Delivering
Sustainable
Growth
Galliford Try Holdings plc
Annual Report and Financial Statements 2023
GallifordTry Annual Report & Accounts 2022
Delivering
Sustainable
Growth
Find out how our Sustainable Growth Strategy...
Champions a people-orientated,
progressive culture
We prioritise health, safety and wellbeing
above all and invest in retaining, developing
and attracting the right talent.
Delivers high-quality
buildings and infrastructure
Our approach to innovation, digitalisation,
low carbon and collaborative supply
chain relationships enables us to deliver
excellence for our clients.
Drives us to operate in a
socially responsible way
Across our operations, we seek to protect
the environment and make a positive
impact in the community.
Provides sustainable
financial returns
A disciplined approach to contract selection,
embedded risk management practices and
strong balance sheet ensures we earn a
sustainable return on the value we deliver.
Read more p24 →
Read more p36 →
Read more p30 →
Read more p45 →
Strategic report
02 At a glance
04 Our business model
06 Our investment case
08 Chair’s statement
10 Market review
Delivering Sustainable Growth
14 Our Sustainable Growth Strategy
18 Chief Executive’s review
22 Operating sustainably
A progressive culture
25 Health and safety
27 Our people
Socially responsible delivery
31 Environment and climate change
34 Communities
Qualityandinnovation
37 Clients
41 Supply chain
43 Human rights and modern slavery
Sustainablefinancialreturns
45 Financial review
48 Operating review
52 Risk management
57 Task Force on Climate-related Financial
Disclosures
70 Stakeholder engagement and s172(1)
statement
Governance
74 Chair’s review
76 Directors and Executive Board
78 Governance review
90 Nomination Committee report
94 Audit Committee report
98 Remuneration Committee report
102 Directors’ Remuneration Policy report
109 Annual report on remuneration
117 Directors’ report
121 Statement of directors’ responsibilities
Financial information
122 Independent auditor’s report
130 Consolidated income statement
131 Consolidated statement of
comprehensive income
132 Balance sheets
133 Consolidated and Company statements
of changes in equity
134 Statements of cash flows
135 Notes to the consolidated financial
statements
174 Five-year record (unaudited)
175 Shareholder information
Financial performance
£1,394m
Revenue
(2022: £1,237m)
£20.6m
Pre-exceptional profit
before tax
1
(2022: £19.1m)
£3.7bn
Order book
(2022: £3.4bn)
£19.1m
Pre-exceptional operating
profit before amortisation
1
(2022: £18.5m)
16.6p
Pre-exceptional earnings
per share
1
(2022: 16.0p)
£10.1m
Profit before tax
(2022: £5.4m)
£135m
Average month-end cash
(2022: £174m)
10.5p
Full year dividend per share
(2022: 8.0p)
£8.7p
Earnings per share
(2022: £5.8p)
2.4%
Divisional operating
margin
1
(2022: 2.4%)
1 See note 32 for our alternative
performance measures.
Leadingonallfronts
Chief Executive’s review p18 →
“We are proud to be at the forefront of the vital role
construction is playing in the future of the UK.
“Construction is all about people, so we lead with the idea that
what we do makes a real difference to people’s lives. We are
contributing to the decarbonisation of the UK, while unlocking
the potential of digitalisation and innovation to drive efficiency.
We are working in partnership with our supply chain to deliver
high-quality buildings and infrastructure for our clients and
communities, and we are leaving a positive legacy for wider
society through the skills, training and employment we provide.
This pursuit of long term-value for our stakeholders is key to
our success and is demonstrated across all our key performance
indicators, from revenue to margin and order book. Coupled with
our excellent market position and continued demand, we are
excited about the future and look forward with confidence.”
Bill Hocking
Chief Executive
Strategic report Governance Financial statements
gallifordtry.co.uk
01
Galliford Try Annual Report and Financial Statements 2023
At a glance
A progressive
UKconstruction
business
We are playing our part in the
improvement of the UK’s built
environment, driving forward the role
of construction as an agent of change
What we
believe
Our purpose
To improve people’s lives by building
the facilities and infrastructure that
communities need, while providing
opportunities for our people to learn,
grow and progress; working with our
supply chain to promote the very best
working practices; and caring for the
environment in which we work.
Our vision
To be a people-orientated, progressive
business, driven by our values to
deliver for our stakeholders and the
communities we work in.
Excellence
Striving to
deliver the best.
Integrity
Demonstrating
strong ethical
standards with
openness and
honesty.
