Galliford Try Annual Report and Financial Statements 2023
GT
ACADEMY
L
E
A
D
E
R
S
H
I
P
V
A
L
U
E
S
B
A
S
E
D
B
E
H
A
V
I
O
U
R
A
L
F
R
A
M
E
W
O
R
K
Early Careers
Development
Leadership
& Management
Development
Commercial
Skills
Development
Project
Management Skills
Development
Technical &
Compliance
Training Skills
Personal
Development
Professional
Development
Career Paths
13,528
training days during the year.
Learninganddevelopment
We use the 70:20:10 methodology to help drive
employee development. This comprises 10% formal
training, 20% learning from others and 70% learning
on-the-job. Our approach is delivered through the
GT Academy, a platform that brings together resources,
training and guidance with our own structured
programmes and extensively developed Career Paths
that define the core learning needed for various roles
and the path to get there.
We delivered a total of 13,528 training days during
the year (2022: 10,588), equivalent to 3.6 days per
employee (2022: 3.3).
Looking forward
Our focus for the next year will be to:
+Develop an EDI strategy, including the
development and implementation of EDI
policies and procedures, and education
and training programmes to ensure
the organisation remains an inclusive
workplace for all.
+Set-up a business-wide EDI steering
group that assists in upskilling key
individuals across the Group, and
providing support to all areas of the
business where required, including
supply chain engagement.
+Continue to work on our EVP and
promote internal mobility.
+Repackage our learning and development
offering to improve visibility of the
options available to employees.
+Launch a new careers website to help
sell our offer to potential employees.
4
half-daymodules.
4
peer learning groups.
Strategy in action
Enabling managers
Managers provide the link between organisational
vision and strategy execution and play a pivotal
role in leading their teams to deliver higher
performance. In recognition of this, we launched
‘Leading the GT Way’, a bespoke programme,
designed and delivered to ensure our managers
are equipped with a toolkit of leadership skills
and techniques to support and enable them
to be successful in their roles. The programme
comprises four half-day modules and four one-
hour peer learning groups.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
29
Galliford Try
Our Sustainable Growth Strategy continued
Socially
responsible delivery
Our approach to protecting the
environment and biodiversity, tackling
climate change and being a valued
member of the communities we work
in is key to achieving our aspirations.
£328m
of Social and Local
Economic Value
created through
the work we do.
2030
target for net zero
carbon emissions
within our own
operations.
30
Galliford Try Annual Report and Financial Statements 2023
Calendar year 2021 5,530
Scope 1 and 2 carbon emissions
on a like-for-like basis
1,2
(CO
2
e tonnes)
Scope 3 verified carbon emissions
2
(CO
2
e tonnes)
Full Scope 3 estimated
carbon emissions
2
(CO
2
e tonnes)
Scope 1 and 2 carbon emissions
2
(CO
2
e tonnes)
Calendar year 2021 6,041
Calendar year 2021 487,220
Calendar year 2020 not measured
Calendar year 2020 not measuredCalendar year 2020 not measured
Ambition: YoY decrease
Calendar year 2022 21.8
Waste intensity
2
(tn/£100k revenue)
Calendar year 2021 21.0
Calendar year
Ambition: Net zero by 2030
1 Like-for-like emissions exclude from all years, the impact of the acquisitions in 2021 and 2022, and minor changes made to the Scope 2 methodology in 2022 to: include an
estimate of energy consumption in offices where the electricity usage is included in the rent/service charge; to use mileage claim data to calculate emissions from electric
vehicle charging; and to exclude consumption for our FM clients where we pay the bill, as these should not have been included.
2 Carbon dioxide equivalent emissions and waste intensity are reported by calendar year, therefore the emissions reported for FY23 relate to the calendar year 2022.
Since 2014, our reported emissions have been externally verified to the ISO 14064-3 assurance standard.
Scope 3 verified carbon emissions
on a like-for-like basis
1,2
(CO
2
e tonnes)
Calendar year 2022 7,055
Ambition: Net zero by 2045
Calendar year 2022 8,760
Calendar year 2022 477,042
Ambition: Net zero by 2045
Ambition: Net zero by 2045
Ambition: Net zero by 2030
2020 7.6
Calendar year 2022 9,604
Calendar year 2021 10,176
Calendar year 2020 11,424
Calendar year 2022 11,822
Calendar year 2021 10,795
Calendar year 2020 11,525
Environment
and climate change
Our objective is to adopt sustainable resourcing and consumption
practices and take measures to mitigate carbon production and
climate change to protect our environment and biodiversity.
Performance in the year
Scope1and2carbonemissions
Our Scope 1 emissions predominantly
relate to fuel use in company cars and vans
and on-site plant and equipment. Scope 2
emissions relate to consumption of electricity
in our sites and permanent offices.
On a like-for-like basis, excluding the impact
of the acquisitions in 2021 and 2022, and
minor changes (see footnote 1 above) made
to the Scope 2 methodology in 2022, our
Scope 1 and 2 emissions showed a 5.6%
reduction, from 10,176 tonnes of carbon
dioxide equivalent emissions in 2021 to 9,604
in 2022, continuing our downward trajectory
since we first started reporting in 2012.
Our performance reflects a number of
ongoing initiatives including:
+A reduction in the amount of diesel
used to power plant and equipment
on our sites.
+Earlier connections of sites to mains
electricity supply.
+More energy efficient site office and
welfare cabins.
+A transition to an electric and plug-
in hybrid vehicle company car fleet
following which, at 30 June 2023, 79%
of the 1,512 vehicles in our company car
fleet were electric or plug-in hybrid and
the average emissions per vehicle had
reduced to 30.0g/km (30 June 2022:
60.1g/km).
Including the acquisitions and Scope 2
methodology changes, we saw a 9.5%
increase in our Scope 1 and 2 carbon
emissions from 10,795 tonnes in 2021
to 11,822 tonnes in 2022. We have now
reduced carbon emissions within our own
operations by 69% from 2012 to 2022
on a like-for-like basis, and remain on
track to achieve our target of achieving
net zero by 2030.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
31
Our Sustainable Growth Strategy continued
Environment and climate change continued
Scope3emissions
Scope3–verifiedemissions
For calendar years 2021 and 2022, we
have reported emissions from Scope 3
categories where we have sufficient source
data such as business travel expense
claims, and information regarding employee
commuting to calculate emissions using a
distance-based method. These emissions
are included within the boundary of the
external verification.
+Our verified Scope 3 emissions increased
by 27.6% from 5,530 tonnes in 2021 to
7,055 tonnes in 2022 on a like-for-like
basis, excluding acquisitions from both
years. Including the acquisitions,
our verified Scope 3 emissions increased
from 6,041 tonnes in 2021 to 8,760
tonnes in 2022. The biggest contributor
to this increase was the expected
post pandemic return to more normal
levels of employee commuting and
business travel.
FullScope3–estimatedemissions
To gain a better understanding of our
full carbon footprint, during the year, we
developed a model for estimating the
carbon emissions across all other Scope 3
categories, with support from the Carbon
Trust. The model is aligned to the Corporate
Value Chain (Scope 3) Accounting &
Reporting Standard, and uses a spend-
based method to estimate our emissions
for categories of activity where detailed
activity data is not readily available, such
as construction materials that are procured
indirectly through our subcontractors,
rather than directly from the product
supplier. Using this model, we have been
able to estimate our full Scope 3 emissions
for the first time.
Currently, we do not include full Scope
3 emissions within the boundary of the
external verification due to the inherent
limitations of the spend-based method, and
we will continue to report the verified Scope
3 emissions as well as our estimate of our
full Scope 3 emissions.
+Our estimated Scope 3 emissions
decreased by 2.1% from 487,220 tonnes
of carbon dioxide equivalent emissions
to 477,042. We are unable to calculate a
like for like basis excluding acquisitions
due to current limitations in the model.
Waste intensity
Our waste intensity increased in the year,
reflecting the growth in our Infrastructure
business, which tends to have higher
waste intensity projects. However,
waste continues to be an area of focus,
with increased use of Modern Methods
of Construction, especially off-site
manufacture, which can reduce the volumes
of waste produced. We also manage our
waste streams to maximise recycling and
minimise waste to landfill, with 94.5% of our
waste diverted from landfill (2022: 96.3%).
Progress in the year
Biodiversity
We have reviewed and updated our
environmental strategy, which now
includes the ambition to deliver a
biodiversity net gain of 10% across the
business. We undertake a biodiversity
baseline on our design and build projects,
using the DEFRA biodiversity metric.
From here, a landscaping strategy is
written for the project detailing the
biodiversity net gain to be delivered.
Monitoring periods are detailed within
the landscaping strategy for the handover
process back to the client.
The environmental strategy is supported
by enabling initiatives including biodiversity
lunch and learn sessions to upskill and
inform our teams and developing
environmental KPIs and performance
dashboards.
JourneytonetzeroandScience-based
targets
In 2021, we committed to achieving net zero
across our own operations (Scope 1 and 2)
by 2030 and net zero across all activities
(Scope 1, 2 and 3) by 2045. In setting
these net zero targets, we committed to
reducing our emissions as far as possible,
and offsetting the residual emissions at
the target years. During 2023, our near-
term targets, which support our net zero
targets, were validated by the SBTi (Science
Based Targets initiative). This provides
independent assurance that our projected
emissions reduction trajectory is aligned
to the ambition of limiting global warming
to 1.5°C. The trajectory towards net zero
is unlikely to be linear, and in some years,
we may see our emissions increase as the
volume and mix of projects changes.
CDPdisclosure
CDP (formerly Carbon Disclosure
Project) is the global ‘gold standard’ for
corporate environmental reporting. In
2022, we participated in the CDP Climate
Change reporting process for the first
time as a standalone construction group,
achieving a score of C – Awareness Level.
Making public disclosures through CDP
provides transparent reporting of our
carbon reduction targets, initiatives and
performance, and also how we are managing
the risks and opportunities presented
by climate change. This score provides a
baseline against which we can monitor
the progress we are making in managing
climate-related issues.
Strategy in action
Connecting
The Cairn to its
environment
TheCairnisthefirstnewdistillery
builtintheareasincetheCairngorms
NationalParkwascreated.
The challenge
Pre-development the site comprised
species-poor grazed pasture,
with dried out wetlands, a lack of
vegetation for breeding birdlife and
overgrown reeds. The team set out
to transform this into a diversity of
habitats for native wildlife to thrive.
The solution
+10 goldeneye nest boxes installed with
seven being successful, representing
circa 8% of the UK breeding goldeneye
population.
+476 new Aspen trees planted to re-
establish a woodland corridor for the
benefit of species such as the red-listed
Aspen Hoverfly.
+1,920 native woodland trees planted.
+A turf roof created with an automatic
irrigation system as part of the
distillery to attract pollinators in large
numbers.
32
Galliford Try Annual Report and Financial Statements 2023
Science-based target
Weachievedvalidationfrom
theSBTiforourscience-based
neartermcarbonreductiontargets.
Streamlined Energy & Carbon Reporting (SECR)
The data included in the table below covers the reporting requirements detailed in the
SECR regulations. As we report our carbon and energy data in calendar years, the following
section represents our carbon and energy performance for Galliford Try for the calendar
years 2022 and 2021.
We are pleased to report another reduction in our Scope 1 and 2 carbon emissions
intensity to 0.89 tonnes of carbon dioxide equivalent emissions per £100,000 of revenue
in 2022 from 0.91 in 2021. This reflects the various initiatives we have taken to become
more energy efficient and reduce the carbon footprint of our own operations. Overall, we
have reduced our Scope 1 and 2 (location-based) carbon dioxide equivalent emissions by
61% since 2012 from 30,587 tonnes of carbon dioxide equivalent emissions in 2012 to
11,822 tonnes in 2022. On a like-for-like basis, re-baselining 2012 emissions to reflect the
acquisitions made during 2021 and 2022, Scope 1 and 2 emissions have reduced by 69%.
Methodology and conversion
factors
Carbon dioxide equivalent emissions (tCO
2
e)
are calculated using the methodology in
ISO 14064-1 and the UK Government GHG
Conversion Factors and Methodology for
Company Reporting 2022, which are also
subject to external verification. Emissions
cover all those arising from our fleet, gas
and electricity in all offices and sites and all
other fuel used directly (for example diesel
on site) including our share of emissions
from joint ventures. Where data is obtained
in litres used and distance travelled, these
conversion factors have been used to
convert to kWh.
Annual energy usage
Our total energy use, calculated from
Defra 2022 conversion factors, for all our
UK activities was 52,118,358kWh (2021:
48,382,602 kWh). This increase is driven
by the acquisitions made in 2021 and 2022
and an increase in commuting and business
travel post-pandemic, which is partially
offset by reduced electricity consumption
and other energy efficiencies.
Energy consumption is calculated using
the same reporting boundary (operational
control) that we use to calculate our
carbon emissions.
Looking forward
Some of the key areas of focus over the
next year include:
+Working with our supply chain to reduce
embodied carbon, for example through
the materials we use.
+Continuing to develop our carbon
reporting capability by extending the
number of activities and level of detail
captured on our Diligent ESG GHG
reporting platform.
+Developing source systems and
methodologies to capture activity
data for Scope 3 activities including
purchased goods and services, employee
commuting and upstream transportation.
+A targeted initiative to accelerate
reductions in the amount of diesel we
use in company vans, generators, and
other plant and equipment.
TonnesofCO
2
e
Emissionssource20222021
Emissions from combustion of gas (Scope 1)
176
383
Emissions from combustion of fuel for transport purposes (Scope 1)
4,853
3,482
Emissions from fuel oil supplies ie diesel consumed (Scope 1)
5,533
4,556
Fugitive emissions from office facilities ie air conditioning systems (Scope 1)
51
212
Emissions from purchased electricity (Scope 2, location-based)
1,208
2,161
Emissions from purchased electricity (Scope 2, market-based)
633
1,341
Emissions from fuel and energy-related activities (Scope 3)
3,018
2,738
Emissions from business travel (Scope 3)
647
429
Emissions from employee commuting (Scope 3)
5,095
2,874
LearningsfromourfullScope3carbon
emissionsestimate
We identified that the emissions from
Scope 3 activities represent circa 98%
of our total carbon footprint and the
single largest source of emissions relates
to the construction materials we use,
representing circa 86% of our total carbon
footprint. Concrete and steel are by far
the largest sources of embodied carbon
due to the volume of these materials used
and the energy-intensive nature of the
manufacturing processes.
We are working with our clients and
supply chain to identify opportunities to
reduce embodied carbon through design
interventions and using lower-carbon
materials. An example of this is our
transition to use Electric Arc Furnace
steel, on all future Scottish educational
projects (page 41).
Investinginlowcarbonskills
We now have a team of 10 low carbon
specialists to manage and drive our Business
Units’ activities in response to the low
carbon agenda to reduce carbon within
the assets we deliver and processes used,
to support our clients’ ambitions to reduce
their carbon, and to support our Group
initiative to achieve PAS 2080 accreditation
in 2024.
Green site set-up guide
To support our project teams in reducing
their carbon emissions as well as a broader
range of environmental impacts, we have
developed a green site set-up guide to help
project teams set up and manage sites.
The guide covers all the key elements of a
site set up including: mains power supply,
off-grid power solutions, cars and vans, fuel
for plant and equipment, office and welfare
cabins, electric vehicle chargers, lighting
and security and travel plans. For each area,
the guide outlines a hierarchy of solutions,
with the lowest environmental impacts
being preferred. This will be updated as new
products and services come to the market.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
33
FY23 94%
Ambition: >60%
Ambition: >39
FY23 43.4
% of completed projects delivering >25%
SLEV
1
as a % of contract value
Considerate Constructors Scheme (CCS)
performance
2
FY22 50%
FY22 41.8
FY21 Not measured
FY21 40.6
Communities
Our objective is to make a positive impact in communities where
we operate by delivering greater social value and improving lives.
Performance in the year
+We delivered a combined Social and
Local Economic Value
1
(SLEV) of
£328m. Of the 35 projects assessed,
94% delivered a SLEV as percentage of
contract value greater than our target
of 25% against our ambition for 60% of
projects to exceed this threshold.
+Our average CCS
2
audit score increased
from 41.8 to 43.4 and remains above
the industry average, which for the
reported year was 40.0.
+We donated time, materials and
money to the value of £347,000 (2022:
£268,000) to charitable and
community causes.
Social value
Delivering a legacy of positive social value
outcomes is a key part of our strategy. This
is the right thing to do as a responsible
business and is also an increasingly
important priority for our clients. The
Construction Playbook states that central
Government tenders must include a
minimum of 10% of their evaluation criteria
dedicated to social value, and the priority
themes and outcomes are set out in 2020’s
Procurement Policy Note (PPN) 06/20 –
Taking Account of Social Value in the Award
of Central Government Contracts.
We measure the community impact we
deliver on our projects using the Social
Value Portal (SVP), a tool which is backed
by the National TOMs (Themes, Outcomes
and Measures) Framework, and helps
organisations measure, report and enhance
their social value. We were pleased to
exceed our target of at least 60% of our
projects delivering a Social and Local
Economic Value (SLEV) of more than 25% of
project value. Of the £328m in total SLEV,
£323m is derived from procuring from small
or medium-sized enterprises or businesses
within a 30 mile radius of our project sites.
Our Sustainable Growth Strategy continued
Communities
1,898
apprenticeshipweeks
delivered.
616
hoursofvolunteeringtime
delivered.
1,286
hours dedicated to
educationalsessions.
1 SLEV (Social and Local Economic Value) is a measure for the social contribution made to society, in particular to the local community, estimated using the National TOMs
(Themes, Outcomes, and Measures) Framework. The threshold of 25% was selected based on the SVP’s (Social Value Portal’s) 2021 Social Value Benchmarking Report.
The SVP’s analysis of 1,480 UK construction projects completed in the seven years to 2019 identified that the average SLEV as a percentage of project value was 24.67%.
In its 2022 report, SVP reported that in 2021, the average SLEV% was 19.55%.
2 During 2022, CCS changed its scoring methodology, meaning that the highest achievable score is now 50, if full innovation points are awarded. As a result, we have
changed the target to be greater than 39.0, which is the minimum score to achieve the ‘Excellent’ performance level.
34
Galliford Try Annual Report and Financial Statements 2023
Strategy in action
Providing new
futures for prison
leavers
+Eight prisoners employed.
+Three job offers upon release.
+One technical apprentice in full-time
position and NVQ Level 4 in Quantity
Surveying.
+£200k per annum benefit to society.
+25% reduction in reoffending rate.
Our award-winning construction mentoring
programme is a flagship pilot and the first
of its kind at HMP High Down, a Category
C prison where we are delivering a DHL
workshop building.
It supports the idea that effective
rehabilitation can reduce re-offending
by 25%, and provides work experience
and training across construction
management, mechanical and electrical
installation and bricklaying.
We have also provided skills training,
CV workshops and mock interviews to a
number of prisoners.
As a result, Galliford Try has been invited
to take part in discussions about prisoner
employment, opportunities for Release
on Temporary Licence across the MoJ
programme and how this can be replicated
across the prison estate.
The programme claimed the Value award,
Building Project of the Year under £10m,
and People Development prizes from
Constructing Excellence.
“ Employing men on the Galliford Try
site has been a real game-changer
for us at HMP High Down… If these
eight prisoners that Galliford Try have
employed do not go on to reoffend, it
will save the taxpayer £200,000 per
annum... If we can offset the cost of
the reoffending against the cost of the
building, everybody wins.”
Ian Vandersluys, HMP High Down
ConsiderateConstruction
The Considerate Constructors Scheme
(CCS) is an industry-wide organisation
that strives to improve the image of
the construction industry and leave a
positive legacy through implementation
of best practice in the areas of community
engagement, the environment and
workforce wellbeing. CCS scores and
benchmarks construction sites in terms of
their positive impact within their locality.
Again, we were pleased to increase our
score from 41.8 to 43.4 out of 50, which
remains above the industry average of 40.0.
Progress in the year
OpenDoors
We took part in the Open Doors initiative
again this year, inviting students and the
general public to our sites to provide an
insight into how we operate our sites, how
we work alongside our subcontractors
and supply chain, and what a career in
construction can offer. We delivered
presentations about possible career paths,
the work we participate in, and gave
attendees the opportunity to take part in
site tours and see how a live site operates.
This work builds upon similar work which
our businesses carry our locally as part of
their own community engagement efforts.
Local delivery supported by
Group-wide network
Social value delivery is managed by Social
Value Managers (SVMs) in each Business
Unit who define, agree, plan and report
on the community engagement and social
value activities on each of our projects. This
is based on a needs analysis, performed
through collaboration with national and
local stakeholders, and identifies the needs
and priorities of the local community and
the commitments made by our clients.
Over the past year, our SVMs have
continued to share good practice and
consistency of approach across our
businesses. This has included supporting
the implementation of the Social Value
Portal which is driving a consistent and
verified approach to measuring social
value outcomes.
Looking forward
Much of the value we add to communities
takes place locally, whether it is by providing
employment, using the local supply chain or
providing work experience and education
opportunities. We aim to continue to
support these activities at a project level by:
+Piloting a mentor programme for year
9 female students, in conjunction with
the Department of Work and Pensions
careers advisers.
+Increasing the visibility and promotion
of volunteering opportunities to link
with community benefit.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
35
Our Sustainable Growth Strategy continued
Quality and
innovation
We deliver excellence for our clients
by providing high-quality products
and services, and by engaging and
upskilling our supply chain to gain
the best from them
87%
of our work is
repeat business.
92%
of work secured
for FY24.
36
Galliford Try Annual Report and Financial Statements 2023
FY23 87%
Ambition: >80%Ambition: >85%
FY23 92%
% of repeat business
in our order book
% of full year planned revenue secured
at the start of the financial year
FY22 94%FY22 90%
FY21 92%FY21 90%
Clients
Our objective is to deliver superior buildings and infrastructure
with a better social footprint for clients through a focus on
The incentives to reduce our consumption of fossil fuels, energy and other resources are likely to be much higher under the
‘Sustainability’ scenario, with higher energy prices and potential regulatory costs associated with carbon emissions. Therefore the
potential cost savings from more efficient use of resources will be greater under this scenario than under alternative scenarios where the
regulatory and market drivers will not be as strong.
Levelofopportunities
HighModerateLow
68
Galliford Try Annual Report and Financial Statements 2023
Viability Statement
As required by provision 31 of the UK
Corporate Governance Code, the Board
has assessed the prospects and financial
viability of the Group, taking account of the
Group’s current position and the potential
impact of the principal risks to the Group’s
ability to deliver its business plan. The
assessment of prospects has been made
using a period of five years. The assessment
of viability has been made using a period of
three years, which aligns with our budget
period and provides reasonable visibility
of future revenue from the existing order
book. Since the sale of the housebuilding
businesses and the recapitalisation of the
business in January 2020, the Group no
longer has any debt facilities and associated
covenants, therefore viability has been
assessed in terms of the headroom against
available cash reserves.
