Topic Results
Date 11 Jul 2023
Galliford Try today provides an update on trading for the year ended 30 June 2023. The Group expects to announce its results for the full year on 20 September 2023.
Highlights
- Good progress in the year against our strategic targets, including the successful integration of two acquisitions.
- Full year pre-exceptional profit before tax expected to be at the upper end of current analyst forecasts1.
- Strong performance across all operations with increased revenue and profit before tax.
- Special dividend to shareholders of 12p per share following resolution of a long running dispute, to be paid in October 2023.
- Balance sheet strength, with circa £220m of cash at 30 June 2023 (2022: £219m) and average month-end cash during the financial year of circa £135m (2022: £174m).
- Achieved UN-backed Science Based Target validation of our near-term target to reduce carbon emissions.
- Strong outlook, with a high-quality order book of £3.7bn (2022: £3.4bn) including recent major framework wins. 92% of revenue for the new financial year secured (2022: 90%).
1 The range of analysts' forecasts for pre-exceptional profit before tax for the year ended 30 June 2023 is £22.1m to £23.3m based on forecasts at 1 July 2023. This is stated excluding the c£3m contract settlement write-off previously announced and exceptional costs related to our investment in cloud-based computer software (as previously disclosed).
Current trading
The Group continues to make good operational progress in line with our Sustainable Growth Strategy. This performance has been achieved against a backdrop of macroeconomic challenges, including delays in signing new contracts during calendar year 2022, which are now easing.
We have successfully integrated our acquisitions of nmcn's water businesses, in October 2021, and more recently MCS Control Systems and Ham Baker and we are starting to see the positive impact of these specialist teams in our Environment business and across significant AMP 8 opportunities.
We were pleased to report the resolution of a long running, complex and challenging multi-contract dispute, which resulted in settlement via a cash payment to the Group of £26m, generating an initial cash distribution by way of special dividend to shareholders in October 2023.
We continue to maintain close engagement with our supply chain and clients, successfully managing and mitigating the risks of material shortages and inflation, which are now subsiding. The UN-backed Science Based Targets initiative (SBTi) recently validated our near-term target to reduce carbon emissions and have confirmed that our scope 1 and 2 target is aligned with limiting global warming to 1.5°C, the most ambitious designation available through the SBTi process.
As a result of the strong performance in the financial year-to-date, the Group expects to report full year pre-exceptional profit before tax at the upper end of current analyst forecasts1.
Balance sheet
The year-end cash at 30 June 2023 was circa £220m and, in addition, the Group has a portfolio of PPP assets, no pensions liabilities and no debt or associated covenants. Average month-end cash for the year ended 30 June 2023 was circa £135m (year to 30 June 2022: £174m), in line with the Board's expectations given the recent acquisitions, previous delays in starting new contracts in 2022, our ongoing investment in cloud-based digital systems as previously disclosed, and circa £20m of dividends and other capital returns in the year. As at 7 July 2023 the Group has purchased a total of 6,437,148 shares, for an aggregate consideration of £11.1m.
During the year, and supported by our strong balance sheet, the Group has been successful in winning a number of high quality contracts as well as participation in key sector frameworks. The Group's strong balance sheet is considered to be a real differentiator for our clients and suppliers.
Order book and outlook
The Group's operations are predominantly in the public and regulated sectors and we are well placed to deliver on local and national commitments to improve the UK's economic and social infrastructure.
Our strategy is founded on a disciplined approach to bidding and overall risk management.
In addition to project and framework wins we continue to see a strong pipeline of new opportunities across our chosen sectors. Since January 2023 we have been successful in winning a number of key projects and participation on major frameworks including:
- the £5.1bn Defence Estate Optimisation Portfolio;
- the £4.5bn Southern Construction Framework;
- the £2.5bn Ministry of Justice Constructor Services Framework;
- the £600m Southern Water AMP8 Framework;
- the £140m Carlisle Southern Link Road;
- the £81m Melton Mowbray distributor road; and
- the £75m Brent Cross Residential Project.
The delays to new contract awards seen during 2022 have now eased, contributing to a very strong orderbook at 30 June 2023 and increased level of revenue secured for the new financial year.
Bill Hocking, Chief Executive of Galliford Try, commented: "The Group expects to report another year of strong performance across all its operations with increased revenue and profit before tax and we continue to progress our Sustainable Growth Strategy, supporting our financial targets to 2026.
“An important differentiator for our clients and suppliers is the Group's ability to maintain its balance sheet strength and continue our success in maintaining a high-quality order book in our chosen public and regulated sectors.
“The Group prides itself on a progressive culture that invests in and supports its staff and I am grateful to all our people for their professionalism and work ethic which delivered the performance of the Group during the year.
“During the year we resolved a major dispute enabling a significant initial cash distribution, by way of special dividend, to our shareholders.
“We are excited about new financial year and the opportunity to deliver further strong future performance and long-term sustainable value for all stakeholders."