be positive, underpinned by good mortgage availability, the Government’s ongoing commitment to Help-to-Buy, and the recent stamp duty cut for first-time buyers. Within Partnerships & Regeneration, we have delivered an excellent first half performance and continue to be very encouraged by the opportunities in the market, which give us confidence that this growing business will continue to deliver sustained returns over the strategy period and beyond. Our underlying Construction business is performing well with the margin drag of legacy contracts reducing.
We have reviewed the impact on our business from the compulsory liquidation of Carillion, which has resulted in a further reassessment of the likely out-turn from our participation in the Aberdeen Western Peripheral Route (AWPR) joint venture, leading to an exceptional charge of £25m. Reflecting the additional financial obligations arising from this contract, we have today announced our plans for a capital raise of £150m. We have also brought forward our plans to increase dividend cover to 2.0x pre-exceptional earnings, with the result that we are today declaring an interim dividend of 28.0p.
We continue to maintain strict control over net debt, which is consequently better than our guided level. We enter the second half of the year with a solid foundation to build on and strong fundamentals for the housing market. While we remain cautious of the impact of the current political uncertainty and the medium-term outlook for the macro economy, we believe our focused strategy, strong order book and disciplined approach will deliver further growth and shareholder value."
This announcement contains inside information for the purposes of article 7 of EU Regulation 596/2014. The person responsible for making this announcement on behalf of Galliford Try is Kevin Corbett, General Counsel and Company Secretary.
|Galliford Try||Peter Truscott, Chief Executive
Graham Prothero, Finance Director
|Clara Melia, Investor Relations||020 3289 5520|
|Tulchan Communications||James Macey White, Martin Pengelley, Elizabeth Snow||020 7353 4200|
Notes to editors:
Galliford Try will hold its half year results presentation for analysts and institutional investors at 09:30 am on Wednesday 14 February 2018 at the London Stock Exchange, 10 Paternoster Row, London, EC4M 7LS. An audio webcast will be available at
http://webcast.openbriefing.com/gallifordtry with a recording available later.
1 ‘Revenue’ includes share of joint ventures’ revenue of £92.5m (H1 2017: £72.3m). ‘Group revenue’, where stated, excludes share of joint ventures.
2 Pre-exceptional measures exclude exceptional costs as described in note 4. All future references to pre-exceptional data or ratios are consistent within this definition.
3 Exceptional costs in H1 2018 were £25.0m. There were no exceptional costs in H1 2017.
4 Group return on net assets represents annualised profit before tax, exceptional items, finance costs and amortisation divided by average net assets.
5 Pre-exceptional Group return on net assets represents pre-exceptional profit before tax, finance costs and amortisation divided by average pre-exceptional net assets.
6 Current as at 12 February 2018.