Assessment of prospects
As outlined in our Strategic report, the
long-term prospects of the business are
supported by a strategy which builds on
our existing strengths and the growth
opportunities in our target markets.
Our alignment to the UK’s continued
investment in social and economic
infrastructure is a fundamental driver of
demand for our services and plays to our
strengths in the health, education, defence,
highways and environment markets. Our
ability to achieve sustainable growth
within these markets is underpinned
by our position on the most significant
procurement frameworks, our commitment
to supporting the decarbonisation of the
built environment and our investment in
digital technologies to drive continuous
improvement in quality and productivity.
Our people remain the key to our success
and our focus on attracting and retaining a
more diverse workforce as well as increasing
the proportion of apprentices and graduates
help us access the skills and expertise
required to deliver on our sustainable
growth strategy.
Assessment of viability
The base case for the cash flow projections
modelled in our assessment of viability
is the budget for the three years from
1 July 2023 which incorporates appropriate
contingencies against plausible day-to-
day downside risks, primarily the Group’s
principal risks as disclosed previously.
The base case shows strong levels of
average month-end net cash and assumes
that the Group continues to operate
without debt facilities.
Against this base case, we have stress-
tested the forecasts and modelled the
impact on cash flow and liquidity of a
number of downside scenarios related to
our principal risks, including a combined
downside scenario that includes a number
of these sensitivities occurring together.
The scenarios modelled, and their link to
the underlying principal risks, are described
in the below.
Scenario1–Reductioninconstruction
volumes(Linktoprincipalrisks:Work
winning)
Our cash performance is correlated with
earnings growth and therefore reliant on
construction activity being in line with
our assumptions.
We have modelled a reduction in
construction volumes that would equate
to a 10% reduction in monthly cash
receipts offset by a proportionate reduction
in payments, relative to our base case
forecast.
Scenario2–Deteriorationinworking
capital(Linktoprincipalrisks:
Resources)
We have modelled the impact of a
deterioration in our working capital, which
could be caused by delays in receiving
payments from clients and/or earlier
payments to our supply chain.
Scenario 3 – Irrecoverable cost
increases(Linktoprincipalrisks:Project
Delivery,Resources)
There is a risk of a prolonged period of
materials cost inflation and therefore we
have modelled the impact of failing to
fully mitigate these cost increases on our
projects.
Scenario4–‘Perfectstorm’(Link
toprincipalrisks:Workwinning,
Resources,ProjectDelivery)
We also tested the unlikely but plausible
scenario where all of scenarios 1–3 combine
at the same time.
As part of the viability assessment, the
Board also considered the mitigations
and interventions available to manage the
impact of one or more of the downside
scenarios occurring. The base case already
includes significant cash contingencies and
the Board has considered further mitigating
actions that are available to it.
The directors do not expect the emerging
climate change risks to have a significant
impact in the short and medium term,
particularly given the nature of the
contractual arrangements in place, although
continue to monitor this, as the Group
adapts to the changing environmental
requirements and demands to deliver
innovative solutions through new
technologies and methods of construction.
Based on the results of this analysis, the
Board has concluded that it has a reasonable
expectation that the Group will be able to
continue in operation and meet its liabilities
as they fall due over the three-year period
of its assessment.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
69
Stakeholder engagement
s172(1)statement
We pride ourselves on the relationships we build with stakeholders,
recognising the importance of addressing their interests to achieving our goals.
The Board acts in good faith in the way
most likely to promote the long-term
success of the company for the benefit of
its stakeholders, including shareholders,
employees, suppliers, customers and others.
The Group’s purpose (page two) and strategy
(page 14), put stakeholders at its core and
ensure their interests are considered during
decision-making, including any impact of the
Group’s operations on the community and
the environment.
The company sets high standards of business
conduct, and the need to act fairly are rooted
in Galliford Try’s Code of Conduct, Doing the
right thing, which outlines our duties to our
colleagues, clients, suppliers, communities,
the environment and governance.
Monitoring culture
Monitoring the culture of the business is a key priority for the Board. This activity is
executed through a number of means described in the Governance review.
How the Board engages with
our stakeholders
Stakeholder engagement takes place
through a variety of channels, both through
direct and indirect interactions. The type
of engagement is driven by the needs of
each stakeholder group to ensure they
are communicated in a way that is both
effective and practical. Details of how
we engaged with key stakeholders, their
interests and how these influenced Board
decisions during the year are set out in this
section and on pages 81 to 84.
In 2019, we established our Stakeholder
Steering Committee, a committee of the
Main Board, with the purpose to review
and oversee relationships with the
business’s key stakeholders, including
engaging with stakeholders, collating
stakeholder views and reporting these
views to the Board. The Committee was
chaired by Senior Independent Director
Terry Miller, and sought to ensure
stakeholder views are considered in
Board discussions and decisions.
Employee Survey
Reviewing the results of
employee surveys and
monitoring employee
advocacy scores.
Health and safety
performance
Reviewing of health, safety
and wellbeing performance
including Lead Indicators.
Employee Forum
Active participation in the
Employee Forum and ESG
Committee.
Employee churn
Monitoring employee churn.
Site visits
Regular visits to our offices
and construction sites to
see first-hand how our
teams operate.
Whistleblowing reports
Reviewing the type and
frequency of whistleblowing
reports.
In May 2023 the Board established an
ESG Committee, merging the activities of
the Stakeholder Steering Committee and
Carbon Reduction and Social Value Forum
(page 78). The ESG Committee is chaired
by the Finance Director and reports directly
to the Board.
The information obtained in the meetings
complements regular updates and
presentations to the Board which provide
in-depth updates on key interests of our
stakeholders such as health and safety,
human resources matters, sustainability
and client and supplier priorities. These are
complemented by site visits which enable
directors to gain a first-hand insight into
our culture, and meeting with investors
and shareholders through platforms such
as the AGM.
Read more about how our Board
decision-making on pages 81 to 84 →
70
Galliford Try Annual Report and Financial Statements 2023
Our people
We are reliant on our people to achieve our purpose.
Stakeholder group
How we engage
Actions in the yearOutcomes
Key business and sustainability stakeholder interests identified in our Stakeholder Materiality Matrix
+Health, safety and wellbeing.
+Purpose and culture.
+Inclusion.
+Investment in learning and development.
+Career progression.
+Rewards and benefits.
+Appointed a new Behavioural Safety Manager to lead
our approach to behavioural safety.
+Carried out a ‘pulse’ survey to gauge employee sentiment
on key areas.
+Signed up to the Clear Assured inclusion framework.
+Delivered our third all staff virtual roadshow with national
and local information for our staff.
+Continued our programme of Executive Board-led inductions
for new starters.
+0.20 LTFR.
+95% of our people believe we give Health & Safety
a high priority.
+86% employee advocacy score.
+Achieved Clear Assured’s Bronze rating for equity,
diversity and inclusion.
+Voted number one Graduate employer and number two
Apprentice employer in construction/civil engineering by
TheJobCrowd.
Health and safety p25 →
People and culture p27 →
Embedding and reinforcing our culture is a continuous process.
We ensure employees understand our culture and purpose from
the recruitment stage. On joining, all employees take part in an
induction with members of our Executive Board, outlining our
purpose, strategy, values, business processes and giving them the
opportunity to ask their questions. Graduates attend an additional
Early Careers welcome event.
New starter and refresher training ensure our culture and processes
are embedded. Our Employee Engagement Group seeks the views of
employees on strategic decisions and provides updates from the business.
Engagement also takes the form of a roadshow from our Chief
Executive, emails and videos from him to all staff, local briefings,
e-bulletins, an employee magazine, employee Performance
Development Reviews and toolbox talks.
Access to our Employee Assistance Programme offers support
to our people while our whistleblowing hotline enables them to
confidentially report suspicion of wrongdoing.
Boardengagement
+The Board-level Employee Forum meets twice a year to discuss
matters important to employees.
+The Board carries out visits to our sites and offices
to monitor in person our culture in action.
+The Board receives presentations and update reports
from our businesses.
+Our Challenging Beliefs, Affecting Behaviour modules are
opened by a member of the Executive Board.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
71
Stakeholder engagement continued
Clients
Satisfied clients are essential for a
sustainable and profitable business.
Suppliers
The majority of our work is delivered in partnership
with our supply chain so they must be aligned to our
values and objectives.
Stakeholder groupStakeholder group
How we engageHow we engage
Actions in the yearActions in the yearOutcomesOutcomes
Key business and sustainability stakeholder interests
identified in our Stakeholder Materiality Matrix
Key business and sustainability stakeholder interests
identified in our Stakeholder Materiality Matrix
+Financial stability
and ability to deliver.
+Safety, time, cost and quality.
+Carbon and
sustainability objectives.
+Creating greater
social value.
+Health, safety and wellbeing.
+Fair treatment and
prompt payment.
+Pipeline of work.
+Collaborative relationships.
+Access to training,
educational resources
and learning opportunities.
+Invested in acquisitions that
will extend our offering in
areas such as offsite build
and asset optimisation which
are sought after by our
clients.
+Continued to invest in
our low carbon and digital
capabilities to help achieve
client objectives.
+Continued to target and win
places on frameworks with
new and existing clients.
+Continued to support key
subcontractors through
our Advantage through
Alignment programme.
+Continued our Net Zero
Partners Programme to
support supply chain with
their carbon upskilling.
+Continued to promote the
Supply Chain Sustainability
School.
+82% of our order book is in
frameworks.
+87% repeat business.
+Selected to drive UK Net
Zero Carbon Buildings
Standard.
+Awarded Building a Safer
Future Champion status for
leadership and culture in
relation to building safety.
+58% of Business Unit core
trades spend with Aligned
subcontractors.
+98% of invoices paid within
60 days.
+Gold member of Supply
Chain Sustainability School.
Clients p37 →Supply chain p41 →
Collaborative relationships provide the platform for our teams
to provide trusted advice and focus on performance with clear
customer priorities and outputs all underpinned by our accreditation
to the ISO 44001 Collaborative Business Relationships Standard.
On appointment, we carry out a Customer Start Meeting which
identifies outcomes for the end of the project discussions and are
retained for record purposes. Dedicated quality managers conduct
regular audits, complemented by our internal audit department and
external audits of our ISO 9001 certified management system.
Frameworks allow us to deepen our relationships with our client
and stakeholder groups which leads to greater innovation and
better public infrastructure.
We seek to build long-term relationships with key suppliers and
contractors who share our principles.
Robust contracts set the terms for both parties in our relationships,
and regular meetings, workshops and working groups ensure two-
way communication.
Through our Advantage through Alignment programme of support,
training and education, we align our suppliers and subcontractors
with our working practices, our values and our vision.
We hold daily briefings with the subcontractors on our sites to set
out objectives for the day, including safety and quality risks and
priorities.
72
Galliford Try Annual Report and Financial Statements 2023
Communities
We want to be welcomed in the communities
we operate in and create greater social value
where we operate.
Shareholders
We want our shareholders to have confidence
in the long-term success of our business.
Stakeholder groupStakeholder group
How we engageHow we engage
Actions in the yearActions in the yearOutcomesOutcomes
Key business and sustainability stakeholder interests
identified in our Stakeholder Materiality Matrix
The Strategic Report is approved by the Board of Directors
and signed on behalf of the Board on 20 September 2023 by
Kevin Corbett, General Counsel & Company Secretary.
Key business and sustainability stakeholder interests
identified in our Stakeholder Materiality Matrix
+Health, safety and
environment.
+High-quality buildings
and infrastructure.
+Use of local labour, resources
and employment, educational
opportunities and wider
investment in their community.
+A sustainable business
model and strategy.
+Financial performance
and dividend policy.
+Corporate governance.
+Risks to the business.
+Supported local communities
through employment and
training.
+Donated time, money and
materials to charitable causes.
+Appointed an Outreach Lead
to lead on activities with
specific communities.
+Took part in Open Doors.
+Provided video recordings
and webcasts of our half and
full year results.
+Issued trading updates.
+Held AGM.
+Took part in private/
retail investor forums and
investor meetings and open
presentation and Q&As for
retail investors.
+43.4 average CCS score.
+Reported 94% of projects
delivering more than 25%of
percentage of contract value.
+£347k of charitable
donations.
+10.5p full year dividend per
share.
+12.0p special dividend.
Communities p34 →
We engage with local communities through town halls,
newsletters, project websites, social media, press releases and
planning meetings.
As a dedicated Partner of the Considerate Constructors Scheme,
we strive to run our sites as considerately as possible to the
community, focusing on the key areas of safety, environment,
workforce and site appearance.
Through events such as Build UK’s Open Doors, recruitment
fairs, school visits and site tours, we showcase our industry and
invite communities to learn more about our industry, business,
projects and careers on offer.
We engage directly with our shareholders through investor
roadshows, face-to-face meetings, video or telephone
communications, Capital Markets Days, results presentations
and webcasts, analyst briefings, AGMs, our Annual Report,
consultations and Regulatory News Service announcements.
Indirect engagement includes an up-to-date website, press
coverage, engaging in social media, trading updates; corporate
and financial videos; and contributions to investor decision-
making resources.
Policies relating to each of these stakeholder groups can be found in the pages on our website. Risks are detailed
from page 52 and further information is contained in the Sustainability section from page 22.
Strategic reportGovernanceFinancial statements
gallifordtry.co.uk
73
Galliford Try Annual Report and Financial Statements 2023
Chair’s review
Governance overview
Strong governance
delivering a
sustainablefuture
On behalf of the Board, I am delighted to present
my first Corporate Governance Report, following my
appointment as Chair on 21 September 2022.
It is an exciting time to have joined Galliford
Try as the Board continues to build on the
solid foundations put in place at the start of
our strategy launched in September 2021.
Strong governance is at the heart of the
successful execution of strategy and our
governance framework has supported and
delivered the further development of our
Sustainable Growth Strategy. Operationally,
our strategy seeks growth in existing and
adjacent markets and, during the year,
the Company acquired two specialist
businesses, MCS Control Systems and Ham
Baker, as strategic propositions to further
expand and enhance the capabilities offered
by our Environment business.
In terms of financial objectives, continued
focused monitoring and controls around an
already strong balance sheet and capital
base has assisted the growth of revenue and
delivery of robust profit margins despite
the backdrop of inflation and supply chain
challenges.
“ Our Sustainable Growth Strategy is built on
the Company’s secure financial foundation
and is designed to both align to and support
the interests of our stakeholders for the
long-term benefit of all.”
Alison Wood
Chair
The Board recognises the importance
of capital returns to shareholders and,
given the recent strategic acquisitions
and strong financial performance of the
Group, considered a share buyback to be
in the interests of stakeholders. During the
year management also resolved a major
dispute, enabling a further capital return to
shareholders by way of a special dividend
payable to shareholders in October 2023.
The Board revisited the Group’s priorities
and progress in a full strategic review at its
annual strategy meeting on 19 April 2023
and the Board is satisfied the strategy
continues to be appropriate, fit for purpose
and aligns with the values and purpose of
the Group.
More information regarding our strategy can be
found on pages 1 to 73.
AlignmentwiththeUKCorporate
GovernanceCode(the“Code”)
Board leadership and
company purpose
p87
Division of
responsibilities
p88
Composition, succession
and evaluation
p88
Audit, risk and
internal control
p89
Remunerationp89
74
Diversity and inclusion
Following the appointment of Sally Boyle
and myself last year, the Board now has a
composition where 57% of members are
women, which exceeds the target by the
Financial Conduct Authority of 40% of
Board members to be women. We also meet
the recommendations requiring females to
occupy at least one of the Board’s senior
roles. Gender diversity in the wider senior
management and wider workforce remains
a key focus as further initiatives such as
agile work and family-friendly policies
along with development programmes assist
in creating a more diverse pipeline. Our
Gender Pay report for April 2023 showed
the proportion of males and females across
the Group remained stable with 23% of
our employees being female and 77%
being male.
Initiatives and programmes are in place
to develop ethnic diversity across
the workforce and ensure equitable
opportunities for all including the creation
of a new and dedicated inclusion team
within the HR function; partnering with
Clear Company, an HR specialist, to ensure
progressive recruitment and retention
practices; and initiatives such as celebrating
employees of all faiths and taking part in
National Inclusion Week.
Please see our People section on pages 27 to 29
for further information.
Carbon and climate change
matters
The Board recognises that climate change
and reducing our carbon footprint is
imperative to the long-term sustainable
success of the business. We continue to
prioritise investment in reducing our carbon
footprint and enhancing our measurement
and reporting. Our progress in the year
includes having our carbon reduction
targets externally validated by the Science
Based Targets initiative, estimating our
full scope 3 footprint for the first time,
implementing carbon reporting software,
and recruiting Low Carbon Managers to
support the development of our capability
across the business.
Board Changes
There have been a number of changes to
the Board during the year, following the
stepping down of Peter Ventress and Gavin
Slark in September 2022 and March 2023,
respectively. On behalf of the Board I wish
to thank both Peter and Gavin for their
significant contributions and service to
the Group. I am also delighted to welcome
Michael Topham who was appointed to
the Board on 1 June 2023 who will further
strengthen the Board’s independence
and provide added guidance in delivering
our strategy.
Board Performance Evaluation
This year the evaluation process for the
Board was carried out internally. After a
thorough process the conclusion overall
was that the Board continues to operate
effectively with the directors working well
together. Further information can be found
on pages 84 to 85.
Remuneration policy
The Remuneration Committee has reviewed
the Group’s existing Remuneration
Policy and having taken into account
corporate governance and market best
practice, and actively engaged with
shareholders to discuss the proposed
new Remuneration Policy, no material
changes are recommended. The
proposed new Remuneration Policy will
be put to shareholders at the AGM in
November 2023.
Annual General Meeting
The Company will hold its 2023 AGM on 10
November 2023 at the offices of Peel Hunt
LLP, 7th Floor, 100 Liverpool Street, London
EC2M 2AT at 11.00 am where the Board
will be pleased to welcome shareholders,
answer questions, listen to suggestions and
encourage shareholders’ participation in the
business to be discussed at the meeting.
On behalf of the Board, I and my fellow
directors look forward to meeting with
shareholders at the AGM.
Alison Wood
Chair
gallifordtry.co.uk
75
Financial statementsGovernanceStrategic report
Executive 2
Male 3
0-2y 3
Non-executive 5
Female 4
2-5y 35-10y 1
plcBoardComposition
Board Balance of Roles
Gender Diversity
Length of appointment (years)
Galliford Try Annual Report and Financial Statements 2023
Directors and Executive Board
Our Board
Boardexperience
Business ethics and integrity
Construction
Commercial
Finance
Governance
Human resources
Strategy and risk
BoardCommitteemembership
Audit Committee
Nomination Committee
Remuneration Committee
Executive Board
Chair
Alison Wood
Chair
Boardexperience:
Appointmentdate: Alison joined the Board on
1 April 2022 and was appointed as Chair on
21 September 2022.
Skillsandexperience:Alison has a background
in engineering, economics and management and
extensive corporate experience with leading
engineering companies. She spent nearly 20 years
at BAE Systems PLC in a number of strategy and
leadership roles, including as Group Strategic
Director, and was the Global Director of Strategy
and Corporate Development at National Grid PLC
from 2008 to 2013. Alison has previously held
Non-executive Director positions with BTG PLC,
Thus Group PLC, e2v PLC, Cobham PLC, Costain
plc and Capricorn Energy plc.
Externalappointments:Alison is a Non-executive
Director and Chair of the Remuneration
Committee at TT Electronics PLC and is Senior
Independent Non-executive Director and Chair
of the Remuneration Committee at Oxford
Instruments PLC. Alison is also a Non-executive
Director and Chair of the Remuneration
Committee at the British Standards Institution.
Terry Miller CBE
Senior Independent Director
Boardexperience:
Appointmentdate:Terry was appointed to the
Board on 1 February 2014.
Skillsandexperience:Terry brings strong
commercial experience from senior roles in both
the public and private sectors. She was a Trustee
of the Invictus Games Foundation and General
Counsel for the London Organising Committee
of the Olympic and Paralympic Games (LOCOG).
Her LOCOG role included experience of major
construction projects in overseeing negotiation
of all overlay construction contracts for the
London 2012 Games. Prior to LOCOG, Terry
spent 17 years with Goldman Sachs and was its
International General Counsel.
Externalappointments:Terry is a Non-executive
Director of Goldman Sachs International, Goldman
Sachs International Bank, insurance company
Rothesay Life plc; a trustee of the Rothesay
Foundation and a Non-executive Director and
Senior Independent Director of Stelrad Group plc.
Sally Boyle
Non-executiveDirector
Boardexperience:
Appointmentdate:Sally was appointed to the
Board on 1 May 2022.
Skillsandexperience:Sally qualified as a solicitor
at Simmons and Simmons. After several years in
private practice as an employment law specialist,
she joined Goldman Sachs International as an
employment lawyer and she later became Head
of Human Capital Management for EMEA.
She was named Partner in 2010 and worked
as the International Head of Human Capital
Management, covering EMEA, India and APAC,
until she retired from Goldman Sachs. Sally was
on the Board of Goldman Sachs International and
its Management Committee and co-chaired the
EMEA Diversity and Inclusion Committee, whilst
also sitting on the global Diversity Committee.
Sally was also previously a Non-executive
Director of the Royal Air Force.
Externalappointments: Sally is a Non-executive
Director of Cambridge University Press and
Assessment.
Bill Hocking
ChiefExecutive
Boardexperience:
Appointmentdate:Bill was appointed as Chief
Executive on 3 January 2020.
Skillsandexperience: Bill is a civil engineer
with more than 35 years of experience in the
construction industry. He has full day-to-day
responsibility for delivering the Group’s strategy,
having regard to the Group’s responsibilities to
its shareholders, customers, employees and other
stakeholders.
Bill joined Galliford Try as Managing Director
of Construction in September 2015. He was
previously at Skanska UK plc, which he joined in
1990 and where he held the position of Executive
Vice President on the Executive Management
Team from 2008. From 1 August 2016 until his
appointment as Chief Executive of Galliford
Try, Bill was Chief Executive of the Group’s
Construction & Investments division.
Marisa Cassoni
Non-executiveDirector
Boardexperience:
Appointmentdate:Marisa was appointed to the
Board on 1 September 2018.
Skillsandexperience:Marisa is a chartered
accountant with more than 40 years’ experience
as a finance professional. She has strong
leadership and commercial experience gained
through her various executive and non-executive
roles. Her early career was initially in audit but
she progressed into advisory services including
corporate finance, investigations and restructuring
across a variety of industries and jurisdictions.
Marisa’s previous executive roles include Group
Finance Director of the John Lewis Partnership,
Royal Mail Group, Britannic Assurance Group
and Prudential UK Group. Marisa has over 20
years’ experience as an Executive Board member
and was previously a Non-executive Director of
Skipton Building Society and Ei Group plc.
Externalappointments:Marisa is currently a
Non-executive Director and Senior Independent
Director of AO World plc, a leading European
online electrical retailer.
76
Michael Topham
Non-executiveDirector
Boardexperience:
Appointmentdate:Michael was appointed to
the Board on 1 June 2023.
Skillsandexperience:Michael is the Chief
Executive Officer of UK waste management
group Biffa. Michael has held the position of
CEO since 2018, having previously served as
CFO and in various divisional roles. Michael is
a Chartered Accountant having trained with
PwC where he held positions in both the audit
and transaction services practices.
Externalappointments: Michael is the
Chief Executive of Biffa and a director of
Environmental Services Association Limited.
Kevin Corbett CEng MICE MIStructE
GeneralCounsel&CompanySecretary
Boardexperience:
Appointmentdate:Kevin joined the Executive
Board on 1 February 2012 and was appointed
General Counsel & Company Secretary on 1
March 2012.
Skillsandexperience:Kevin is a solicitor and
chartered civil and structural engineer. He was
previously Chief Counsel Global for AECOM.
Kevin has significant corporate law, risk
management, insurance, finance, governance,
strategy and extensive UK and overseas
experience.
He chairs the Executive Risk Committee and
has responsibility for the management of Legal,
Secretariat, Communications and Property
functions.
Ian Jubb
ManagingDirector,Building
Boardexperience:
Appointmentdate:Ian was appointed to the
Executive Board on 3 January 2020.
Skillsandexperience:Ian has nearly 40 years’
experience in the industry, with the last 20 years
including senior positions with Miller Construction
and Taylor Woodrow. He joined the Group as
Managing Director for the North and Scotland
Building division on the acquisition of Miller
Construction in July 2014, subsequently taking
responsibility for all Building operations in May
2019.
Andrew Duxbury
FinanceDirector
Boardexperience:
Appointmentdate:Andrew joined the Board
on 26 March 2019 as Finance Director.
Skillsandexperience:Andrew is a Fellow of
the Institute of Chartered Accountants in
England and Wales, with extensive knowledge
of the operating environment in construction.
He has operational responsibility for managing
the Group’s finances and oversees the Risk
and Sustainability, Internal Audit, Finance, Tax
and Treasury, IT and Shared Service Centre
functions. He chairs our ESG Committee which
meets at least three times a year.
He joined Galliford Try in March 2012 as Group
Financial Controller and from 2016, held a
number of operational finance roles, including
Finance Director of the Group’s former
housebuilding arm. Prior to joining Galliford
Try, Andrew worked for PwC.
Vikki Skene
HR Director
Boardexperience:
Appointmentdate:Vikki joined the Executive
Board on 3 January 2020.
Skillsandexperience:Vikki is a senior HR leader,
with more than 20 years’ experience in both
Construction and HR and was previously UK
Employee Relations Director at Balfour Beatty,
where she held a number of senior HR roles. She
joined the Group in June 2016 as HR Director of
the Construction & Investments division.
Mark Baxter
ManagingDirector,SpecialistServices
Boardexperience:
Appointmentdate:Mark was appointed to the
Executive Board on 3 January 2020.
Skillsandexperience:Mark has a wealth of
industry and PPP experience, gained through a
number of senior roles spanning more than 20
years. He joined the Group in February 2014 from
Miller Construction, taking on the responsibility
for the Group’s Investments division.
In March 2018, Mark additionally took on
responsibility for the FM division and, in 2019, the
specialist businesses Rock & Alluvium and Oak
Specialist Services. In his career to date, he has
held a number of senior roles including Director
for all PPP activities at Miller Construction.
Executive Board Members
gallifordtry.co.uk
77
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Governance review
Governance structure
Our governance framework – the role of the Board and its Committees
Our governance and controls framework ensures there is a clear and effective division between the Board,
its Committees and operational management. Our governance framework is detailed below.
ESGCommittee:
In April 2023 the Board established an ESG Committee by merging its Stakeholder Steering Committee and Carbon Reduction and
Social Value Forum.
The Committee co-ordinates and oversees the Group’s activities in relation to the carbon reduction initiatives; social value adding practices; and
the Group’s relationships with its key stakeholders, ensuring their views are considered in Board discussions and decisions.
The Committee is chaired by the Finance Director, meets at least three times a year and reports its activities and outputs to the Board, enabling
Board oversight and influence across all ESG areas. The Committee is comprised of representatives from across our operational divisions and
support services functions and includes the Director of Risk and Sustainability which ensures that the work of the ESG Committee is aligned
to our principal ESG risks, including climate-related risks.
EmployeeForum:
The Employee Forum is chaired by Sally Boyle, Non-executive Director, who took over from Terry Miller, Senior Independent Director, on
1 June 2023. The Forum meets at least twice a year and consists of employee representatives from a range of roles and departments across the
Group. The Forum provides a valuable channel for the two-way communicating of policies which affect employees and communicating the views
of our workforce to the Board. Areas of discussion include company values, strategy, health, safety and wellbeing, benefits and rewards, training,
communication and other aspects that influence employee engagement.
The Board promotes the Company’s long-term sustainable success for its stakeholders and is the key decision-making forum for all strategic matters. It monitors
progress against the Company’s strategic priorities and ensures there is a robust and effective control environment, so that principal and emerging risks are
appropriately assessed and managed. It sets the culture for the Company and ensures good corporate governance procedures are in place and adhered to.
AuditCommittee:
Oversees financial reporting matters; keeps under review the adequacy and
effectiveness of the Company’s internal control and risk management systems;
reviews the independence and effectiveness of the external audit process and seeks
to ensure the effectiveness of the Company’s whistleblowing arrangements for its
employees and contractors.
NominationCommittee:
Oversees Board and Committee composition, succession planning for Directors
and other senior executives, and the Board evaluation, considering the Board’s
balance of skills, experience, independence and knowledge of the Company, its
diversity, how the Board works together as a unit, and other factors relevant to
the Board’s effectiveness.
RemunerationCommittee:
Designs remuneration policies and schemes for the Executive Directors and senior
management and reviews workforce remuneration policies, to ensure such policies
support the Group’s strategy and promote its long-term sustainable success.
ExecutiveBoard:
Oversees the Group’s operational management and
implements its strategy and policies, including the
Health, Safety & Sustainability, financial, HR and
risk policies, as agreed by the plc Board.
ExecutiveRiskCommittee:
Assists the Board and Audit Committee
in monitoring and updating the Group’s
principal, emerging, and climate-related risks.
The Committee is chaired by the General Counsel &
Company Secretary.
See page 70 →
See page 52 →
See page 86 →
See page 94 for our Audit Committee report →
See page 90 for our Nomination Committee report →
See page 98 for our Remuneration Committee report →
KevinCorbettGeneral Counsel & Company Secretary8/83/32/23/3
PeterVentress
2
Former Chair2/8by invitationn/a2/3
Gavin Slark
3
Non-executive Director6/82/31/23/3
1 Michael Topham was appointed as Non-executive Director on 1 June 2023. There were no Board or Committee meetings scheduled during the remainder of the
financial period for Michael Topham to attend.
2 Peter Ventress stood down as Chair of the Board and Chair of the Nominations Committee on 21 September 2022.
3 Gavin Slark stood down as Non-executive Director on 1 March 2023.
Discretion to pay lower base salary with incremental increases (potentially above the average
increase across the Group), as the new appointee becomes established in the role.
PensionandbenefitsIn line with the policy for existing
executive directors.
In line with the Policy, pension contribution rates will be aligned with those offered across our
employee population.
Relocation expenses or allowance, legal fees and other costs relating to recruitment may be
paid as appropriate.
ABPIn line with existing schemes.Where a director is appointed part way through a financial year, different performance
measures could be introduced to reflect the change in role and responsibilities. The annual
bonus limit remains at 120% of base salary for a Chief Executive and 100% for other directors.
Pro-rating applies as appropriate for intra-year joiners.
Where an individual is appointed to the Board, different performance measures to those for
continuing directors may be set for the period of time remaining in that performance year.
LTIPIn line with Group policies and LTIP
rules.
An award of up to 150% of salary may be made in accordance with the Remuneration Policy
table. An award may be made in the year of joining or can be delayed until the following year.
Targets would normally be the same as for awards to other directors.
OthershareawardsThe Committee may make an
incentive award to replace deferred
pay forfeited by an Executive leaving
a previous employer.
Awards would, where possible, be consistent with the awards forfeited in terms of structure,
value, vesting periods and performance conditions.
40%
31%
24%
45%100%
31%
29%24%
26%
50%
42%
28%
22%
46%100%
32%
30%25%
23%
52%
Max +
50% share price
MaximumTargetMinimum
Fixed payAnnual bonusLong-term incentives
Bill Hocking
£2,252
£1,880
£1,209
£539
Max +
50% share price
MaximumTargetMinimum
Andrew Duxbury
£1,741
£1,438
£934
£430
106
The Committee reserves the right to award
additional remuneration in excess of the
Remuneration Policy at appointment,
exclusively to replace lost rewards or
benefits. In determining the appropriate
form and amount of any such award, the
Committee will consider various factors,
including the type and quantum of award,
the length of performance period, and
the performance and vesting conditions
attached to each forfeited incentive
award. The maximum payment (which
may be in addition to the normal variable
remuneration) should be no more than
the Committee considers is required to
provide reasonable compensation to the
incoming director.
Directors’ service contracts and policy for payments to departing executive directors
The service contracts and letters of appointment for the Board directors serving as at 30 June 2023 are detailed below:
Contract date
1
Noticeperiod
2,3
(months)
Non-executivedirectors
Terry Miller3 January 20206
Marisa Cassoni3 January 20206
Alison Wood1 April 20226
Sally Boyle1 May 20226
Michael Topham1 June 20236
Executivedirectors
Bill Hocking3 January 202012
Andrew Duxbury3 January 202012
1 Date shown is the director’s contract as an Executive or Non-executive director of the Group. Executive directors have a rolling notice period as stated. Non-executive
appointments are reviewed after three years and their appointments are subject to a rolling notice period as stated. All Directors will stand for election or re-election at
the 2023 AGM.
2 There are no contractual provisions requiring payments to directors on loss of office or termination, other than payment of notice periods. The Committee may seek to
mitigate such payments where appropriate.
3 Subject to the Nomination Committee’s recommendation, the Group’s practice is to agree notice periods of no more than six months for Non-executive directors and
no more than 12 months for executive directors.
The Committee may make use of the
flexibility provided in both the Listing
Rules and the approved Remuneration
Policy, to make awards outside the existing
parameters of the LTIP.
For internal promotions to Executive
Director positions, the Committee’s policy
is for legacy awards or incentives to be
capable of vesting on their original terms
(which may involve participation in schemes
that operate exclusively for below Board
employees) or, at the discretion of the
Committee, they may be amended to
bring them into line with the policy for
executive directors.
For a new Non-executive Chair or Non-
executive Director, the fee arrangement
would be set in accordance with the
approved Remuneration Policy.
The Executive directors’ service contracts
and letters of appointment for the Non-
executive Directors are available at the
Group’s registered office and will be
available for inspection immediately prior to
and during the 2023 AGM.
For executive directors, at the Group’s
discretion, a sum equivalent to 12 months’
salary and benefits may be paid in lieu of
notice. The contracts include mitigation
provisions to pay any such lump sum in
monthly instalments, subject to offset
against earnings elsewhere. This will also be
the case for any future appointments.
An Executive director’s service contract
may be terminated summarily without
notice and without any further payment or
compensation, except for sums accrued up to
the date of termination, if they are deemed
to be guilty of gross misconduct or for any
other material breach of the obligations
under their employment contract.
The Group may suspend executive directors
or put them on a period of gardening leave
during which they will be entitled to salary,
benefits and pension.
For ‘good leavers’, bonuses may be payable
pro rata for the proportion of the financial
year worked, at the Committee’s discretion.
Depending on the circumstances, the
Committee may consider additional
payments in respect of an unfair dismissal
award, outplacement support and assistance
with legal fees.
Any share-based entitlements granted to
an executive director under the Group’s
share plans will be determined based on the
relevant plan rules. The default treatment
is that any outstanding awards lapse
on cessation of employment. However,
‘good leaver’ status can be applied at the
Committee’s discretion, taking into account
the individual’s performance and the
reasons for their departure.
gallifordtry.co.uk
107
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Remuneration Committee report continued
Directors’ Remuneration Policy continued
For ‘good leavers’, LTIP awards may vest at
the normal time (other than by exception) to
the extent that the performance conditions
have been satisfied. The level of vested
awards will be reduced pro rata, based on
the period of time after the grant date and
ending on the date employment ceased
relative to the three-year performance
period, unless the Committee, acting fairly
and reasonably, decides that such a scaling
back is inappropriate in any particular case.
Deferred bonus shares of ‘good leavers’ vest
on cessation of employment.
On a change in control, LTIP awards
may vest based on the Committee’s
determination of the extent to which the
performance conditions have been satisfied
based on performance to date. The level
of vested awards will be reduced pro rata
based, unless the Committee acting fairly
and reasonably, decides that such a scaling
back is inappropriate in any particular case.
Deferred bonus shares will vest in full.
The overriding principle will be to honour
contractual remuneration entitlements
and determine on an equitable basis
the appropriate treatment of deferred
and performance-related elements of
remuneration, taking into account the
circumstances. Failure will not be rewarded.
External directorships
Any additional external appointments can
only be undertaken with the Board’s written
approval and if time and commitments
allow. Executive directors require the
Board’s approval to accept external
appointments as Non-executive directors
and retain any associated fees.
Shareholder consultation
Where appropriate, the Committee will
consult relevant institutional shareholders
in advance of substantial changes to the
Policy or individual executive director
remuneration packages. Relevant
institutional shareholders were consulted
ahead of the introduction of the current
Remuneration Policy, which was approved
at the 2020 AGM and further shareholder
consultations were held in advance of the
proposed New 2023 Policy.
Wider workforce remuneration
and how the views of employees
have been taken into account
When setting pay for the executive
directors, the Committee considers
remuneration structures elsewhere in the
Group, including the overall salary increase
budget and incentive structures. The
Committee also takes into account available
market sector data obtained through
benchmarking, as well as Government
policies and advice from the Executive
management team.
The total package on offer remains
competitive at all levels of the Group. The
comprehensive range of benefits include
flexible working arrangements, a minimum
of 28 days’ holiday and the opportunity
to purchase further days, as well as a
pension plan, paid volunteering days, car
allowance, a regular SAYE scheme and
health insurance plan. These wider benefits
are communicated to staff via Galileo, the
Company’s intranet system, and via the
Employee Value Proposition, a summary
letter to all employees detailing the wider
benefits available.
The Board does not consult employees on
Executive remuneration but does ensure
it understands employee views on matters
including rewards and benefits, which are
an agenda item for the Employee Forum.
The Forum is now chaired by Sally Boyle
having previously been chaired by Terry
Miller, Senior Independent Director and
Remuneration Committee Chair, who is
stepping down from the Board in October
2023. The Forum also discusses business
updates and feedback from employee
representatives on key topics such as
people and engagement initiatives,
communication and wellbeing, as well as
reward and benefits.
The Employee Forum ensures employees
have a voice in the Boardroom, strengthens
internal communications, enables
employees to offer ideas, champions
change and supports good governance.
It can also act as a representative body
for communicating with employees and
obtaining feedback about matters that may
affect their employment.
108
Remuneration Committee report continued
Annual report on Remuneration
This part of the Directors’ Remuneration report sets out how the Policy
was implemented over the year ended 30 June 2023. It will be put
to an advisory vote at the 2023 AGM. Certain sections of the Annual
report on remuneration have been subject to audit.
The Directors’ Remuneration report has been prepared in accordance with The Companies (Directors’ Remuneration Policy and Directors’
Remuneration Report) Regulations 2019 (applying to financial years starting on or after 10 June 2019), the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations (Amended) 2013 and the Financial Conduct Authority’s Listing Rules. The
auditor is required to report on the remuneration data disclosed in the Directors’ Remuneration report section and state whether, in its
opinion, that part of the report has been properly prepared in accordance with relevant provisions of the Companies Act 2006 (as amended).
Directors’ remuneration and single-figure annual remuneration (audited)
The remuneration of the directors serving during the financial year, together with 2022 comparative figures, was as follows:
Salaryandfees
£000
Taxable
benefits
1
£000
Pensions
2
£000
Totalfixed
remuneration
£000
Annual
bonus
£000
LTIP
£000
Sharesave
£000
Total variable
remuneration
£000
Total
remuneration
£000
2023
3
20222023202220232022202320222023202220232022
4
202320222023202220232022
Executivedirectors
Bill Hocking4804633238375215024015511,507884––1,9081,4352,4291,937
1 Includes the value of benefits such as car allowance and medical insurance.
2 This is a salary supplement paid to the directors in lieu of direct pension contributions.
3 Salaries for the Non-executive Directors increased by 4.5% and the salaries for the Executive Directors increased by 4.53%. This is below the average salary increase
across the workforce of 5%.
4 The 2022 LTIP awards vested on 13 March 2023. The LTIP figures reported in 2022 and the corresponding single figure for that year were based on an estimated
share price, using share price over the three months to 30 June 2022. These have now been updated with the actual value at vesting of £884,000 for Bill Hocking and
£718,000 for Andrew Duxbury, using the share price as at the date of vesting of £1.70.
gallifordtry.co.uk
109
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Remuneration Committee report continued
Annual report on Remuneration continued
2023 Annual bonus outcome (audited)
For the financial year ended 30 June 2023, the annual bonus measures, targets, weightings and performance are set out in the table below.
Senior management was subject to similar targets, which were applied to their respective business performance.
Measure
Performancetarget
Weighting
Threshold(%of
maximumbonus)
On-target(%of
maximumbonus)
Maximum(%of
maximumbonus)
Actual
performance
Payout%of
bonusmaximum
Pre-exceptional full year Group profit before tax45%£22.0m (0%)£23.2m (22.5%)£26.7m (45%)
2
£23.4m24%
Pre-exceptional half year Group profit before tax15%£8.1m (0%)£9.0m (7.5%)£10.3m (15%)£11.7m15%
1 The ESG metrics are aligned to the Group’s published strategy with the targets based on industry guidelines, averages or the Group’s stated ambition. The 2021 carbon
comparative metric has been restated to incorporate a full year’s operation of nmcn (acquired October 2021).
2 Pre-exceptional full year Group profit before tax excluding the loss arising on a one-off contract settlement.
The Group achieved a strong performance against targets set at the start of the financial year. Taking into account the Group’s profitability
and enhanced dividends to shareholders, the Committee determined that the bonus level produced by the scorecard of 70.4% is an
appropriate reward given the Group’s operational and financial performance. This treatment is consistent with that applied for all
participants of the ABP. The ABP 22/23 bonus target for the first time incorporated a 12% target for ESG factors which include: people,
carbon emission, community and supply chain metrics. Under the approved Policy, the Committee may, at its discretion, acting fairly and
reasonably, adjust bonus outcomes if it considers the payout is inconsistent with the Group’s performance during the year, taking into
account factors including safety and ESG. The Pre-exceptional full year Group profit before tax used to calculate the 2023 annual bonus
outcome excludes the settlement arising from the resolution of a long-standing dispute over three contracts which is considered to be in
the best interest of all stakeholders. In considering bonus awards the Committee took the Group’s health and safety performance and ESG
initiatives into consideration. The Group achieved an overall Accident Frequency Rate (“AFR”) of 0.09 for 2022/23, (AFR for 2021/22: 0.06)
with eight business units achieving an AFR of zero during the year.
The Committee determined that, in respect of the year to 30 June 2023, the resulting annual bonus awards were as follows:
On-targetbonus
(%ofsalary)
Maximumbonus
(%ofsalary)
Actual bonus
payablefor
2022/23
(£000)
Cash
(£000)
Shares
(£000)
Bill Hocking84.5%120%401292109
Andrew Duxbury 70.4%100%27221953
Two-thirds of the bonus earned in excess of the 50% of salary threshold is required to be deferred into restricted shares. Although
beneficially held by the participants, the allocated restricted shares are legally retained by the Employee Share Trust and are subject to
forfeiture provisions, unless otherwise agreed by the Committee. Subject to continued employment, the restricted shares are legally
transferred to participants on the third anniversary of allocation. Recovery provisions apply at any time within the three-year period post-
vesting or payment of cash bonuses in circumstances or error, material misstatement, misconduct, reputational damage or corporate failure
as a result of poor risk management.
110
LTIP awards vesting in September 2023 (audited)
The LTIP awards granted to Bill Hocking and Andrew Duxbury on 23 September 2020 were based 75% on underlying EPS performance and
25% on average month-end cash as a percentage of annual turnover over the three years to 30 June 2023. In total, 97% of the maximum
award vested as a result of the performance achieved. The Committee was satisfied that this outcome reflected the true performance of the
Group and no discretion was applied. The awards will be subject to a two-year post vesting holding period in accordance with the existing
Remuneration Policy. More details on each of the performance conditions are set out below.
Threshold
EPScondition
(25%vesting)
StretchEPS
condition
(100%
vesting)
Actual
performance
Threshold
average
month-
end cash
condition
(25%vesting)
Stretch
average
month-
end cash
condition
(100%
vesting)
Actual
performance
%ofoverall
awardvesting
Valueof
award
vesting
2
Element
ofvalue
attributable
to share
growth
2
Bill Hocking12.6p15.4p16.6p8%10%9.7%97.2%1,507851
Andrew Duxbury 12.6p15.4p16.6p8%10%9.7%97.2%1,224691
1 As a percentage of annual turnover.
2 Estimated based on the average share price over the three months to 30 June 2023.
Directors’ share plan interests (audited)
Outstanding awards held by Bill Hocking and Andrew Duxbury are detailed in the table below.
1 Awards are based on a maximum percentage of salary. The number of shares shown in the table represents the maximum number of shares, ie 150% of salary.
2 In accordance with the rules of the Annual Bonus Plan, the average of the Company’s closing share price for the five business days following (and including) the
announcement of the annual results on 16 September 2020 was 84.42 pence.
3 In accordance with the rules of the Annual Bonus Plan, the average of the Company’s closing share price for the five business days following (and including) the
announcement of the annual results on 16 September 2021 was 176.94 pence.
4 In accordance with the rules of the Annual Bonus Plan, the average of the Company’s closing share price for the five business days following (and including) the
announcement of the annual results on 21 September 2022 was 160 pence.
gallifordtry.co.uk
111
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Awards granted during the year (audited)
On 23 September 2022, the following conditional LTIP awards were made to Bill Hocking and Andrew Duxbury.
DirectorDateofgrant
Numberof
shares awardedBasisofaward
Share price used to
determinelevelofaward£Facevalue£
Bill Hocking23 September 2022442,546150% of base salary£1.61712,500
Andrew Duxbury23 September 2022359,627150% of base salary£1.61579,000
The performance conditions attached to these awards made in September 2022 are as follows:
DateofgrantPerformanceconditions
September2022Vesting of up to 75% of the award is based on underlying EPS. 25% of the element will vest for 23.2p, increasing to 100% vesting on a
straight-line basis if 28.4p underlying EPS is achieved during the final year of the three-year performance period (1 July 2024 to 30 June
2025).
Vesting of up to 25% of the award is based on average month-end cash as a percentage of annual turnover in the year ending 30 June
2025. 8% would generate 25% of the element vesting and 10% would generate 100% vesting on a straight-line basis.
Any shares which vest will be subject to a two-year post-vesting holding period, in accordance with the Remuneration Policy.
Malus and clawback apply at any time within a three-year period post-vesting, in the case of material misstatement, misconduct,
reputational damage or corporate failure as a result of poor risk management.
Directors’ share interests (audited)
As at 30 June 2023, the Directors held the following beneficial, legal and unvested ABP interests in the Group’s ordinary share capital.
Legally owned
1
Total
Measure30.6.2330.6.22LTIP(unvested)
Deferredbonus
awards(unvested)30.6.23
%ofsalaryheld
under share
ownership
guidelines
2
Executivedirectors
Bill Hocking391,555119,7781,671,363252,5592,315,477252%
Andrew Duxbury245,78824,9551,358,139199,6921,803,619215%
Non-executivedirectors
Terry Miller3,5662,066––3,566n/a
Marisa Cassoni–––––n/a
Alison Wood
3
–––––n/a
Sally Boyle
3
–––––n/a
Michael Topham
3
–––––n/a
1 Either held by the individual or connected persons.
2 Under the current Remuneration Policy, the share ownership guideline for executive directors is 200% of base salary.
3 Alison Wood joined the Board on 1 April 2022 and Sally Boyle joined the Board on 1 May 2022. Michael Topham joined the Board on 1 June 2023.
There were no changes in the directors’ interests from 30 June 2023 to the date of this Annual Report.
Remuneration Committee report continued
Annual report on Remuneration continued
112
Performance graph
The graph shows the total shareholder return (“TSR”) for Galliford Try shares over the past 10 financial years. It shows the value to 30 June
2023 of £100 invested in Galliford Try on 30 June 2013, assuming dividends are reinvested in the Company’s shares, compared with the
value of £100 invested in the FTSE All-Share Index, this being a broad-market index of which the Company has been a constituent over the
full period shown.
The closing mid-market quotation for the Company’s shares on 30 June 2023 was 194.6p. The high and low during the year were 205.0p
and 145.0p.
The total gross remuneration of the Chief Executive and the percentage achieved of the maximum ABP and LTIP awards are shown in the
table below for the past 10 financial years.
20142015
1
2016201720182019
2
2020
3
202120222023
2023ChairChiefExecutive
Total remuneration (£000)3,2122,8111,2621,4611,0431,4488246601,0271,9372,429
Annual bonus (% of maximum)97%79%74%74%46.3%86.5%57.0%36.7%100.0%100%70.4%
LTIP (% of maximum)63%63%47%–16.5%36.6%16.5%––89%97.2%
1 Peter Truscott was appointed Chief Executive on 1 October 2015. His predecessor, Greg Fitzgerald, was Chief Executive until 21 October 2014, and Executive Chair
until 31 December 2015. Peter Truscott stepped down as Chief Executive and from the Board on 26 March 2019.
2 Graham Prothero was appointed Chief Executive on 26 March 2019, succeeding Peter Truscott. He stepped down from the Board and as Chief Executive following the
successful completion of the sale of the housebuilding divisions to Vistry Group plc on 3 January 2020.
3 Bill Hocking was appointed Chief Executive on 3 January 2020. A full-year remuneration figure based on the aggregate paid to Bill and Graham is shown here to aid
comparison.
Total Shareholder Return graph
Value(£)(rebased)
0
50
100
150
200
250
300
350
400
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Source: Datastream from Refinitiv
Galliford Try
FTSE AllShare
gallifordtry.co.uk
113
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
CEO pay ratios
Under Option B (gender pay data), three employees have been identified as the best equivalents to represent the lower, median and upper
quartiles. Option B provides a clear methodology involving fewer adjustments to calculate full-time equivalent earnings.
The CEO figure includes earnings from the Long-Term Incentive Plan. Long-term incentives are operated for the most senior Group
employees only, namely, those responsible for strategy development and execution. The payouts from such plans are expected to be
volatile from cycle to cycle.
Compared to 2021/22, there were increases in all three ratios, reflecting the fact that a greater proportion of the Chief Executive’s total
reward is linked to annual performance through a higher annual bonus opportunity than that of the average employee. The Committee is
comfortable that the resulting calculations are representative of pay levels at the respective quartiles and that the applicable relativities are
appropriate given the profile of the workforce.
Percentage change in remuneration of executive directors and non-executive directors
The table below shows the percentage change in salary or fee, taxable benefits and annual bonus of each individual director in respect of
the financial years ended 30 June 2022 and 30 June 2023:
Yearended30June
202320222021
Salary
change
1
Benefits
change
2
Bonus
change
Salary
change
4
Benefits
change
Bonus
change
4
Salary
change
6
Benefits
change
Bonus
change
6
Executivedirectors
Bill Hocking3.7%50.0%(27.2)%2.9%203.3%2.0%119.5%(85.5)%449.8%
Andrew Duxbury3.7%0.0%(27.1)%2.6%(70.0)%1.9%4.9%(70.9)%46.5%
Non-executivedirectors
Terry Miller3.0%n/an/a7.5%n/an/a15.3%n/an/a
Marisa Cassoni3.7%n/an/a3.0%n/an/a(1.1)%n/an/a
Alison Wood
3
n/an/an/an/an/an/an/an/an/a
Sally Boyle
3
n/an/an/an/an/an/an/an/an/a
Michael Topham
5
n/an/an/an/an/an/an/an/an/a
Formerdirectors
Peter Ventress(77.7)%n/an/a1.9%n/an/a5.0%n/an/a
Gavin Slark(22.2)%n/an/a3.0%n/an/a5.0%n/an/a
P50 median employee7.3%7.9%(52.4)%2.1%(11.1)%40.0%24.2%4.5%50.0%
1 Salaries for the Non-executive directors were increased by 4.5% with effect from 1 April 2023. Salaries for the Executive Directors were increased by 4.53%.
2 Benefits received include pension contributions (or cash equivalent), company car (or equivalent cash allowance), and private medical insurance. Executive directors
and senior management, subject to invitation and approval by the Committee, may participate in the ABP and LTIP.
3 The percentage change is not shown for Alison Wood or Sally Boyle in 2022 as they were appointed to the Board on 1 April 2022 and 1 May 2022 respectively and
there was no prior year remuneration to compare against. The percentage change in 2023 is not shown as it compares to a part year in 2022.
4 Please see page 98 in our 2022 Annual Report for further information.
5 The percentage change is not shown for Michael Topham as he was appointed to the Board on 1 June 2023 and there is no prior year remuneration to compare against.
6 Please see page 83 in our 2021 Annual Report for further information.
Remuneration Committee report continued
Annual report on Remuneration continued
114
To allow for comparison, the Committee has elected to compare the total remuneration of the P50 median employee (median) from this
year (2022/23) to that used last year. The Committee continues to ensure that the wider total package on offer to employees remains
competitive at all levels.
Relative importance of spend on pay
2021/222022/23Change
Total overall spend on pay (£m)213.0256.743.7m
Dividends (£m)6.39.63.3m
Share buyback (£m)–10.610.6m
Group corporation tax charge (£m)
1
1.73.1£1.4m
Effective tax rate (%)8.915.16.2 ppts
1 Pre-exceptional total tax.
The equivalent total overall spend on pay in 2022/23 is disclosed in note 5 to the financial statements. The total overall spend on pay
equates to average remuneration per staff member of £68,508 per annum as at 30 June 2023 (2022: £65,500).
Composition of the Remuneration Committee and attendance
In addition to the Chair, Terry Miller, the other Committee members were Marisa Cassoni, Gavin Slark*, Peter Ventress*, Alison Wood , Sally
Boyle and, from 1 June 2023, Michael Topham. The General Counsel & Company Secretary acts as Secretary to the Committee. The Chief
Executive has a standing invitation to attend all Committee meetings, although each meeting commences with the Non-executive directors
meeting without Executive management present. The HR Director attends certain meetings at the invitation of the Committee. No director
nor the General Counsel & Company Secretary is present when his or her own remuneration is being considered. Attendance at Committee
meetings is shown in the table on page 80.
The Committee is governed by formal terms of reference agreed by the Board and is composed solely of Non-executive directors. The terms
of reference were reviewed during the year and are available on the Group’s website (www.gallifordtry.co.uk).
Remuneration advice and advisers
The Committee is informed of key developments and best practice in the field of remuneration and obtains advice from independent
external consultants, when required. Mercer Limited (“Mercer”) was the Committee’s remuneration consultant throughout the year. Fees
paid to Mercer during the financial year were £37,660 (2022: £16,250).
Mercer does not provide any other services to the Group, although Mercer is part of Marsh & McLennan Companies, a subsidiary of which
Marsh JLT Specialty Limited, provides insurance broking services to the Group. The Committee is satisfied that these services do not
impinge on Mercer’s independence. Furthermore, Mercer is a signatory to the Remuneration Consultants’ Code of Conduct, which requires
that its advice be objective and impartial.
The General Counsel & Company Secretary also advises the Committee as necessary and, where appropriate, makes arrangements for the
Committee to receive independent legal advice at the request of the Chair.
Employee Share Trust and dilution
The Employee Share Trust (“EST”) is the primary mechanism by which shares required to satisfy the Executive incentive plans are provided.
Following the announcement of the 2022 full-year results in September 2022, the EST entered into a six-month trading plan with the
Company from September 2022 to March 2023. The EST instructed Peel Hunt LLP to acquire ordinary shares of 50 pence each in the
Company for the Trust. Purchases were made at the best price and limited to 200,000 shares in any single calendar month. The shares are
to be used to satisfy potential future vesting(s) to be made to employees under the various Executive share incentive schemes.
As at 30 June 2023, the EST held 3,705,343 ordinary shares in the capital of the Company (3.53%) (2022: 3,541,603 shares). Under the
terms of the Trust Deed, the Trust may only hold up to a maximum of 5% of the issued shares in the Company.
During the financial year, 2,114 new shares were issued arising from share scheme-related activities under the SAYE share option scheme.
As at 30 June 2023, the total number of shares outstanding under the SAYE share option scheme was 3,481,546. The Group has complied
with the dilution guidelines of the Investment Association (“Guidelines”).
Applying the Guidelines, the Group has 6.68% headroom against the 10% in 10 years’ rule and, on the basis that the Group’s practice is that
all awards granted pursuant to discretionary plans are satisfied using shares purchased in the market, 5% headroom against the ‘5% in 10
years’ rule for discretionary plans.
* Peter Ventress and Gavin Slark stepped down on 21 September 2022 and 31 March 2023 respectively.
gallifordtry.co.uk
115
Financial statementsGovernanceStrategic report
99.89%
64.43%
85.73%86.03%
13.97%14.27%35. 57%0.11%
99.86%
0.14%
20212022202020192018
Votescast
(%)
Galliford Try Annual Report and Financial Statements 2023
Remuneration Committee report continued
Annual report on Remuneration continued
Shareholder voting on the Directors’ Remuneration Report
The Committee takes account of annual shareholder voting trends in connection with the
Directors’ Remuneration report. Votes cast in support of the annual advisory resolution to
approve the Directors’ Remuneration report during the past five AGMs are included in the
chart opposite.
The Board will continue to engage with shareholders to ensure their views are fully
understood and considered and can be taken into account by the Committee in the future.
The Committee and Board are grateful to shareholders for the strong support provided.
The current Policy was approved by 99.66% of shareholders who voted at the 2020 AGM.
Forward-looking implementation of Policy
Basesalaries
The 2023/24 salary review was completed in April 2023. The Committee carefully scrutinised pay and conditions across the Group. Taking
into account market conditions, peer group comparisons and the Group’s overall performance, the overall pay budget increased by 5.0%.
With effect from 1 April 2023, Bill Hocking’s annual salary increased from £475,000 to £496,500, an increase of 4.53%. With effect from
1 April 2023, Andrew Duxbury was also awarded an annual salary increase of 4.53%, taking his annual salary from £386,000 to £403,500.
These increases were below the average pay increase across the workforce.
ABP
For the financial year to 30 June 2024, the Committee has determined that the existing bonus structure remains appropriately aligned to
corporate strategy. It will therefore remain in its current form, with an opportunity of 120% of salary for the Chief Executive, and 100% for
other executive directors.
Bonus outcomes will be subject to overall Committee discretion, taking into account factors including health and safety and the underlying
performance of the Group. The Committee intends to continue to include ESG annual bonus measures in 2023/24 aligned to the Group’s strategy
on ESG, with an ESG target in total of 12%. The ESG measures will comprise order book, employees, carbon, community and supply chain.
LTIP
Any award granted to the executive directors in 2023 will be within the approved Remuneration Policy and based on performance metrics,
with 75% based on earnings per share and 25% on average month-end cash as a percentage of revenue.
Performance measures applied over a three-year performance period to 30 June 2026 are:
25% of the EPS element will vest if underlying EPS is 31.8p, increasing to 100% vesting on a straight-line basis if 34.5p is achieved.
25% of the cash element will vest if average month-end cash is 8% of revenue, increasing to 100% vesting on a straight-line basis if 10% is
achieved.
Chair and Non-executive fees
The Committee determined that the Chair’s fee for 2023/24 would be increased by 4.5%. In addition, and following a review of the non-
executive directors’ fees by the Board, it was agreed that the non-executive directors’ fees would increase by 4.5% from 1 April 2023.
Accordingly, the annual fees effective from 1 April 2023 are as follows:
20232022Increase/Change%
Chair
1
£182,875£206,128
2
(11.3%)
1,2
Non-executivedirectors
Base fee£48,803£46,7014.5%
Additional fees:
Senior Independent Director£4,870£4,6604.5%
Chairs of Board Committees£9,178£8,7834.5%
Chair of Employee Forum and Stakeholder Steering Committee
3
£9,178£8,7834.5%
1 Alison Wood was appointed as Non-executive Director on 1 April 2022 and her salary on 1 July 2022 was £46,701. Alison Wood became the new Chair on 21
September 2022 after Peter Ventress had stepped down. As of 21 September 2022 the Chair’s basic fee was £175,000. Alison Wood received a 4.5% fee increase on
1 April 2023 in line with the rest of the Board. Alison Wood received no other benefits in connection with her position as Chair.
2 On 1 April 2022 Peter Ventress was Chair and received a fee of £206,128. Peter Ventress received no benefits in connection with his position as Chair, other than
membership of the Group’s medical insurance plan.
3 On 1 June 2023 Sally Boyle became Chair of the Employee Forum and received an additional fee of £4,600 pa. Terry Miller received the fee for Chair of the Employee
Forum and Stakeholder Steering Committee up to 1 June 2023.
For and on behalf of the Board
Terry Miller
Remuneration Committee Chair
20 September 2023
116
Directors’ Report
The directors present their Annual Report and audited
financial statements for the Group for the financial year
ended 30 June 2023.
Principal activities
Galliford Try is a trading name of Galliford Try Holdings plc, a
leading UK construction group which has a premium listing and
whose shares are traded on the Main Market of the London Stock
Exchange. The Group operates as Galliford Try and Morrison
Construction and carries out building and infrastructure projects
with clients in the public, private and regulated sectors across the
UK. Galliford Try Holdings plc, registered in England and Wales with
company number 12216008, is the Parent Company of the Group.
More detailed information regarding the Group’s activities is
provided on pages 1 to 73. The Group’s principal subsidiaries and
joint ventures are shown in note 33 to the financial statements.
Strategic report
The Strategic report can be found on pages 1 to 73. It contains
an indication of the directors’ view on likely future developments
in the Group’s business. In addition, and in accordance with the
Companies, Partnerships and Groups (Accounts and Non-Financial
Reporting) Regulations 2016, the Strategic report contains
information on employees, social and environmental matters, human
rights and anti-corruption and anti-bribery matters, as well as a
description of the Group’s policies and where these are located.
In accordance with section 414CZA of the Companies Act 2006, the
Strategic report contains a section 172 (1) statement describing how
directors have had regard to the matters set out in section 172 (1) (a)
to (f) of the Companies Act 2006 when performing their duty under
section 172. Please refer to pages 70 to 73.
The Annual Report and financial statements use financial and
non-financial key performance indicators wherever possible and
appropriate.
Corporate governance report
The Corporate governance report on pages 74 to 89 is the corporate
governance statement for the purposes of Disclosure Guidance and
Transparency Rule 7.2.1.
Results, dividends and capital
The pre-exceptional profit for the year before income tax was
£20.6m, as shown in the consolidated income statement on page
130. On 8 March 2023, the Board declared an interim dividend of
3.0p per share, which was paid to shareholders on 14 April 2023.
On 8 June 2023, the Board declared a special dividend of 12.0p per
share, payable on 27 October 2023 to shareholders on the register
as at 6 October 2023. The Board has proposed a final dividend of
7.5p per share. Subject to approval by shareholders, this will be
paid on 8 December 2023 to shareholders on the register at 10
November 2023, resulting in a total dividend in 2023 of 22.5p per
share. Dividend cover is expected to be 1.8 times earnings.
Please refer to page 47 for an overview of the Group’s capital
structure and funding.
Share capital, authorities and restrictions
The Company has one class of ordinary share capital, with a nominal
value of 50p. The ordinary shares rank pari passu in respect of
voting and participation and are traded on the Main Market of the
London Stock Exchange.
At 30 June 2023, the Company had 104,869,194 ordinary shares in
issue. Votes may be exercised at general meetings of the Company
by members in person, by proxy or by corporate representatives
(in relation to corporate members). The Company’s Articles of
Association (the “Articles”) set a deadline for submitting proxy forms
(electronically or by paper) of not less than 48 hours, taking no
account of any part of a day that is not a working day, before the
time appointed for holding the general meeting or the adjourned
meeting (as the case may be).
The directors are authorised at the AGM each year to issue shares,
to allot a limited number of shares in the Company for cash other
than to existing shareholders, and to make market purchases of
shares within prescribed limits. The current authorities will expire
at the AGM in November 2023. Resolutions to be proposed at the
AGM will renew these authorities, which are explained in the Notice
of 2023 AGM sent separately to shareholders.
gallifordtry.co.uk
117
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Directors’ Report continued
Share capital, authorities and restrictions
continued
On 14 December 2022 and 14 March 2023, the Company issued
882 and 1,232 shares respectively following the exercise of options
under the Company’s Sharesave Scheme. To the date of this report
the Company has purchased 7,985,696 shares as part of the share
buyback programme which commenced in September 2022. All
of these shares were cancelled. No further shares were issued or
purchased by the Company during the financial year or to the date
of this Annual Report.
There are no restrictions on transferring the Company’s shares,
except for certain shares held by the Employee Share Trust (“EST”),
which are restricted during the performance periods of relevant
Group share plans. Directors and persons discharging managerial
responsibilities are also periodically restricted in dealing in the
Company’s shares under the Group’s share dealing policy, reflecting
the requirements of the Market Abuse Regulation. In certain
specific circumstances, the directors are permitted to decline to
register a transfer in accordance with the Articles. There are no
other limitations on holdings of securities, and no requirements to
obtain the approval of the Company, or other holders of shares in
the Company, prior to the share transfer. The Company is not aware
of any agreements between holders of shares that may restrict the
transfer of shares or voting rights.
There are no shares carrying specific rights relating to control of
the Company. The EST holds shares in the Company in connection
with Group share plans which have rights relating to control of the
Company that are not exercisable directly by the employee. The EST
abstains from voting in respect of these shares. The EST currently
holds 3.53% of the issued share capital of the Company for the
purposes of satisfying employee share options or share awards.
Articles of Association
The Articles, adopted pursuant to a resolution passed on 5
November 2019, set out the Company’s internal regulations and
define various aspects of its constitution, including the rights of
shareholders, procedures for appointing and removing directors,
and the conduct of directors and general meetings.
In accordance with the Articles, directors can be appointed or
removed either by the Board or shareholders in general meeting.
Amendments to the Articles require shareholder approval by
passing a special resolution in a general meeting. Copies of the
Articles are available by contacting the General Counsel & Company
Secretary at the registered office.
Significant direct and indirect holdings
As at 30 June 2023, being the date of this Annual Report, the Group
had been made aware of the following beneficial interests in 3% or
more of the Company’s ordinary share capital:
ShareholderInterest% capital
Premier Miton Group plc11,370,28810.96
Aberforth Partners LLP 12,525,81612.02
Standard Life Aberdeen plc6,436,8905.80
J O Hambro Capital Management Limited5,738,9295.17
Dimensional Fund Advisors LP5,552,6974.97
Ameriprise Financial Inc.5,496,8474.95
Brewin Dolphin Ltd5,169,2664.66
Between 1 July 2023 and 20 September 2023, the further
notifications received are outlined below and based on the
Company’s issued share capital at the time of notification:
Shareholder Interest%capital
Aberforth Partners LLP 12,525,81612.02
Premier Miton Group plc11,370,28810.96
J O Hambro Capital Management Ltd10,348,87410.01
Change of control provisions
All the Group’s share plans contain provisions relating to a change of
control. The respective plan rules permit outstanding awards to vest
on a proportional basis and then become exercisable in the event of
a change of control, subject to the satisfaction of any performance
conditions and Remuneration Committee approval. Other than in
relation to share schemes as described above, the Group has not
entered into any agreements with its directors or employees which
provide for compensation for loss of office or employment in the
event of a takeover or change of control of the Group.
The agreements governing the Group’s joint ventures all have
appropriate change of control provisions, none of which is
significant in the context of the wider Group.
Directors’ interests and indemnities
Summary biographies of the directors of the Company as at 30
June 2023 are on pages 76 to 77. The directors’ interests in the
Company’s share capital are set out on page 112 and details of
executive directors’ service contracts and Non-executive directors’
letters of appointment can be found on page 107.
The Group operates a formal procedure for disclosing, reviewing
and authorising directors’ actual and potential conflicts of interest,
in accordance with the Companies Act 2006. In addition, the Board
reviews and authorises conflicts of interest, as necessary, on an
annual basis.
The Group maintained Directors’ and Officers’ Liability insurance on
behalf of the directors and General Counsel & Company Secretary
throughout the financial year. In addition, individual qualifying third-
party indemnities are provided to the directors and General Counsel
& Company Secretary, which comply with the provisions of section
234 of the Companies Act 2006 and were in force throughout the
year and up to the date of signing this Annual Report.
118
Employees
The Group is committed to best-practice employment policies,
which promote equal opportunities for all employees. We value
everyone as an individual, recognising that everyone is different and
has different needs at work. We respect people’s differences and
treat everyone with dignity and respect. We aim to create a culture
in which everyone feels valued and is motivated to give their best.
The Group gives full and fair consideration to applications
for employment from disabled persons, taking into account
their aptitudes and abilities. The Group has signed up to the
Government’s Disability Confident scheme. We carry out regular
workplace assessments and provide occupational health checks and
advice to support both employees and line managers. Appropriate
arrangements are made for the continued training and employment,
career development and promotion of disabled persons. If existing
members of staff become disabled, the Group endeavours to
continue employment, either in the same or an alternative position,
with appropriate retraining and occupational assistance being given
if necessary.
Employee engagement and consultation is encouraged through
the Employee Forum (see page 70), as well as regular informal
discussions and feedback, formal annual appraisals, business unit
staff forums and periodic employee surveys.
Details of where to find information regarding the Group’s
employees, remuneration policies, employment practices and
employee involvement are provided in the Strategic report on
pages 1 to 73 and the Remuneration Policy and Report on pages
98 to 116.
Details of where to find information on other matters of importance
to stakeholders such as environmental, social and community
matters, human rights and anti-corruption, related policies and their
impact can also be found in the Strategic report.
Significant agreements
There are no persons with which the Group has contractual or other
arrangements which are essential to its business.
Charitable and political donations
For information regarding charitable donations made through
employees’ volunteering or donation of materials, please refer to the
Strategic report on pages 34 to 35.
The Group’s policy is to avoid making political donations of any
nature and none were made during the financial year. The Group
notes the wide application of Part 14 of the Companies Act 2006,
but does not consider the construction industry bodies of which it is
a member to be political organisations for the purposes of the Act.
Emissions
Details of the Group’s greenhouse gas emissions for the financial
year can be found on page 31 and are included by reference in
this report.
Creditor payment policy
The Group’s policy is to agree payment terms contractually with
suppliers and sub-contractors, ensure the relevant terms of
payment are included in contracts, and to abide by those terms
when satisfied that goods, services or assets have been provided in
accordance with the agreed contractual terms. The Group remained
a signatory to the Prompt Payment Code throughout the financial
year which contains, among other things, commitments to pay
suppliers within agreed contract terms.
Financial instruments
Further information regarding the Group’s financial instruments,
including interest rate hedges, related policies and a consideration
of its liquidity and other financing risks, can be found in the
Financial review from page 45 and in note 23 to the financial
statements.
Important developments during the year
On 8 July 2022, the Group acquired MCS Controls Systems Limited,
a leading systems integrator to the industrial and utilities sectors,
for a consideration of £1. For more details see note 30 to the
financial statements.
On 18 November 2022, the Group acquired Ham Baker’s asset
inspection, maintenance and screens and distributor operations
for consideration of £225,000. For more details see note 30 to the
financial statements.
On 8 June the Group announced it had agreed settlement terms in
respect of its long-standing dispute concerning three contracts with
entities owned by a major infrastructure fund. The settlement brings
to a conclusion a complex and challenging muti-contract dispute.
As a result of the settlement the Group received a cash payment of
£26m (excluding VAT) and has recorded an impairment of financial
assets related to this of £2.8m in the current financial year.
Going concern
In accordance with the Financial Reporting Council’s Guidance
on Risk Management, Internal Control and Related Financial and
Business Reporting published in 2014, the requirements of the Code
and Listing Rule 9.8.6(3), the directors have conducted a rigorous
and proportionate assessment of the Group’s ability to continue
in existence for the foreseeable future. This has been reviewed
during the financial year and the directors have concluded that
there are no material uncertainties that may cast significant doubt
on the Group’s ability to continue as a going concern. Furthermore,
the Group has adequate resources and visibility as to its future
workload, as explained in this Annual Report. As a result, the
Directors are satisfied that the Group has adequate resources
to meet its obligations as they fall due for a period of at least 12
months from the date of approving these financial statements and,
accordingly, is able to adopt the going concern basis in preparing
these financial statements.
gallifordtry.co.uk
119
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Directors’ Report continued
AGM
The 2023 AGM will be held at Peel Hunt LLP, 7th floor, 100
Liverpool Street, London, EC2M 2AT on Friday 10 November 2023
at 11.00am. The Notice convening the AGM, sent to shareholders
separately, explains the items of business which are not of a
routine nature.
Further information on arrangements for the AGM and voting
instructions will be set out fully in the Notice of AGM and Form
of Proxy.
Fair, balanced and understandable
In accordance with the principles of the Code and as further
described on page 97, the Group has arrangements in place to
ensure that the information presented in this Annual Report is fair,
balanced and understandable. The directors consider, on the advice
of the Audit Committee, that the Annual Report, taken as a whole,
is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s performance,
position, business model and strategy.
Approval of report
This Directors’ report, the Strategic report, and the Corporate
Governance report and Directors’ Remuneration report were
approved by the Board of Directors on 20 September 2023.
For and on behalf of the Board
Kevin Corbett
General Counsel & Company Secretary
20 September 2023
120
Statement of directors’ responsibilities
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under company law the directors have
prepared the Group and Parent Company financial statements in
accordance with UK adopted International accounting standards.
Under company law, the directors must not approve the financial
statements, unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Parent Company and of
the profit or loss of the Group and Parent Company for that period.
In preparing the financial statements, the directors are required to:
+select suitable accounting policies and then apply them
consistently;
+make judgements and accounting estimates that are reasonable
and prudent;
+state whether they have been prepared in accordance with
UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006; and
+prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Group and Parent
Company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and Parent
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Group and Parent Company
and enable them to ensure that the financial statements and the
Directors’ Remuneration Report comply with the Companies Act
2006 and, as regards the Group financial statements, Article 4 of
the IAS Regulation. They are also responsible for safeguarding the
assets of the Group and the Parent Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The directors are responsible for the maintenance and integrity of
the Group and Parent Company’s website. Legislation in the UK
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
Parent Company’s performance, position, business model
and strategy.
Each of the directors, whose names and functions are listed on
pages 76 and 77, confirms that to the best of their knowledge:
+the Parent Company financial statements, which have been
prepared in accordance with UK adopted International
Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and profit of the Parent Company;
+the Group financial statements, which have been prepared
in accordance with UK adopted International Accounting
Standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Group; and
+the Strategic report contained on pages 1 to 73 includes a fair
review of the development and performance of the business and
the position of the Group and Parent Company, together with a
description of the principal risks and uncertainties that it faces.
In the case of each director in office at the date the Directors’
Report is approved:
+so far as the director is aware, there is no relevant audit
information of which the Group and Group’s auditors are
unaware; and
+they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the Group and Group’s auditors
are aware of that information.
This confirmation is given and should be interpreted in accordance
with section 418 of the Companies Act 2006.
For and on behalf of the Board
Bill Hocking
Chief Executive
20 September 2023
Forward-looking statements
Forward-looking statements have been made by the directors in good faith using information up until the date on which they
approved this Annual Report. Forward-looking statements should be regarded with caution due to uncertainties in economic trends
and business risks. The Group’s businesses are generally not affected by seasonality.
gallifordtry.co.uk
121
Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Independent auditor’s report
to the members of Galliford Try Holdings plc
Opinion on the financial statements
In our opinion:
+the financial statements give a true and fair view of the state of
the Group’s and of the Parent Company’s affairs as at 30 June
2023 and of the Group’s profit for the year then ended;
+the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
+the Parent Company financial statements have been properly
prepared in accordance with UK adopted international
accounting standards and as applied in accordance with the
provisions of the Companies Act 2006; and
+the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We have audited the financial statements of Galliford Try Holdings
plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 30 June 2023 which comprise the consolidated income
statement, the consolidated statement of comprehensive income,
the balance sheets, the consolidated and the company statement
of changes in equity, statements of cash flows and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted international
accounting standards and as regards the Parent Company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of
our report. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion. Our
audit opinion is consistent with the additional report to the audit
committee.
Independence
Following the recommendation of the audit committee, we
were appointed by the members on 4 November 2019 to audit
the financial statements for the year ended 30 June 2020 and
subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is 4 years,
covering the years ended 30 June 2020 to 30 June 2023. We
remain independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance
with these requirements. The non-audit services prohibited by that
standard were not provided to the Group or the Parent Company.
122
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Group and the
Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
+We assessed the appropriateness of the Group’s cash flow
forecasts in the context of the Group’s secured ongoing
contracts, the secured new work and forecast potential work
which were agreed to the Board approved forecasts.
+We evaluated the Directors’ downside sensitivities including
delays to construction resulting in reduced volume of work and
impact of materials and labour price inflation.
+We assessed the actual cash performance against forecasts
for the current financial year and post year end to evaluate the
Directors’ accuracy and achievability of the forecasts prepared.
+We evaluated the adequacy of the disclosures within the
Directors’ report in relation to the specific risks posed, the
scenarios the Directors have considered and conclusions made.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group
and the Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in
the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
Overview
Coverage97% (2022: 94%) of Group profit before tax
97% (2022: 99%) of Group revenue
95% (2022: 92%) of Group total assets
Key audit
matters
20232022
Revenue and profit recognition
for construction contractsXX
Recognition and recoverability of
claims and variations XX
Accounting for acquisition of
NMCN*X
* Not considered a KAM for the current year as it relates to a
prior year acquisition and the acquisitions in the current year
are not considered a KAM.
MaterialityGroup financial statements as a whole
£3.5m (2022: £1.9m) based on 0.26%
(2022: 0.15%) of revenue.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group’s system of internal
controls, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there was
evidence of bias by the Directors that may have represented a risk
of material misstatement.
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the Group financial
statements as a whole, taking into account the geographic structure
of the Group, the accounting processes and controls, and the
industry in which the Group operates.
In establishing the overall approach to the Group audit, we assessed
the audit significance of each reporting unit in the Group by
reference to both its financial significance and other indicators of
audit risk, such as the complexity of operations and the degree of
estimation and judgement in the financial results.
All of the Group’s five significant components were subjected to full
scope audits for Group purposes. For insignificant components, we
carried out specified audit procedures. All components are located
in the UK and were audited by the Group audit team.
Climatechange
Our work on the assessment of potential impacts on climate-related
risks on the Group’s operations and financial statements included:
+Enquiries and challenge of management to understand the
actions they have taken to identify climate-related risks and their
potential impacts on the financial statements and adequately
disclose climate-related risks within the annual report;
+Our own qualitative risk assessment taking into consideration
the sector in which the Group operates and how climate change
affects this particular sector; and
+Review of the minutes of Board and Audit Committee meeting
and other papers related to climate change and performed a risk
assessment as to how the impact of the Group’s commitment as
set out on page 31 may affect the financial statements and our
audit.
We challenged the extent to which climate-related considerations,
including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in
management’s going concern assessment and viability assessment.
We also assessed the consistency of managements disclosures
included as strategic information on page 57 with the financial
statements and with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there
to be any Key Audit Matters materially impacted by climate-related
risks and related commitments.
Governance
gallifordtry.co.uk
123
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Independent auditor’s report continued
Keyauditmatters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
These standards have been assessed to have no significant impact
on the Group as they are either not relevant to the Group’s activities
or require accounting which is consistent with the Group’s previous
accounting policies.
The following are new standards, interpretations and amendments,
that are not yet effective or have not been endorsed. The Group has
chosen not to adopt these early. These may however have an effect
on the Group’s future financial statements:
+Amendments to IAS 1, Presentation of financial statements on
Non-current liabilities with covenants
+Narrow scope amendments to IAS 1, Practice statement 2 and
IAS 8
+IFRS 17 Insurance Contracts as amended in December 2021
+Amendment to IAS 12 Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
+Amendment to IAS 12 International tax reform – pillar two
model rules
+Amendment to IAS 7 and IFRS 7 – Supplier finance
+Amendment to IFRS 16 Leases: Leases on sale and leaseback
+IFRS S1 General requirements for disclosure of sustainability-
related financial information
+IFRS S2 Climate-related disclosures
The Group has yet to assess the full outcome of these new
standards, amendments, and annual improvements. It is not
expected that these will significantly impact the financial statements
of the Group.
Basis of consolidation
The Group financial statements incorporate the results of Galliford
Try Holdings plc, its subsidiary undertakings and the Group’s share
of the results of joint arrangements. Subsidiaries are all entities
over which the Group has control. The exposure or right to variable
returns from its involvement with an investee, and the ability to
influence those returns, are considered when assessing whether the
Group controls another entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group, until the
date that control ceases.
The acquisition method of accounting is used to account for the
acquisition of a business by the Group. The cost of an acquisition
is measured at the fair value of the assets transferred, equity
instruments issued and liabilities incurred or assumed at the date
of exchange. Costs directly attributable to the acquisition are
expensed to the income statement. The identifiable assets acquired
and liabilities and contingent liabilities assumed in the business
combination are measured initially at their fair values at the
acquisition date, irrespective of any non-controlling interest. The
excess of cost of acquisition over the fair value of the Group’s share
of the identifiable net assets acquired is recorded as goodwill. If
the fair value of the Group’s share of the identifiable net assets is in
excess of the cost of the acquisition, the gain on bargain purchase is
recognised as a credit through the income statement.
Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are also eliminated but considered an impairment indicator of
the asset transferred. Accounting policies of acquired subsidiaries
are changed where necessary, to ensure consistency with policies
adopted by the Group.
Governance
gallifordtry.co.uk
135
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
1 Accounting policies continued
In addition to total performance measures, the Group discloses
additional information including performance before exceptional
items and earnings per share before exceptional items. The Group
believes that this additional information provides useful information
on underlying trends. This additional information is not defined
under international accounting standards and may therefore not be
comparable with similarly titled profit measures reported by other
companies. It is not intended to be a substitute for, or superior to,
international accounting standards measures of profit.
Impact of climate change on the financial statements
As reported in the TCFD disclosures starting on page 57, and the
principal risks starting on page 52, the directors have considered
the risks and potential impact of climate change to the Group.
It is unlikely that these risks will have a material financial impact
in the short and medium term, particularly given the nature of
the contractual arrangements in place, however the directors
continue to monitor this, particularly regarding any judgements on
construction contracts, impairment reviews and going concern.
Critical accounting estimates and judgements
The preparation of the consolidated financial statements requires
management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets,
liabilities, income and expenses. Critical judgements are those
management has made when applying its significant accounting
policies, whereas critical estimates are assumptions and estimates
made at the end of the reporting period that have a significant risk
of resulting in a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
The estimates, judgements and associated assumptions are based
on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis of making estimates and judgements about the carrying
value of assets and liabilities which are not readily apparent from
other sources. Actual results may differ from these estimates and
judgements. The estimates, judgements and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates
and judgements are recognised in the period in which the estimate
or judgement is revised if the revision affects only that period, or in
the period of revision and future periods if the revision affects both
current and future periods.
Material estimates, judgements and assumptions are made in
particular with regards to establishing the following policies:
(i) Revenue and profit recognition for long-term contract
accounting (judgement and estimate)
In order to determine the profit and loss that the Group is able
to recognise on its construction contracts in a specific period,
the Group has to estimate the outcome of both the total costs to
complete the contract as well as the final contract value. The Group
has to allocate total costs of the construction contracts between
the amount incurred on the contract to the end of the reporting
period and the proportion to complete in a future period. The
assessment of the total costs to be incurred and final contract value
requires a degree of estimation.
Contract modifications are recognised when the Group considers
they have been approved (which also includes consideration of
whether enforceable rights exist in the contract). The estimation
of final contract value includes the assessment of the recovery of
variations, claims and compensation events (contract modifications).
The estimate made is constrained in accordance with IFRS 15 so
that it is highly probable not to result in a significant reversal of
revenue in the future. Where the change in scope results in an
increase to the work to be performed that is distinct and reflects the
stand-alone selling price of the distinct good/service, it is treated as
a separate contract. This is assessed on a contract specific basis.
The Group recognises recoveries of claims from clients as revenue
where clear entitlement has been established, such as through
dispute-resolution processes. This includes the recovery of costs
(such as delays to the contract programme) to the extent it is highly
probable not to result in a significant reversal of revenue in the
future.
The estimation of costs to complete is based on all available relevant
information such as procured packages and management experience
and includes estimation of final accounts and any potential
maintenance and defect liabilities. Recoveries resulting from actual
or potential claims against subcontractors are accounted for in
accordance with IAS 37 and are recognised only when they meet
the virtually certain threshold.
Group management has established internal controls to review
and ensure the appropriateness of estimates made on an individual
contract basis, including any necessary contract provisions. As with
most large, complex construction projects, there is an element of
estimation uncertainty over costs to complete and final account
settlements. This is, however, reduced by the experience of the
management team and the controls that we have in place. The
settlement of these final accounts may give rise to an over or under-
recognition of profit or loss and associated cash flows, which could
be material.
As at 30 June 2023, the Group’s contract assets, contract liabilities
and contract provisions amounted to £204.9m, £106.6m and
£29.9m respectively as set out in Notes 17, 19 and 20. The Group
has considered the nature of the estimates involved in deriving
these balances and concluded that it is possible, on the basis of
existing knowledge, that outcomes within the next financial year
may be different from the Group’s assumptions applied as at 30
June 2023 and could require a material adjustment to the carrying
amounts of these assets and liabilities in the next financial year.
However, due to the level of uncertainty, combination of cost and
income variables and timing across the Group’s large portfolio of
contracts at different stages of their contract life, it is impracticable
to provide a quantitative analysis of the aggregated judgements that
are applied at a portfolio level.
136
1 Accounting policies continued
The Group’s five largest unagreed variations and claims positions at
the year-end are summarised in aggregate below.
£m
Overall contract value (including total estimated end of
contract variations and claims after IFRS 15 constraints)385.5
Revenue in the year58.6
Total estimated end of contract variations and claims
before IFRS 15 constraints71.9
Total estimated end of contract variations after IFRS 15
constraints46.5
These five positions represent the most significant estimates of
revenue. The aggregate unagreed variations and claims constrained
revenue recognised at year-end of the subsequent five largest
unagreed variations and claims is £16.1m.
These items include estimation uncertainty, with a range of
reasonably possible outcome of £nil to £71.9m.
In respect of contract assets of £204.9m (30 June 2022: £173.4m)
and in assessing receivable provisions calculated on an expected
loss basis, the Group has recorded a provision of £nil (2022:
£14.0m), refer to note 17.
It is unclear whether the outstanding uncertainties will be resolved
within the next 12 months.
(ii) Taxation (judgement and estimate)
Deferred tax liabilities are generally provided for in full and deferred
tax assets are recognised to the extent that it is probable that future
taxable profit will arise against which the temporary differences will
be utilised. Management judgement is required to determine the
amount of deferred tax assets that can be recognised, based on the
likely timing and level of future taxable profits (note 22).
(iii) Exceptional items (judgement)
Exceptional items are items of financial performance which the
Group believes should be presented separately on the face of
the income statement, to assist in understanding the underlying
financial performance achieved by the Group. Determining
whether an item is part of underlying items or non-underlying items
requires judgement. Details of exceptional items included in the
financial statements are included in note 4. The exceptional items
presented in the income statement meet the Group’s definition of
exceptional, being material and irregular costs incurred during the
year, that the Group believes assists the users of the accounts by
disclosing separately.
(iv) PPP and other investments measured at fair value
through other comprehensive income (estimate)
At 30 June 2023, £44.6m (2022: £47.5m) of PPP and other
investments were classified as financial assets measured at fair value
through other comprehensive income. In the operational phase, the
fair value of these financial assets is measured at each reporting
date by discounting the future value of the cash flows allocated to
the financial asset. Individual discount rates have been used which
equate to an overall blended discount rate of 7.3% (2022: 7.0%),
which reflects the rates typically experienced in the marketplace.
A 0.5% increase/reduction in the discount rate would result in a
corresponding decrease/increase in the value of the investments
recorded in the balance sheet of approximately £1.6m
(2022: £1.9m) (note 16).
(v) Business combinations (judgement and estimate)
The acquisition of the nmcn Water Business during the prior
year, represented a material business combination. This required
the application of both estimates and judgements to be made by
management in determining the allocation of the purchase price
against the identifiable assets and liabilities and any residual
goodwill. During the current year the Group has acquired MCS
Control Systems Limited and the business of Ham Baker and has
applied a consistent methodology.
Exceptional items
Exceptional items are material or significant irregular items
of income and expense which the Group believes should be
disclosed in the income statement, to assist in understanding
the underlying financial performance achieved by the Group, by
virtue of their nature or size. Examples of items which may give
rise to disclosure as exceptional items include gains and losses
on the disposal of businesses and property, plant and equipment,
significant unanticipated losses on contracts, cost of restructuring
and reorganisation of businesses, acquisition costs and asset
impairments.
Segmental reporting
Segmental reporting is presented in the consolidated financial
statements in respect of the Group’s business segments, which are
the primary basis of segmental reporting. The business segmental
reporting reflects the Group’s management and internal reporting
structure. Segmental results include items directly attributable to
the segment, as well as those that can be allocated on a reasonable
basis.
Revenue and profit
Revenue is recognised when the Group transfers control of goods
or services to customers. Revenue comprises the fair value of the
consideration received or receivable net of rebates, discounts and
value-added tax. Where consideration is subject to variability, the
Group estimates the amount receivable. Revenue recognised is
constrained to the amount which is highly probable not to result
in a significant reversal in future periods. The Group also assesses
whether the costs incurred on a project depict an appropriate
measure of progress, and constrain revenue accordingly.
Sales within the Group are eliminated. Revenue also includes the
Group’s proportion of work carried out under joint operations.
Where a modification to an existing contract occurs, the Group
assesses the nature of the modification and whether it represents a
separate performance obligation required to be satisfied or whether
it is a modification to the existing performance obligation.
Governance
gallifordtry.co.uk
137
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
1 Accounting policies continued
Revenue for the Group’s continuing operations is recognised as
follows:
Construction services
Revenue comprises the value of construction services transferred
to a customer during the period. The results for the period
include adjustments for the outcome of contracts, including
jointly controlled operations, executed in both the current and
preceding years.
Fixed price contracts – the amount of revenue recognised is
calculated based on total costs incurred as a proportion of total
estimated costs to complete and is recognised over time. The
estimated final value includes variations, compensation events and
certain claims (contract modifications) where it is highly probable
that there will not be a significant reversal. Provision will be made
against any expected loss as soon as it is identified.
Cost-reimbursable contracts – revenue is recognised based upon
costs incurred to date plus any agreed fee and is recognised over
time. Where contracts include a target price, consideration is
given to the impact on revenue of the mechanism for distributing
any savings or additional costs compared to the target price. Any
revenue over and above the target price is recognised once it is
highly probable that there will not be a significant reversal. Revenue
includes any variations and compensation events where it is highly
probable that there will not be a significant reversal.
Facilities management – management services and facilities
management contracts typically represent a single performance
obligation. Revenue is recognised over time as control passes to the
customer and is typically measured on a straight-line basis as this is
considered to be a reliable estimate of the pattern of transfer to the
customer.
Recoveries from claims against third parties
The recognition of expected reimbursements resulting from
certain third-party claims such as against the supply chain or
through insurance recoveries is accounted for in accordance with
IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
This requires recovery to be ‘virtually certain’ before an asset can
be recognised.
Government funding
Grants (including research and development expenditure credits)
are recognised when there is reasonable assurance that the Group
will comply with the conditions attaching to them and the grants
will be received. The grants are recognised in the income statement
over the periods necessary to match them with the related costs
which they are intended to compensate, on a systematic basis.
Contract costs
Incremental costs to obtain a contract are capitalised to the extent
the contract is expected to be sufficiently profitable for them to
be recovered. All other costs to obtain a contract are expensed
as incurred. Incremental costs to fulfil a contract are expensed
unless they relate directly to an existing contract or specific
anticipated contract, generate or enhance resources that will be
used to satisfy the obligations under the contract and are expected
to be recovered. These costs are amortised over the shorter of
the duration of the contract or the period for which revenue and
profit can be forecast with reasonable certainty. Where a contract
becomes loss making, capitalised costs in relation to that contract
are expensed immediately.
Interest income and expense
Interest income and expense is recognised on a time proportion
basis, using the effective interest method.
Income tax
Current income tax is based on the taxable profit for the year.
Taxable profit differs from profit before taxation recorded in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years or that are never
taxable or deductible. The liability for current tax is calculated using
rates that have been enacted, or substantively enacted, by the
balance sheet date.
Deferred income tax is provided using the balance sheet liability
method, providing for all temporary differences between the
carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes, with
the exception of the initial recognition of goodwill arising on an
acquisition. Deferred tax is measured at the tax rates that are
expected to apply in the periods in which the timing differences
are expected to reverse, based on rates and laws that have been
enacted or substantively enacted by the balance sheet date. A
deferred tax asset is only recognised when it is more likely than
not that the asset will be recoverable in the foreseeable future out
of suitable taxable profits from which the underlying temporary
differences can be deducted.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred income tax assets and
liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when there is an
intention to settle the balances on a net basis.
Deferred income tax is charged or credited through the income
statement, except when it relates to items charged or credited
through the statement of comprehensive income or to equity, when
it is charged or credited there.
Goodwill
Goodwill arising on consolidation represents the excess of the fair
value of the consideration given over the fair value of the net assets
acquired. It is recognised as an asset and reviewed for impairment
at least annually or when there is a triggering event, by considering
the net present value of future cash flows. For purposes of testing
for impairment, the carrying value of goodwill is compared to its
recoverable amount, which is the higher of the value in use and the
fair value less costs to sell. Any impairment is charged immediately
to the income statement.
Goodwill arising on acquisitions before the date of transition to
IFRS has been retained at the previous UK GAAP amounts following
impairment tests. Goodwill written off to reserves under UK GAAP
prior to 1998 has not been restated.
Goodwill is allocated to Cash Generating Units (CGUs) for the
purpose of impairment testing. The allocation is made to those
CGUs or groups of CGUs that are expected to benefit from the
business combination in which the goodwill arose.
138
1 Accounting policies continued
Intangible assets
Intangible assets can include brands, customer contracts and
customer relationships acquired on acquisition of subsidiary
companies, and computer software developed by the Group. The
intangible assets are reviewed for impairment at least annually or
when there is a triggering event. Intangible assets are stated at cost
less accumulated amortisation and impairment. Cost is determined
at the time of acquisition as being directly attributable costs or,
where relevant, by using an appropriate valuation methodology.
Intangible assets are amortised over the following periods:
(a) Customer contracts and relationships – on a straight-line basis
over up to 10 years.
(b) Computer software – once the software is fully operational,
amortisation is on a straight-line basis over up to 10 years.
Property, plant and equipment
All property, plant and equipment is stated at cost less accumulated
depreciation and impairment. Cost includes expenditure that
is directly attributable to the acquisition of the items. Land and
buildings comprise mainly offices.
Depreciation is calculated to write off the cost of each asset to its
estimated residual value over its expected useful life. Freehold land
is not depreciated. The annual rates of depreciation on cost, applied
on a straight-line basis, are as follows:
+Freehold buildings 2%
+Plant and machinery 15% to 33%
+Fixtures and fittings 10% to 33%
In addition to systematic depreciation, the book value of property,
plant and equipment is written down to estimated recoverable
amounts should any impairment in the respective carrying values be
identified. The asset residual values, carrying values and useful lives
are reviewed on an annual basis and adjusted if appropriate at each
balance sheet date.
Repairs and maintenance expenditure is expensed as incurred, on an
accruals basis.
Joint arrangements
The Group applies IFRS 11 to all joint arrangements. Investments
in joint arrangements are classified as either joint ventures or joint
operations, depending on the contractual rights and obligations of
each investor.
A joint venture is an entity over which the Group has joint control
and rights to the net assets of the entity. The Group’s interest in
joint ventures is accounted for using the equity method. Under
this method the Group’s share of profits less losses after taxation
of joint ventures is included in the consolidated income statement
and its interest in their net assets is included in investments in the
consolidated balance sheet. Where the share of losses exceeds
the Group’s interest in the entity and there is no obligation to fund
these losses, the carrying amount is reduced to nil and recognition
of further losses is discontinued. Future profits are not recognised
until unrecognised losses are extinguished. Unrealised gains on
transactions with the Group’s joint ventures are eliminated to the
extent of the Group’s interest in the joint venture. Accounting
policies of joint ventures have been changed on consolidation
where necessary, to ensure consistency with policies adopted by
the Group. Where joint ventures do not adopt accounting periods
that are coterminous with the Group’s, results and net assets are
based on unaudited accounts drawn up to the Group’s accounting
reference date.
A joint operation is a joint arrangement that the Group undertakes
with third parties, whereby those parties have rights to the assets
and obligations of the arrangement. The Group accounts for joint
operations by recognising its share of profits and losses in the
consolidated income statement. The Group recognises its share of
associated assets and liabilities in the consolidated balance sheet.
PPP and other investments
PPP and other investments are non-derivatives that are either
designated in this category or not classified in any of the other
categories. They are included in non-current assets unless
management intends to dispose of the assets within 12 months
of the balance sheet date. On initial recognition, the asset is
recognised at cost.
The Group applies equity accounting for its investments in PPP/
PFI entities. These investments are treated as associates as the
Group has significant influence over them. On initial recognition,
the investments in these entities are recognised at cost, and the
carrying amounts are increased or decreased to recognise the
Group’s share of the profit or loss of the PPP/PFI entities after the
date of acquisition. The Group’s share of the investments’ profits
or losses is recognised in the profit or loss net of any impairment
losses. Distributions received reduce the carrying amount of
the investments.
The debt element of the Group’s PPP/PFI entities is accounted for
under IFRS 9 ‘Financial Instruments’ with fair value movements
recorded in other comprehensive income and with recycling of gains
and losses through the income statement. Tax is recognised on the
movements in other comprehensive income, where we expect the
recycling to attract a tax charge/credit to the income statement.
This reflects the fact that the Group has a demonstrable track
record of investing in PFI assets as part of an overall construction
procurement strategy, with a view to churning these investments on
a regular basis. Management has reviewed the classification of PPP
investments and considers that the business model continues to be
hold to collect and sell. The investments therefore continue to be
held at fair value through other comprehensive income.
Leases
In accordance with IFRS 16, leases are recognised as a right-of-use
asset and a corresponding liability at the date at which the leased
asset is available for use by the Group. Each lease payment is
allocated between the liability and finance cost. The finance cost is
charged to profit or loss over the lease term at a constant periodic
rate of interest on the remaining balance of the liability. The right-of-
use asset is depreciated over the lease term on a straight-line basis,
unless the useful life of the asset is shorter than the lease term.
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost, using the effective
interest method, less provision for impairment. A provision for
impairment of trade receivables is established based on an expected
credit loss model (general or simplified approach, as detailed under
impairment of financial assets). The amount of the loss is recognised
in the income statement through administrative expenses unless
presented separately.
When a trade receivable is uncollectible, it is written off against the
impairment provision for trade receivables. Subsequent recoveries
of amounts previously written off are credited against costs in
the income statement. Short-term trade receivables do not carry
any interest and are stated at their amortised cost, as reduced by
appropriate allowances for estimated irrecoverable amounts.
Governance
gallifordtry.co.uk
139
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
1 Accounting policies continued
Impairment of financial assets
IFRS 9 establishes a model for recognition and measurement of
impairment in financial assets. Loans and receivables and contract
assets apply the ‘Expected Credit Losses’ (ECL) model. All other
assets are classified and measured at fair value, with movements
going through the income statement or other comprehensive
income. Expected credit losses are recognised and measured
according to one of three approaches – a general approach (12
months ECL), a simplified approach (lifetime ECL) or the ‘credit
adjusted approach’. The Group has taken the practical expedient
to apply a simplified ‘provision matrix’ for calculating expected
losses. The provision matrix is based on an entity’s historical default
rates over the expected life of the trade receivables and is adjusted
for forward-looking estimates. For large one-off balances where
there is no historic experience, analysis is completed in respect of a
number of reasonably possible scenarios.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at
nominal value. For the purposes of the cash flow statement, cash
and cash equivalents comprise cash at bank and in hand, including
bank deposits with original maturities of three months or less. Bank
overdrafts are included for purposes of cash flow movements and
the cash flow statement.
Bank deposits with an original term of more than three months are
classified as short-term deposits where the cash can be withdrawn
on demand and the penalty for early withdrawal is not significant.
Cash held in escrow accounts is classified as a short-term deposit
where the escrow agreement allows the balance to be converted to
cash, if replaced by a bond repayable on demand.
Trade payables
Trade payables on normal terms are not interest bearing and are
stated at their nominal value. Trade payables on extended terms are
recorded at their fair value at the date of acquisition of the asset
to which they relate and subsequently held at amortised cost. The
discount to nominal value is amortised over the period of the credit
term and charged to finance costs using the effective interest rate.
Provisions for liabilities and charges
Provisions for liabilities and charges are recognised when, as a
result of past events, the Group has a present legal or constructive
obligation, it is probable that an outflow of resources will be
required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation, using the pre-tax
rate that reflects current market assessments of the time value
of money and the risks specific to the obligation. The increase
in the provision due to the passage of time is recognised as an
interest expense.
Foreign currency
Transactions in foreign currencies are recorded at the rate ruling
at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of
exchange ruling at the balance sheet date. All differences are taken
to the income statement.
Retirement benefit obligations
For defined contribution schemes operated by the Group, amounts
payable are charged to the income statement as they accrue.
Accounting for Employee Share Ownership Plan
Own shares held by the Galliford Try Employee Share Trust
(the ‘Trust’) are included in the Group financial statements as a
deduction from retained earnings. The charge made to the income
statement for employee share awards and options is based on
the fair value of the award at the date of grant, spread over the
performance period. Where such shares subsequently vest to the
employees under the terms of the Group’s share option schemes or
are sold, any consideration received is included in equity.
Share-based payments
The Group operates a number of equity-settled, share-based
compensation plans. The fair value of the employee services
received in exchange for the grant of the options is recognised as an
expense over the vesting period. The total amount to be expensed
over the vesting period is determined by reference to the fair value
of the options granted, excluding the impact of any non-market
vesting conditions such as growth in earnings per share. Non-
market vesting conditions are included in assumptions about the
number of options that are expected to vest.
At each balance sheet date, the Group revises its estimates of the
number of options that are expected to vest. It recognises the
impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value)
and share premium when the options are exercised. The grant
by the Company of options over its equity instruments to the
employees of subsidiary undertakings in the Group is treated as a
capital contribution.
Dividend
Final dividend distribution to the Company’s shareholders is
recognised as a liability in the Group’s financial statements in the
period in which the dividends are approved by the Company’s
shareholders. Interim dividends are recognised when paid.
Equity instruments
Equity instruments, such as ordinary share capital, issued by the
Company are recorded at the proceeds received net of directly
attributable incremental issue costs. Consideration paid for shares in
the Company held by the Trust are deducted from total equity.
Investments in subsidiaries
The Company’s investments in subsidiaries are recorded in the
Company’s balance sheet at cost less any impairment. The directors
review the investments for impairment annually.
140
2 Segmental reporting
Segmental reporting is presented in the consolidated financial statements in respect of the Group’s business segments, which are the
primary basis of segmental reporting. The business segmental reporting reflects the Group’s management and internal reporting structure.
Segmental results include items directly attributable to the segment, as well as those that can be allocated on a reasonable basis. As the
Group has no activities outside the UK, segment reporting is not required by geographical region.
The Chief Operating Decision-Makers (CODM) have been identified as the Group’s Chief Executive and Finance Director. The CODM
review the Group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating
segments of the Group to be Building, Infrastructure, PPP Investments and Central (primarily representing central overheads).
The CODM assess the performance of the operating segments based on a measure of adjusted earnings before finance costs, amortisation,
exceptional items and taxation. This measurement basis excludes the effects of non-recurring expenditure from the operating segments,
such as restructuring costs and impairments when the impairment is the result of an isolated, non-recurring event. In the financial year
ending 30 June 2023, the Group has also presented pre-exceptional performance excluding a one off contract settlement as announced
on 8 June 2023 (disclosed in the consolidated income statement as an impairment of financial assets of £2.8m). Interest income and
expenditure are included in the result for each operating segment that is reviewed by the CODM. Other information provided to them is
measured in a manner consistent with that in the financial statements.
Income statement
Year-ended 30 June 2023
Building
£m
Infrastructure
£m
PPP Investments
£m
Central
£m
Total
£m
Revenue797.1590.85.8–1,393.7
Pre-exceptional operating profit/(loss) before amortisation
and impairment of financial assets18.514.51.4(12.5)21.9
Finance income–0.33.92.16.3
Finance costs(0.7)(0.7)(0.1)(0.3)(1.8)
Pre-exceptional profit/(loss) before amortisation and
taxation and amortisation of financial assets17.814.15.2(10.7)26.4
Amortisation of intangible assets(1.0)(0.9)–(1.1)(3.0)
Pre-exceptional profit/(loss) before taxation and impairment
of financial assets16.813.25.2(11.8)23.4
Impairment of financial assets–(2.8)––(2.8)
Exceptional items–––(10.5)(10.5)
Profit before tax16.810.45.2(22.3)10.1
Income tax charge(1.0)
Profit for the year9.1
Year-ended 30 June 2022
Building
£m
Infrastructure
£m
PPP Investments
£m
Central
£m
Total
£m
Revenue789.1441.96.2–1,237.2
Pre-exceptional operating profit/(loss) before amortisation18.910.8(0.9)(10.3)18.5
Share of post-tax profits from joint ventures––0.4–0.4
Finance income––3.90.44.3
Finance costs(0.3)(0.7)–(0.4)(1.4)
Pre-exceptional profit/(loss) before amortisation and
taxation18.610.13.4(10.3)21.8
Amortisation of intangible assets(1.0)(0.7)–(1.0)(2.7)
Pre-exceptional profit/(loss) before taxation17.69.43.4(11.3)19.1
Exceptional items–(7.7)–(6.0)(13.7)
Profit before tax17.61.73.4(17.3)5.4
Income tax credit0.9
Profit for the year6.3
Inter-segment revenue is eliminated from revenue above. In the year to 30 June 2023, this amounted to £61.0m (2022: £38.8m) for
continuing operations, of which £nil (2022: £nil) was in Building, £40.1m (2022: £21.7m) was in Infrastructure and £20.9m (2022: £17.1m)
was in central costs.
Governance
gallifordtry.co.uk
141
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
2 Segmental reporting continued
Balance sheet
30 June 2023Notes
Building
£m
Infrastructure
£m
PPP Investments
£m
Central
£m
Total
£m
Goodwill and intangible assets 41.057.1–0.298.3
Working capital employed(60.9)(178.2)43.3(4.1)(199.9)
Net cash18139.042.7(8.6)47.1220.2
Net assets119.1(78.4)34.743.2118.6
Total Group liabilities(594.1)
Total Group assets 712.7
30 June 2022Notes
Building
£m
Infrastructure
£m
PPP Investments
£m
Central
£m
Total
£m
Goodwill and intangible assets 42.053.3–1.797.0
Working capital employed(92.8)(139.5)41.96.6(183.8)
Net cash18154.9(1.4)(9.6)75.0218.9
Net assets104.1(87.6)32.383.3132.1
Total Group liabilities(523.3)
Total Group assets655.4
Other segmental information
Year ended 30 June 2023Notes
Building
£m
Infrastructure
£m
PPP Investments
£m
Central
£m
Total
£m
Contracting revenue797.1590.8––1,387.9
Capital expenditure – property, plant and
equipment130.81.20.10.12.2
Total depreciation 13 & 146.46.10.20.913.6
Share-based payments250.90.50.41.63.4
Acquisition of intangible assets
1
30–0.3––0.3
Amortisation of intangible assets111.00.9–1.13.0
1 Acquired as part of a business combination. See note 30.
Year ended 30 June 2022Notes
Building
£m
Infrastructure
£m
PPP Investments
£m
Central
£m
Total
£m
Investment in joint ventures ––0.3–0.3
Contracting revenue789.1441.9––1,231.0
Capital expenditure – property, plant and
equipment130.93.8–0.45.1
Total depreciation 13 & 144.55.80.11.411.8
Share-based payments170.60.10.31.32.3
Acquisition of intangible assets
1
25–5.8––5.8
Amortisation of intangible assets111.00.7–1.02.7
1 Acquired as part of a business combination. See note 30.
142
3 Revenue
Nature of revenue streams
(i) Building and Infrastructure segments
Our Construction business operates nationwide, working with clients predominantly in the public and regulated sectors, such as health,
education and defence markets within the Building segment and road and water markets within the Infrastructure segment (as well as
private commercial clients). Projects include the construction of assets (with services including design and build, construction only and
refurbishment) in addition to the maintenance, renewal, upgrading and managing of services across utility and infrastructure assets.
Revenue streamNature, timing of satisfaction of performance obligations and significant payment terms
Fixed priceA number of projects within these segments are undertaken using fixed-price contracts.
Contracts are typically accounted for as a single performance obligation; even when a contract (or multiple
combined contracts) includes both design and build elements, they are considered to form a single performance
obligation as the two elements are not distinct in the context of the contract, given that each is highly
interdependent on the other.
The Group typically receives payments from the customer based on a contractual schedule of value that reflects
the timing and performance of service delivery. Revenue is therefore recognised over time (the period of
construction) based on an input model (reference to costs incurred to date). Un-invoiced amounts are presented as
contract assets.
No significant financing component typically exists in these contracts.
Cost-reimbursableA number of projects are undertaken using cost reimbursable/target price (possibly with a pain/gain share
mechanism) contracts.
These projects are often delivered under frameworks, however, individual performance obligations under the
framework are normally determined at a project level where multiple services are supplied. The Group constrains
revenue and calculates any pain/gain mechanism at the framework level where appropriate.
The Group typically receives payments from the customer based on actual costs incurred. Revenue is therefore
recognised over time (the period of construction) based on an input model (reference to costs incurred to date).
Un-invoiced amounts are presented as contract assets.
No significant financing component typically exists in these contracts.
Facilities management*Contracts undertaken within the Building segment that provide full life-cycle solutions to clients, are accounted for
as a single performance obligation, with revenue recognised over time and typically on a straight-line basis.
* Facilities management represents around 5% of the total Building segment turnover.
(ii) Investments segment
Our Investments business specialises in managing construction through to operations for major building projects through public private
partnerships and co-development opportunities. The business leads bid consortia and arranges finance, as well as making debt and equity
investments (which are recycled).
Revenue streamNature, timing of satisfaction of performance obligations and significant payment terms
PPP InvestmentsThe Group has investments in a number of PPP Special Purpose Vehicles (SPVs), delivering major building and
infrastructure projects.
The business additionally provides management services to the SPVs under Management Service Agreements
(MSA). Revenue for these services is typically recognised over time as and when the service is delivered to the
customer.
Governance
gallifordtry.co.uk
143
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
3 Revenue continued
Disaggregation of revenue
The Group considers the split of revenue by operating segment to be the most appropriate disaggregation. All revenue has been derived
from performance obligations settled over time.
Revenue on existing contracts, where performance obligations are unsatisfied or partially unsatisfied at the balance sheet date, is expected
to be recognised as follows:
Revenue – year ended 30 June 2023
2024
£m
2025
£m
2026
onwards
£m
Total
£m
Building614.4214.432.7861.5
Infrastructure453.1185.049.4687.5
Total Construction1,067.5399.482.11,549.0
PPP Investments3.22.626.532.3
Total transaction price allocated to performance obligations yet to be satisfied1,070.7402.0108.61,581.3
Revenue – year ended 30 June 2022
2023
£m
2024
£m
2025
onwards
£m
Total
£m
Building526.4111.633.2671.2
Infrastructure295.2134.5142.4572.1
Total Construction821.6246.1175.61,243.3
PPP Investments2.82.725.731.2
Total transaction price allocated to performance obligations yet to be satisfied824.4248.8201.31,274.5
Any element of variable consideration is estimated at a value that is highly probable not to result in a significant reversal in the cumulative
revenue recognised.
4 Exceptional items
2023
£m
2022
£m
Acquisition and integration related costs
1
– cost of sales–5.8
Acquisition and integration related costs
1
– administrative expenses–1.9
Implementation costs of cloud based arrangements
2
– administrative expenses10.56.0
Total10.513.7
1 The Group acquired the Water business of nmcn plc (in administration) on 7 October 2021 and incurred acquisition and integration related costs of £7.7m. This is
predominantly made up of legal and professional fees, integration and restructuring costs recognised in administrative expenses, and specific staff costs incurred
during the period of site closures following nmcn plc entering administration that are recognised in cost of sales. Although similar costs have been incurred as a result of
the acquisitions in the year, these have not been classified as exceptional as they are not considered to be material or significant in quantum.
2 The Group incurred £10.5m (2022: £6.0m) of customisation and configuration costs associated with the move to Oracle Fusion, a cloud-based computing arrangement,
during the period. Taking into account the IFRIC Agenda Decision issued by the IFRS IC in March 2021, the Group has analysed the costs and concluded that these
costs should be expensed in the period. In accordance with the Group’s existing accounting policy, management considers that the costs should be separately disclosed
as exceptional because they are significant and irregular. The Group expects the project and associated costs to be completed in the first half of the next financial year.
An associated tax credit of £2.1m (2022: £2.6m) has been recognised.
144
5 Employees and directors
Employee benefit expense during the year
GroupCompany
Notes
2023
£m
2022
£m
2023
£m
2022
£m
Wages and salaries206.6171.5––
Social security costs24.821.3––
Other pension costs21.917.7––
Share-based payments 253.42.3––
Restructure costs–0.2––
Total256.7213.0––
All employees are entitled to join the Galliford Try Pension Scheme, a defined contribution scheme established as a stakeholder plan, with a
Company contribution based on a scale dependent on the employee’s age and the amount they choose to contribute. Since 1 July 2013, all
non-participating and newly-employed staff have been auto-enrolled into the separate stakeholder plan and are entitled to increase their
contribution rates in line with existing members. Since 1 April 2009, the Group has operated a pension salary sacrifice scheme, which means
that all employee pension contributions are paid as employer contributions on their behalf.
All pension costs in the current and prior years were in respect of the Group’s defined contribution schemes. Of the total charge, £10.4m
(2022: £8.3m) and £11.5m (2022: £9.4m) were included, respectively, within cost of sales and administrative expenses.
Average monthly number of people (including Executive and non-executive directors) employed
GroupCompany
2023
Number
2022
Number
2023
Number
2022
Number
By business:
– Building1,2711,265––
– Infrastructure2,2351,751––
Construction 3,5063,016––
PPP Investments6073––
Central 18116576
Total 3,7473,25476
Remuneration of key management personnel
The key management personnel comprise the Executive Board and non-executive directors. The remuneration of the key management
personnel of the Group is set out below in aggregate for each of the categories specified in IAS 24, Related Party Disclosures. Further
information about the remuneration of individual directors, including any interests in the Company’s shares, is provided in the audited part
of the Directors’ remuneration report.
2023
£m
2022
£m
Salaries and short-term employee benefits3.83.4
Retirement benefit costs0.30.3
Share-based payments2.92.0
Total7.05.7
Governance
gallifordtry.co.uk
145
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
6 Net finance income
Group
2023
£m
2022
£m
Interest receivable on bank deposits2.40.4
Interest receivable from PPP Investments and joint ventures3.93.9
Finance income6.34.3
Other (including interest on lease liabilities)(1.8)(1.4)
Finance costs(1.8)(1.4)
Net finance income4.52.9
7 Profit before income tax
The following items have been included in arriving at profit before income tax:
Notes
2023
£m
2022
£m
Employee benefit expense 5256.7213.0
Total depreciation13 & 1413.611.8
Amortisation and impairment of intangible assets 113.52.7
Repairs and maintenance expenditure on property, plant and equipment1.00.7
Impairment of financial assets172.8–
Exceptional items410.513.7
In addition to the above, the Group incurs other costs classified as cost of sales relating to labour, materials and subcontractors’ costs.
Services provided by the Group’s auditor and network firms
During the year, the Group obtained the following services from the Group’s auditor at costs as detailed below:
2023
£m
2022
£m
Fees payable to the Company’s auditor for the audit of Parent Company and consolidated financial statements0.20.2
Fees payable to the Company’s auditor for other services:
The audit of financial statements of the Company’s subsidiaries2.10.8
Audit-related assurance services0.10.1
Total other services2.20.9
Total2.41.1
The audit fee for 2023 includes an amount in respect of additional costs related to the 2022 audit. A description of the work of the Audit
Committee in respect of the auditor’s independence is set out in the Governance report.
146
8 Income tax charge/(credit)
GroupNotes
2023
£m
2022
£m
Analysis of expense in year
Current year’s income tax
Current tax–(1.6)
Deferred tax
1
220.90.5
Adjustments in respect of prior years
Current tax–0.8
Deferred tax220.1(0.6)
Income tax expense/(credit)1.0(0.9)
Tax on items recognised in other comprehensive income
Tax recognised in other comprehensive income––
Total tax expense/(credit)1.0(0.9)
1 Includes impact of change in rate of tax.
The total income tax charge for the year of £1.0m (2022: credit of £0.9m) is lower (2022: lower) than the blended standard rate of
corporation tax in the UK of 20.5% (2022: 19.0%). The differences are explained below:
2023
£m
2022
£m
Profit before income tax10.15.4
Profit before income tax multiplied by the blended standard corporation tax rate in the UK of 20.5%
(2022: 19.0%)2.11.0
Effects of:
Expenses not deductible for tax purposes0.10.4
Non-taxable income(1.0)(0.1)
Adjustments in respect of prior years0.10.2
Change in tax rates0.1(0.4)
Net (recognition and utilisation)/restriction of tax losses
1
–(2.1)
Other(0.4)0.1
Income tax expense/(credit)1.0(0.9)
1 The net recognition and utilisation of tax losses of £nil (2022: £2.1m) reflects the utilisation of £nil (2022: £nil) tax losses in the year and the recognition of £nil (2022:
£2.1m) tax losses in line with the Group’s accounting policy (note 22).
In the Spring Budget 2021, the UK Government announced that from 1 April 2023, the corporation tax rate would increase from 19% to
25%. This new law was substantively enacted in the Finance Bill 2021 and received Royal Assent on 10 June 2021. Where appropriate,
deferred taxes at the balance sheet date have been measured using the appropriate tax rates (based on when the underlying balance is
expected to crystallise) and reflected in these financial statements.
Governance
gallifordtry.co.uk
147
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
9 Dividends
20232022
Group and Company£m
pence per
share£m
pence per
share
Previous year final6.45.83.93.5
Current year interim3.23.02.42.2
Dividend recognised in the year9.68.86.35.7
The following dividends were declared by the Company in respect of each accounting period presented:
20232022
£m
pence per
share£m
pence per
share
Interim3.23.02.42.2
Special12.6 12.0––
Final7.97.56.45.8
Dividend relating to the year23.722.58.88.0
The directors are proposing a final dividend in respect of the financial year ended 30 June 2023 of 7.5 pence per share (2022: 5.8 pence
per share), bringing the total dividend in respect of 2023 to 22.5 pence per share (2022: 8.0 pence per share). The final dividend will absorb
approximately £7.9m of equity. Subject to shareholders’ approval at the AGM to be held on 10 November 2023, the dividend will be paid on
8 December 2023 to shareholders who are on the register of members at the close of business on 10 November 2023.
On 8 June, the directors declared a special dividend of 12.0 pence per share following the settlement of its long-standing dispute
concerning three contracts with entities owned by a major infrastructure fund, returning a substantial portion of the proceeds to
shareholders. The Special Dividend will be paid on 27 October 2023 to shareholders on the register as at 6 October 2023. The ex-dividend
date is 5 October 2023.
10 Earnings per share
Basic and diluted earnings per share (EPS)
Basic EPS is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year, excluding those held by the Trust, which are treated as cancelled.
Under normal circumstances, the average number of shares is diluted by reference to the average number of potential ordinary shares
held under option in the year. The dilutive effect amounts to the number of ordinary shares which would be purchased using the aggregate
difference in value between the market value of shares and the share option price. Only shares that have met their cumulative performance
criteria are included in the dilution calculation. The Group has two classes of potentially dilutive ordinary shares: those share options
granted to employees where the exercise price is less than the average market price of the Company’s ordinary shares during the year and
the contingently issuable shares under the Group’s long-term incentive plans. A loss per share cannot be reduced through dilution, hence
this dilution is only applied where the Group has reported a profit.
The earnings and weighted average number of shares used in the calculations are set out below.
1 Material due to their holdings and/or issuing listed debt.
2 Revenue includes a deduction for the non-profit distribution model (NPD) surplus.
Details of related party transactions with joint ventures and associates are given in note 29. The Group’s shareholding in each joint venture
and associate can be seen in note 33.
Governance
gallifordtry.co.uk
155
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
17 Trade and other receivables
Group
Notes
2023
£m
2022
£m
Amounts falling due within one year:
Trade receivables52.046.0
Less: provision for impairment of receivables(0.1)(0.1)
Trade receivables – net51.945.9
Contract assets
1
21204.9173.4
Amounts due from joint ventures0.91.1
Research and development expenditure credits5.84.5
Other receivables7.64.7
Prepayments15.413.4
286.5243.0
1 Contract assets of £204.9 at 30 June 2023 (2022: £173.4m) are stated net of a life-time expected credit loss allowance of £nil (2022: £14.0m).
The Company has no trade and other receivables.
Retentions will be collected in the normal operating cycle of the Group and are therefore shown as a current asset. It is expected that
£33.2m (2022: £33.6m) will be collected within 12 months from the balance sheet date.
The Group has no significant capitalised contract costs.
The Group announced on 8 June 2023 that it had agreed settlement terms in respect of its long-standing dispute concerning three
contracts with entities owned by a major infrastructure fund. The settlement brought to a conclusion a complex and challenging multi-
contract dispute. Taking into account the requirements of IFRS 15, the Group had constrained the revenue recognised in prior periods to
the extent that it was highly probable not to result in a significant reversal in the future and had also previously assessed any expected
credit loss provision in accordance with IFRS 9. As a result of the settlement a further one-off expected credit loss of £2.8m has been
recognised in the current financial year.
There have been no movements in the Group’s provision for impairment of trade receivables.
Provisions for impaired receivables have been included in administrative expenses in the income statement. Amounts charged to the
impairment provision are generally written off when there is no expectation of recovering additional cash.
The other classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the book value of each class of receivable mentioned above, along with the
Group’s cash and cash equivalents. The Group does not hold any collateral as security.
Management believes that the concentration of credit risk with respect to trade receivables is limited, due to the Group’s customer base
being large, unrelated and predominantly within the public and regulated sectors.
As of 30 June 2023, trade receivables of £15.8m (2022: £13.7m) were past due but not impaired.
156
17 Trade and other receivables continued
These relate to a number of independent customers for whom there is no recent history of default and there are no indications that
they will not meet their payment obligations in respect of the trade receivables recognised in the balance sheet that are past due and
unprovided. The ageing analysis of these trade receivables is as follows:
2023
£m
2022
£m
Number of days past due date
Less than 30 days5.74.4
Between 30 and 60 days2.31.3
Between 60 and 90 days2.20.9
Between 90 and 120 days0.51.3
Greater than 120 days5.15.8
15.813.7
As of 30 June 2023, trade receivables were considered for impairment based on management’s judgement and review of the trade
receivables listings. The amount provided for these balances was £0.1m (2022: £0.1m). The allocation of the provision is as follows:
2023
£m
2022
£m
Number of days past due date:
Greater than 120 days0.10.1
0.10.1
18 Cash and cash equivalents
GroupCompany
2023
£m
2022
£m
2023
£m
2022
£m
Cash at bank and in hand and per the statement of cash flows220.2218.9114.2109.4
Cash at bank above includes £11.0m (2022: £22.7m), being the Group’s share of cash held by jointly controlled operations. The effective
interest rate received on cash balances is 2.6% (2022: 0.3%). The Group has no bank borrowings or loans.
Net cash excludes IFRS 16 lease liabilities (note 14).
Cash and cash equivalents and bank overdrafts are presented on a net (offset) basis. In 2016, the IFRS Interpretations Committee released
an update in respect of IAS 32 ‘Financial instruments: presentation’ specifically in relation to offsetting and cash pooling. This clarified that
in order to offset bank account balances, an entity must have both a legally enforceable right and an intention to do so. The Group’s bank
arrangements and facilities with both HSBC Bank plc and Barclays Bank plc provide the legally enforceable right to offset and the Group
demonstrated its intention to offset by formally sweeping the balances within each bank. Consequently, the balances have been offset in
the financial statements.
19 Trade and other payables
Group
Notes
2023
£m
2022
£m
Trade payables136.6102.3
Contract liabilities21106.6104.4
Other taxation and social security payable53.429.9
Other payables1.91.6
Accruals226.6232.9
525.1471.1
The Company has no trade and other payables.
All payables are unsecured. Retentions will be paid in the normal operating cycle of the Group and are therefore shown as a current liability.
The undiscounted future cash flows of non-derivative financial liabilities are £365.1m (2022: £336.8m) and these are expected to be settled
within one year of the balance sheet date.
Governance
gallifordtry.co.uk
157
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
20 Provisions for other liabilities and charges
Group
Onerous
contractsRectification
Total
£m
At 1 July 2021 (0.8)(24.2)(25.0)
Utilised 10.23.713.9
Additions
1
(14.0)(2.3)(16.3)
At 30 June 2022(4.6)(22.8)(27.4)
Utilised6.83.510.3
Additions
1
(4.2)(8.6)(12.8)
At 30 June 2023(2.0)(27.9)(29.9)
1 Additions include £0.1m (2022: £13.7m) acquired as part of business combinations (note 30).
Onerous contract provisions are made on loss-making contracts the Group is obliged to complete.
Rectification provisions are made for potential claims and defects for remedial works against work completed by the Group, and includes
provisions for dilapidations on premises the Group occupies.
As at 30 June 2023 £22.3m of provision related to three contracts. Management’s best estimate of the range of outcomes on these three
contracts is between £14.6m and £22.7m. The remaining £7.6m of the provision relates to a number of immaterial balances. Due to the
level of uncertainty, combination of cost and income variables and timing across the remaining portfolio of contracts, it is impracticable to
provide a quantitative analysis of the aggregated judgements that are applied at a portfolio level and therefore management has not given a
range of expected outcomes.
Due to the nature of the provisions, the timing of any potential future outflows is uncertain, however they are expected to be utilised within
the Group’s normal operating cycle, and accordingly are classified as current liabilities. Of the total provisions, £17.0m (2022: £18.8m) is
likely to be utilised by the end of 2031 with the remainder utilised within 12 months.
The Company does not hold any provisions.
21 Contract balances
Contract assets and liabilities are included within ‘trade and other receivables’ and ‘trade and other payables’ respectively on the face of
the balance sheet. Where there is a corresponding contract asset and liability in relation to the same contract, the balance shown is the
net position. The timing of work performed (and thus revenue recognised), billing profiles and cash collection results in trade receivables
(amounts billed to date and unpaid), contract assets (unbilled amounts where revenue has been recognised) and contract liabilities (customer
advances and deposits where no corresponding work has yet to be performed), being recognised on the Group’s balance sheet.
The reconciliation of the Group opening to closing contract balances is shown below:
20232022
Contract
asset
£m
Contract
liability
£m
Contract
asset
£m
Contract
liability
£m
At 1 July173.4(104.4)156.0(92.7)
Revenue recognised in the year1,334.958.81,183.254.0
Net cash received in advance of performance obligations being fully satisfied–(61.0)–(65.7)
Transfers in the year from contract assets to trade receivables(1,303.4)–(1,165.8)–
30 June204.9(106.6)173.4(104.4)
Revenue allocated to performance obligations that are unsatisfied at 30 June, is expected to be recognised as disclosed in note 3.
The Company has no contract balances.
The amount of revenue recognised in the year from performance obligations satisfied in previous periods amounts to £4.8m (2022: £3.0m).
158
22 Deferred income tax
Deferred income tax is calculated in full on temporary differences under the liability method and is measured at the average tax rates that
are expected to apply in the periods in which the timing differences are expected to reverse.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against
current income tax liabilities. The net deferred tax position at 30 June was:
Group
2023
£m
2022
£m
Deferred income tax assets 16.615.6
Deferred income tax liabilities (1.1)(1.6)
Net deferred income tax15.514.0
The movement for the year in the net deferred income tax account is as shown below:
Group
2023
£m
2022
£m
At 1 July14.014.3
Current year’s deferred income tax(0.9)(0.9)
Adjustment in respect of prior years(0.1)0.6
Transfer from current tax assets and change in rates of deferred income tax2.50.3
Acquisition of subsidiaries–(0.3)
At 30 June 15.514.0
All remaining unutilised tax losses have now been recognised and the Group has approximately £53m (2022: £53m) of unrecognised trading
losses that arose from a historical contract. The availability of the losses is subject to agreement with HMRC and therefore no deferred tax
asset has been recognised.
Movements in deferred income tax assets and liabilities during the year are shown below:
The Company has no deferred tax balances.
Deferred income tax assets
Group
Accelerated
tax
depreciation
£m
Share-based
payments
£m
Tax losses
£m
Other
1
£m
Total
£m
At 30 June 2021––9.65.415.0
(Expense)/credit taken to income statement(0.4)0.2–(0.4)(0.6)
Adjustment in respect of prior years
2
(0.2)–2.4(1.6)0.6
Transfer to deferred income tax liabilities0.6–––0.6
At 30 June 2022–0.212.03.415.6
Credit/(expense) taken to income statement–0.1(1.1)(0.3)(1.3)
Adjustment in respect of prior years––(0.2)–(0.2)
Transfer to deferred income tax
3
––2.5–2.5
At 30 June 2023–0.313.23.116.6
1 Deferred tax assets included in the ‘Other’ category relate to future income tax deductions available from IFRS transitions adjustments in respect of IFRS 15, IFRS 9
and IFRS 16 which will be utilised over the next 3–6 years in line with the requirements of tax legislation.
2 The adjustment in respect of prior years arose predominantly due to the recognition of previously restricted tax interest expense deductions due to the corporate
interest restriction provisions. This deferred tax asset will be utilised over the next three financial years in the form of reactivated tax interest expense deductions
against tax interest income from Group investment assets. This is offset by other adjustments that reflect changes to the estimates made in the previous years’ Annual
Report and Accounts and the finalised tax computations submitted to HMRC.
3 The transfer to deferred income tax represents a transfer of tax losses that were previously recorded as a current tax asset.
The Company has no deferred tax balances.
Governance
gallifordtry.co.uk
159
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
22 Deferred income tax continued
Deferred income tax liabilities
Group
Accelerated
tax
depreciation
£m
Intangible
assets
acquired
£m
Total
£m
At 30 June 2021–(0.7)(0.7)
Transfer from deferred income tax assets(0.6)–(0.6)
Acquisition of subsidiaries–(0.3)(0.3)
At 30 June 2022(0.6)(1.0)(1.6)
Credit taken to the income statement0.20.20.4
Adjustment in respect of prior years–0.10.1
At 30 June 2023(0.4)(0.7)(1.1)
23 Financial instruments
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk),
credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the Group’s financial performance. Financial assets and liabilities are offset and the net amount
reported when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
The Group and Company operate within financial risk policies and procedures approved by the Board. It is, and has been throughout the
year, the Group’s policy that no trading in financial instruments shall be undertaken. The Board provides written principles for overall risk
management, as well as written policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk, use of derivative
financial instruments and non-derivative financial instruments, and investment of excess liquidity. The Group’s financial instruments
principally comprise cash and cash equivalents, receivables, payables and PPP and other investments that arise directly from its operations
and its acquisitions. The Company’s financial instruments comprise of cash and cash equivalents.
Capital risk management
The Group is funded by ordinary shares, retained profits and its strong net cash position. The Group’s and Company’s objectives when
managing capital are to safeguard the Group’s ability to continue as a going concern, in order to provide returns for shareholders and
benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. The Group has no borrowing or
debt facilities and hence no gearing targets.
Financial risk factors
(a) Market risk
(i) Foreign exchange risk
All material activities of the Group take place within the UK and consequently there is little direct exchange risk, other than payments to
overseas suppliers who require settlement in their currency. If there is any material foreign exchange exposure, the Group’s policy is to
enter into forward foreign currency contracts. The Group and Company have no material currency exposure at 30 June 2023 (2022: nil).
(ii) Price risk
Other than a residual interest in equity securities, the Group and Company are not exposed to equity or commodity price risk.
(iii) Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest rates.
The Group’s interest rate risk arises from movement in cash and cash equivalents given that it is well capitalised with no debt or net
overdraft facilities.
(b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, deposits and borrowings with banks and financial
institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. The Group does not
hold any debt facilities. Further details of credit risk relating to trade and other receivables are disclosed in note 17. No credit limits were
exceeded during the reporting period, and management does not expect any material losses from non-performance of any counterparties,
including in respect of receivables not yet due. The Group’s maximum exposure to credit risk at the end of the reporting period is the
carrying amount (book value) of each class of financial asset set out on the following page.
160
23 Financial instruments continued
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities. The Group finances its operations through
its cash reserves and ongoing retained profits. Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of
expected cash flow. This is generally carried out at local level in the operating companies of the Group, in accordance with practices and
limits set by the Group. These limits vary by location to take into account the liquidity of the market in which the entity operates. On a daily
basis throughout the year, the bank balances or gross overdrafts in all the Group’s operating companies are aggregated into a total cash
figure, in order that the Group can obtain the most advantageous interest rate.
In accordance with IFRS 9 ‘Financial Instruments’, the Group has reviewed all contracts for embedded derivatives that are required to
be separately accounted for if they do not meet certain requirements set out in the standard. No such embedded derivatives have been
identified.
Fair value of other financial assets and financial liabilities
Where market values are not available, fair values of financial assets and financial liabilities have been calculated by discounting expected
future cash flows at the prevailing interest rate.
Primary financial instruments held or issued to finance the Group’s operations:
20232022
Notes
Book value
£m
Fair value
£m
Book value
£m
Fair value
£m
Financial liabilities:
Current financial liabilities measured at amortised cost19365.1365.1336.8336.8
Financial assets:
PPP and other investments1644.644.647.547.5
Current assets measured at amortised cost17271.1271.1229.6229.6
Cash and cash equivalents18220.2220.2218.9218.9
Prepayments are excluded from the financial assets measured at amortised cost; and statutory liabilities and contract liabilities are excluded
from financial liabilities measured at amortised cost. A maturity analysis of the Group’s non-derivative financial liabilities is given in note 19.
Borrowing facilities
The Group had no committed borrowing facilities available at 30 June 2023 or 2022.
Fair value estimation
Specific valuation techniques used to value financial instruments are defined as:
+Level 1 – Quoted market prices or dealer quotes in active markets for similar instruments.
+Level 2 – The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows, based on observable
yield curves.
+Level 3 – Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments. The fair value of other investments is set out in note 16.
The following table presents the Group’s assets and liabilities that are measured at fair value at 30 June:
20232022
Level 3
£m
Total
£m
Level 3
£m
Total
£m
Assets
Fair value through other comprehensive income
– PPP and other investments44.644.647.547.5
Total44.644.647.547.5
There were no transfers between levels during the year.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by
using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in
Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Governance
gallifordtry.co.uk
161
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
23 Financial instruments continued
Fair value measurements using significant unobservable inputs (Level 3)
2023
£m
2022
£m
At 1 July47.549.1
Movement in fair value(2.4)(0.9)
Disposals and subordinated loan repayments(0.5)(0.7)
Closing balance44.647.5
The key assumptions used in Level 3 valuations include the expected timing of receipts, credit risk and discount rates. The typical
repayment period is 10–15 years and the timing of receipts is based on historical data. The fair value of the portfolio reflects a blended
discount rate of 7.3% (2022: 7.0%) and is based on current market conditions. The sensitivity to discount rates is set out in note 16. If
receipts were to occur earlier than expected, the fair value would increase.
24 Ordinary shares and share premium
Group
Number of
shares
Ordinary
shares
£m
Share
premium
£m
Total
£m
At 30 June 2021111,053,48955.5 –55.5
Allotted under share option schemes739–––
At 30 June 2022111,054,22855.5–55.5
Allotted under share option schemes2,114–––
Cancellation of shares(6,187,148)(3.1)–(3.1)
At 30 June 2023104,869,19452.4–52.4
Company
Number of
shares
Ordinary
shares
£m
Share
premium
£m
Total
£m
At 30 June 2021111,053,48955.5–55.5
Allotted under share option schemes739–––
At 30 June 2022111,054,22855.5–55.5
Allotted under share option schemes2,114–––
Cancellation of shares(6,187,148)(3.1)–(3.1)
At 30 June 2023104,869,19452.4–52.4
Number of shares refers to 50p ordinary shares, which are authorised, issued and fully paid. There are no shares authorised and issued but
not fully paid.
During the year the Company purchased and cancelled 6,187,148 shares as part of the share buy back announced in September 2022 for
total consideration of £10.6m.
At 30 June 2023, the total number of shares outstanding under the sharesave scheme was 3,481,546 (2022: 2,776,374) and under the long
term incentive plan was 6,466,295 (2022: 6,986,213) as detailed in note 25.
162
25 Share-based payments
The Group operates performance-related share incentive plans for Executives, details of which are set out in the Directors’ Remuneration
report. The Group also operates sharesave schemes. The total charge for the year relating to employee share-based payment plans was
£3.4m (2022: £2.3m), all of which related to equity-settled share-based payment transactions. After deferred tax, the total charge was
£3.3m (2022: £2.1m).
Savings related share options
The Company operates an HMRC approved sharesave scheme, under which employees are granted an option to purchase ordinary shares
in the Company at up to 20% less than the market price at grant, in three years’ time, dependent on their entering into a contract to make
monthly contributions into a savings account over the relevant period. These funds are used to fund the option exercise. This scheme is
open to all employees meeting the minimum employment period. No performance criteria are applied to the exercise of sharesave options.
The options were valued using the binomial option-pricing model. The fair value per option granted and the assumptions used in the
The expected volatility is based on historical volatility in the movement in the share price over the past three years up to the date of grant
(or since incorporation of the Company in January 2020). The expected life is the average expected period to exercise. The risk free-rate is
the yield on zero-coupon UK Government bonds of a term consistent with the assumed option life. A reconciliation of savings related share
awards over the year to 30 June 2023 is shown below:
20232022
Number
Weighted
average
exercise priceNumber
Weighted
average
exercise price
Outstanding at 1 July 2,776,374123p1,989,993112p
Awards947,033137p999,819143p
Forfeited(109,335)124p(120,096)112p
Cancelled(127,458)124p(79,454)113p
Expired
1
(2,954)119p(13,149)113p
Exercised(2,114)112p(739)112p
Outstanding at 30 June 3,481,546127p2,776,374123p
Exercisable at 30 June––––
1 The number of options that expired in 2022 has been restated from 199,950 to 13,149, with the total outstanding balance at 30 June 2022 of 2,776,374 (previously
reported as 2,589,973).
The weighted average fair value of awards granted during the year was 67p (2022: 70p). There were 2,114 share options exercised during
the year ended 30 June 2023 (2022: 739) and the weighted average share price at the date of exercise was 164p (2022: 171p). The
weighted average remaining contractual life is 1 years and 9 months (2022: 2 years and 3 months). The charge to the income statement
relating to the sharesave scheme was £0.5m (2022: £0.3m).
Performance-related long-term incentive plans
The Company operates performance-related share incentive plans for Executives, details of which are set out in the Directors’
Remuneration report. The awards that vest are satisfied by the transfer of shares for no consideration. The outstanding options were
valued using a Black-Scholes model. The fair value per option granted and the assumptions used in the calculation are as follows:
Grant date
Shares
under option
Share price at
grant date
Vesting
period/option
life (months)
Risk
free rate
Dividend
yield
Fair
value per
option
23.09.203,247,87478p36(0.1)%3.1%71p
23.09.211,489,510177p360.4%2.5%164p
23.09.221,728,911161p364.0%5.0%139p
Governance
gallifordtry.co.uk
163
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
25 Share-based payments continued
The expected volatility is based on historical volatility in the movement in the share price of the Company and its comparator group and
the correlations between them over the past three years. The expected life is the average expected period to exercise. The risk free rate is
the yield on zero-coupon UK Government bonds of a term consistent with the assumed option life. A reconciliation of performance-related
share awards over the year to 30 June is shown below:
2023
Number
2022
Number
Outstanding at 1 July 6,986,2135,496,703
Granted1,728,9111,489,510
Exercised(2,248,829)–
Outstanding at 30 June 6,466,2956,986,213
Exercisable at 30 June––
The weighted average fair value of awards granted during the year was 139p (2022: 164p). There were 2,248,829 options exercised during
the year ended 30 June 2023 (2022: nil). The weighted average remaining contractual life is nil as the shares are exercised on the day that
they vest (2022: nil).
26 Other reserves and retained earnings
GroupNotes
Other
reserves
£m
Retained
earnings
£m
At 30 June 2021118.4(39.8)
Profit for the year–6.3
Dividends paid9–(6.3)
Share-based payments25–2.3
Movement in fair value of PPP and other investments16–(0.9)
Purchase of own shares–(3.4)
Reversal of impairment of investment in Galliford Try Limited and associated recycling of retained
earnings to merger reserve1513.8(13.8)
At 30 June 2022132.2(55.6)
Profit for the year–9.1
Dividends paid–(9.6)
Share-based payments–3.4
Movement in fair value of PPP and other investments–(2.4)
Purchase of own shares–(14.0)
Cancellation of shares3.1–
At 30 June 2023135.3(69.1)
The Company and Group’s other reserves relate to a merger reserve amounting to £132.2m (2022: £132.2m) and a capital redemption
reserve of £3.1m (2022: £nil).
The purchase of own shares represents shares purchased by the Galliford Try Employee Share Trust of £1.9m (2022: £3.4m) and other
share related transactions of £1.5m (2022: £nil), in addition to £10.6m (2022: £nil) purchased by the Company as part of the share buyback
announced in September 2022.
164
26 Other reserves and retained earnings continued
CompanyNotes
Other
reserves
£m
Retained
earnings
£m
At 30 June 2021118.4100.7
Profit for the year–28.8
Dividends paid9–(6.3)
Share-based payments–0.3
Reversal of impairment of investment in Galliford Try Limited and associated recycling of retained
earnings to merger reserve1513.8(13.8)
At 30 June 2022132.2109.7
Profit for the year–25.0
Dividends paid9–(9.6)
Share-based payments–0.5
Purchase of shares15–(10.6)
Cancellation of shares3.1–
At 30 June 2023135.3115.0
The cumulative amount of goodwill arising on acquisition and written off directly against reserves is £9.5m (2022: £9.5m).
At 30 June 2023, the Galliford Try Employee Share Trust (the Trust) held 3,705,343 (2022: 3,541,603) Galliford Try Holdings plc shares. The
nominal value of the shares held is £1.9m (2022: £1.8m). 1,200,000 shares were acquired during the year (2022: 1,820,000) at a net cost
of £1.9m (2022: £3.4m) and a further £1.5m (2022: £nil) was paid in relation to other share related transactions. 965,194 (2022: nil) shares
were transferred during the year. The cost of funding and administering the Trust is charged to the income statement in the period to which
it relates. The market value of the shares at 30 June 2023 was £7.2m (2022: £6.0m). No shareholders (2022: none) have waived their rights
to dividends.
As part of and as a result of the disposal of the housebuilding operations to Vistry Group plc on 3 January 2020 and the associated scheme
of arrangement completed under Part 26 of the Companies Act 2006, shares held in Galliford Try Limited (formerly Galliford Try plc) as at
3 January 2020 (221,603) were exchanged for an equivalent number of shares in Galliford Try Holdings plc and 127,189 shares in Vistry
Group plc (at a rate of 0.57406 Vistry Group plc shares for each Galliford Try Limited share). The Group has disposed of the majority of the
shares in Vistry Group plc, with a residual 14,132 shares held by the Group at 30 June 2023 (2022: 14,132). These shares are recorded at
fair value with the movement being reflected in profit or loss.
27 Financial and capital commitments
The Group had no commitments for subordinated debt to joint ventures or other investments at 30 June 2023 (2022: £nil), nor any
commitment for other capital expenditure.
28 Guarantees and contingent liabilities
Galliford Try Holdings plc has entered into financial guarantees and counter indemnities in respect of bank and performance bonds issued in
the normal course of business on behalf of Group undertakings, amounting to £165.5m (2022: £127.1m).
Disputes arise in the normal course of business, some of which lead to litigation or arbitration procedures. While the outcome of disputes
and arbitration is never certain, the directors believe that the resolution of all existing actions will not have a material adverse effect on the
Group’s financial position.
The continuing evolution of Government legislation and guidance, such as the Building Safety Act and its implications for cladding solutions
used on historical contracts, also creates ongoing uncertainty that the Group manages.
Where the Group has received such claims, the directors have made provision in the financial statements when they believe it is probable
a liability exists and it can be reliably estimated, but no provision has been made where the Group’s liability is considered only possible or
remote. This is based on the best estimates of future costs to be incurred after assessing all relevant information and taking legal advice
where appropriate. The Group’s assessment of liability and estimates of future costs could change in the future. Although the Group has
appropriate insurance arrangements in place that should mitigate any significant exposure, the recognition thresholds under IAS 37 would
mean a liability could be recognised before a corresponding asset.
As Government legislation and guidance changes in the future, the Group will reassess the estimates made accordingly.
Governance
gallifordtry.co.uk
165
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
29 Related party transactions
Transactions between the Group and its related parties are disclosed as follows:
Group
Sales to
related parties
Amounts owed by
related parties
2023
£m
2022
£m
2023
£m
2022
£m
Trading transactions
Related parties71.297.336.838.4
Interest and dividend income
from related parties
2023
£m
2022
£m
Non-trading transactions
Related parties4.14.6
Sales to related parties (all of which are to joint ventures and associates) are based on terms that would be available to unrelated third
parties. Amounts owed by related parties consist predominantly of subordinated debt within the PPP and Other Investments portfolio,
that if held to maturity would be due over the next 25 years (2022: 26 years). These receivables are unsecured, with interest rates varying
between a range of 9% and 12%. Payables are due within one year (2022: one year) and are interest free.
Company
Transactions between the Company and its subsidiaries which are related parties, which are eliminated on consolidation, are disclosed as
follows:
Interest and dividend income
from related parties
2023
£m
2022
£m
Non-trading transactions
Subsidiary undertakings25.015.0
The Company has provided performance guarantees in respect of certain operational contracts entered into between joint ventures and a
Group undertaking.
30 Business combinations
During the year, the Group acquired (i) 100% of the share capital MCS Control Systems Limited and (ii) certain contracts and assets of Ham
Baker Limited (in administration). The Group has also finalised the acquisition accounting of nmcn having previously reported the balances
as provisional in accordance IFRS 3.
(i) MCS Control Systems Limited
On 8 July 2022, the Group acquired 100% of the share capital of MCS Control Systems Limited (“MCS”), a leading systems integrator
to the industrial and utilities sectors for consideration of £1 settled in cash. The addition of MCS’s capabilities is complementary to the
operations of Galliford Try’s expanding Environment business. In particular, MCS provides additional competencies that complement those
acquired in October 2021 with nmcn’s Water business and Lintott Control Systems Limited and will accelerate the growth of Galliford Try
Environment’s asset optimisation and capital maintenance strategy.
The goodwill of £3.2m arising from the acquisition is significantly attributable to the acquired workforce and their technical expertise and
the opportunity to leverage this expertise across the Group to enhance the asset optimisation and capital maintenance strategy.
166
30 Business combinations continued
The following table summarises the consideration paid and the provisional fair value of the assets acquired and liabilities assumed.
£m
Recognised amounts of identifiable assets acquired and liabilities assumed
Property plant and equipment0.1
Intangible assets0.2
Right-of-use assets0.6
Trade and other receivables3.2
Trade and other payables(5.9)
Bank and other borrowings(0.8)
Lease liabilities(0.6)
Total identifiable net liabilities(3.2)
Goodwill3.2
Total–
Consideration
Cash–
Total–
The acquisition contributed £5.7m of revenue and a £0.7m loss before tax and amortisation in the year to 30 June 2023, which is similar to
the contribution it would have made if acquired at the start of the financial year.
(ii) Ham Baker
On 18 November 2022, the Group acquired certain contracts and assets from Ham Baker Limited (in administration) for £225,000 settled
in cash. The Group has acquired the asset inspection, maintenance and screens and distributor operations. The acquired business produces
a variety of engineered products for the water industry, which the Group will use as a basis to develop a low carbon engineering offering,
enabling products and raw materials to be as reused if possible, and reducing waste. The acquisition brings complementary capabilities
to the Group’s growing Environment business and will give it a further advantage in preparing for the water industry’s AMP8 cycle, in
particular addressing storm overflow challenges. It also plays into Galliford Try’s role in decarbonising the industry for a greener, more
sustainable future.
Similar to the MCS Control Systems Limited acquisition, the goodwill of £0.5m arising from the acquisition is significantly attributable to
the acquired workforce and their technical expertise and the opportunity to leverage this expertise across the Group to enhance the asset
optimisation and capital maintenance strategy.
The following table summarises the consideration paid and the provisional fair value of the assets acquired and liabilities assumed.
£m
Recognised amounts of identifiable assets acquired and liabilities assumed
Intangible assets0.1
Trade and other payables(0.4)
Total identifiable net liabilities(0.3)
Goodwill0.5
Total0.2
Consideration
Cash0.2
Total0.2
The acquisition contributed £1.5m of revenue and a £1.6m loss before tax and amortisation in the year to 30 June 2023.
The performance of the business preceding the acquisition was impacted by Ham Baker Limited entering administration, and accordingly it
is impracticable to assess the contribution it would have made to the Group if acquired at the start of reporting period.
Governance
gallifordtry.co.uk
167
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
30 Business combinations continued
(iii) nmcn
On 7 October 2021, the Group acquired the water business of nmcn plc (which had been placed into administration) for £1.0m settled in
cash.
This expanded the Group’s geographical presence on key frameworks across the UK, and its capabilities in the water sector, in line with the
Group’s strategy.
In accordance with IFRS 3, the Group has assessed the acquisition accounting during the measurement period and has identified the need
to reflect a final adjustment to the reported acquisition note in the 30 June 2022 annual report. The change reflects an increase to the
onerous contract provisions and net unfavourable contracts acquired by £0.8m with an offsetting increase in goodwill by £0.8m. As this is
not material, the adjustment has been recorded in the current year (with £11.0m goodwill recognised in the previous year). The finalised
acquisition accounting is detailed below.
£m
Recognised amounts of identifiable assets acquired and liabilities assumed
Net cash and cash equivalents0.7
Property plant and equipment0.1
Intangible assets
1
5.8
Right-of-use assets1.4
Trade and other receivables
2,5
7.8
Trade and other payables
3,5
(10.4)
Provisions and other liabilities
4
(14.5)
Lease liabilities(1.4)
Net deferred tax liabilities
6
(0.3)
Total identifiable net liabilities(10.8)
Goodwill11.8
Total1.0
Consideration
Cash1.0
Total1.0
1 Intangible assets of £5.8m comprise customer relationships and contracts (£5.2m) and technology (£0.6m) that will be amortised over 3–10 years,
2 Trade and other receivables include £4.4m relating to favourable contracts acquired.
3 Trade and other payables include £6.4m relating to unfavourable contracts acquired.
4 Provisions and other liabilities relate to onerous contracts.
5 The favourable and unfavourable contracts have been valued after assessing the margins in the underlying contracts novated.
6 Deferred tax has been recognised where temporary differences arise on the fair value adjustments.
The acquisition contributed £74.1m of revenue and £1.8m of pre-exceptional profit before tax and amortisation (on the acquired
intangibles) in the period to 30 June 2022. The performance of the business preceding the acquisition was impacted by nmcn plc entering
administration, and accordingly it is impracticable to assess the contribution it would have made to the Group if acquired at the start of
reporting period.
Acquisition related costs of £7.7m include legal and professional fees, integration, and staff costs, have been treated as exceptional in the
year of acquisition, being material and non-recurring/irregular items in accordance with our accounting policies and detailed further in
note 4.
31 Events after the reporting date
There were no material post balance sheet events arising after the reporting date.
168
32 Alternative performance measures
Throughout the Annual Report and Accounts, the Group has presented financial performance measures which are used to manage the
Group’s performance. These financial performance measures are chosen to provide a balanced view of the Group’s operations and are
considered useful to investors as they provide relevant information on the Group’s performance. They are also aligned to measures used
internally to assess business performance in the Group’s budgeting process and when determining compensation. An explanation of the
Group’s financial performance measures and appropriate reconciliations to its statutory measures are provided below.
Providing clarity on the Group’s alternative performance measures
The Group has included this note and the enclosed explanations and reconciliations with the aim of providing transparency and clarity on the
measures adopted internally to assess performance. The APMs adopted by the Group are also commonly used in the sectors it operates in.
The Board believes that disclosing these performance measures enhances investors’ ability to evaluate and assess the underlying financial
performance of the Group’s operations and the related key business drivers.
These financial performance measures are also aligned to measures used internally to assess business performance in the Group’s budgeting
process and when determining compensation.
Measuring the Group’s performance
The following measures are referred to in this report:
Statutory measures
Statutory measures are derived from the Group’s reported financial statements, which are prepared in accordance with UK adopted
International Accounting Standards and in line with the Group’s accounting policies, that can be found in note 1.
The Group’s statutory measures take into account all of the factors, including exceptional items which do not reflect the ongoing underlying
performance of the Group.
Alternative performance measures
In assessing its performance, the Group has adopted certain non-statutory measures that more appropriately reflect the underlying
performance of the Group. These typically cannot be directly extracted from its financial statements but are reconciled to statutory
measures below:
a) Pre-exceptional performance
The Group adjusts for certain material one-off (exceptional) items which the Board believes assist in understanding the performance
achieved by the Group as this better reflects the underlying and ongoing performance of the business. A reconciliation of the statutory
measure to the pre-exceptional measure is provided in the following tables. In the financial year ending 30 June 2023, the Group has also
presented pre-exceptional performance excluding a one off contract settlement as announced on 8 June 2023 (disclosed in the consolidated
income statement as an impairment of financial assets of £2.8m).
b) Operating profit before amortisation
The Group adjusts operating profit to exclude the amortisation of intangible assets as this better reflects the ongoing performance of the
business. Operating margin reflects the ratio of pre-exceptional operating profit before amortisation of intangible assets and revenue. In the
financial year to 30 June 2023, operating margin also excludes the one off contract settlement as announced on 8 June 2023. This differs
from the statutory measure of operating profit which includes the amortisation of intangible assets. Divisional operating margin is the
combined operating margin of Building and Infrastructure.
Governance
gallifordtry.co.uk
169
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Notes to the consolidated financial statements continued
32 Alternative performance measures continued
A reconciliation of the statutory measure to the Group’s performance measure is shown below, based on continuing operations:
Business Park, Bellshill, North Lanarkshire, ML4 3NJ6%
The above entities are all incorporated in the UK except Galliford Try Qatar LLC, which is incorporated in Qatar.
Entities listed above with 50% ownership percentage are treated as associates, as indicated by their ownership agreements.
Governance
gallifordtry.co.uk
173
Financial statementsStrategic report
Galliford Try Annual Report and Financial Statements 2023
Five-year record (unaudited)
2019
£m
2020
1
£m
2021
1
£m
2022
1
£m
2023
1
£m
Revenue 1,400.11,121.61,124.81,237.21,393.7
Profit/(loss) before exceptional items (17.2)(59.7)11.419.120.6
Exceptional items (47.3)25.1–(13.7)(10.5)
Profit/(loss) before taxation(64.5)(34.6)11.45.410.1
Tax15.02.0(1.0)0.9(1.0)
Profit/(loss) after taxation attributable to shareholders(49.5)(32.6)10.46.39.1
Fixed assets (including IFRS 16 right-of-use assets), investments in
joint ventures, PPP and other investments124.8 67.573.279.490.4
Intangible assets and goodwill171.4 85.082.997.098.3
Net current assets/(liabilities)340.2(14.4)(24.4)(43.4)(61.4)
Other long-term assets 246.75.314.314.015.5
Long-term payables and provisions(203.8)(22.9)(11.9)(14.9)(24.2)
Net assets 679.3120.5134.1132.1118.6
Share capital 55.5 55.555.555.552.4
Reserves 623.865.078.676.666.2
Shareholders’ funds 679.3120.5134.1132.1118.6
Dividends per share (pence)58.0–4.78.022.5
Basic earnings per share (pence)
2
(10.7)(47.7)9.516.016.6
Diluted earnings per share (pence)
2
(10.6)(47.7)9.115.015.6
1 Income Statement and earnings per share balances reflect continuing operations only, accounted for in accordance with IFRS 5. The 2019 balance sheet reflects the
whole Group, including housebuilding, in those years.
2 Pre-exceptional.
174
Shareholder information
Financial calendar 2023
Half year results announced3 March
Full year results announced20 September
Ex dividend date – special dividend5 October
Special dividend record date6 October
Special dividend27 October
Ex dividend date – final dividend9 November
Final dividend record date10 November
Annual General Meeting10 November
Final dividend payment8 December
Shareholder enquiries
The Company’s registrars are Equiniti Limited. They will be pleased
to deal with any questions regarding your shareholding or dividend
payments. Please notify them if you change your address or other
personal information. Call the shareholder contact centre on 0371
384 2202. Lines open from 8.30am to 5.30pm, Monday to Friday.
Alternatively, write to them at:
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
You can find a number of shareholder services online via their
website at www.shareview.co.uk, including the portfolio service
which gives you access to more information on your investments
such as balance movements, indicative share prices and information
on recent dividends. You can also register your email address to
receive shareholder information and Annual Report and Accounts
electronically.
Share dealing service
A telephone and internet dealing service is available through
Equiniti which provides a simple way of buying and selling Galliford
Try shares. Commission is currently 1.5% with a minimum charge
of £60 for telephone dealing and a minimum charge of £45 for
internet dealing. For telephone sales call 0345 603 7037 between
8.00am and 4.30pm, Monday to Friday, and for internet sales log on
to www.shareview.co.uk/dealing. You will need your shareholder
reference number as shown on your share certificate. Share
dealing services are also widely provided by other organisations.
The Company is listed on the London Stock Exchange under the
code GFRD and the SEDOL and ISIN references are BKY40Q3 and
GB00BKY40Q38.
Group website
You can find out more about the Group on our website www.
gallifordtry.co.uk which includes a section specifically prepared
for investors. In this section you can check the Company’s share
price, find the latest Company news, look at the financial reports
and presentations as well as search frequently asked questions and
answers on shareholding matters. There is also further advice for