Passion
Committed and
enthusiastic in
all we do.
Collaboration
Dedicated to
working together
to achieve results.
See People p27 →
Our values
02
What we do
We are a major construction group, operating
predominantly as Galliford Try in England
and Wales, and Morrison Construction in
Scotland. Our network of regional offices is
a key advantage, offering clients the benefit
of national strength with local relationships.
Our approach to digitalisation and low carbon
capabilities are increasingly sought after by
clients in our sectors.
Building
Operates across the UK, designing, constructing
and refurbishing assets across markets where
we have expertise and significant opportunities,
particularly the education, health, defence,
custodial and commercial sectors. Our Facilities
Management business works with Building, with
an emphasis on the education and health sectors.
Its capabilities include delivering high-quality, full
life-cycle solutions to our clients.
Operating review p48 →
Infrastructure
Our Infrastructure division carries out vital civil
engineering projects across the UK.
In the water and sewage sectors, we are one of the
largest players in the market, and carry out capital
delivery and maintenance, and asset optimisation.
We contribute substantially to the national road
network, from major project delivery of large-scale
schemes to local authority works, maintenance and
urban, multi-modal transport schemes.
Investments
Has expertise in leading bid consortia and
arranging finance to devise and secure the
right solution on an individual basis, making us
attractive to clients. We specialise in managing
construction through to operations for major
building projects via public private partnerships.
These skill sets are now being used to progress
co-development opportunities, with a focus on the
PRS (Private Rented Sector).
We seek clients who value a collaborative
approach and long-term relationships,
for example by working in frameworks.
Frameworks are multi-year procurement
vehicles used by public and regulated sector
clients. They provide greater opportunities
for deeper, collaborative working and
support the achievement of wider strategic
and social goals, better understanding
between parties, early mitigation of risk
and ultimately repeat business.
Who we
work with
We primarily work with clients in the public
and regulated sectors, where we have core
strengths and a track record, based on a strong
understanding of client requirements, the
market and risk profile. We focus on education,
health, defence, custodial, highways and
environment, as well as the commercial sector.
87%
ofourorderbook
is in the public and
regulated sectors.
87%
ofourorderbookis
with repeat clients.
82%
ofourorderbook
isinframeworks.
Aflagshipcarbonneutralresearchanddevelopmentfacility
Delivered for the National Manufacturing Institute Scotland,
part of the University of Strathclyde (read more on page 40).
Strategic report Governance Financial statements
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03
Galliford Try Annual Report and Financial Statements 2023
AprogressiveUKconstructionbusiness
Our business model
What we do How we do it
How we make money
Building
Design
Refurb
Build
Fit-Out
Design
Maintain
Build
Optimise
Infrastructure
Investments
+ Manages construction
through to operations for
major building projects via public
private partnerships.
+ Participates in co-development
opportunities, focusing on the
PRS (Private Rented Sector).
Facilities
Management
+ Provides full life-cycle Facilities
Management (FM) solutions for
clients from the Building sectors.
Education
Highways
Health
Environment
Identifying
opportunities
We seek opportunities within our chosen
markets and only pursue those where we
have the skills, expertise and resources
to successfully complete the work safely,
profitably and to a high quality.
Alignment
to risk appetite
We assess risks to ensure all aspects
of a contract’s terms and conditions
satisfy our strict criteria.
Risk management p52 →
Assembling a team
and procuring products
and services
We assemble the right team, including
subcontractors, suppliers and consultants,
to carry out specific aspects of works such
as mechanical and electrical work.
People p27 →
Supply chain p41 →
Construction
We carry out the agreed work managing
safety, time, budget, quality and carbon
requirements, as well as programme,
resources and costs.
We make a profit by
carefully selecting the
work we take on and
executing it well.
High-quality revenue
We target lower-risk contracts
that typically comprise:
Target cost/cost
reimbursable
An overall target contract
value is agreed with the client,
including margin, risk and
inflation contingencies, and the
actual cost of the work plus an
agreed fee is paid by the client.
Any cost savings or overspends
against the target are shared
between us and the client.
Fixed-price
The final price and programme
is negotiated on a sole basis
following early involvement,
resulting in a fixed-price for a
defined scope at point of final
contract award.
We earn revenue and profit
from our PPP Investments and
FM businesses, which offer
lower-risk annuity type income
and margin accretion.
Goodcapitalmanagement
Our business is typically cash
generative, as we receive regular
payments from clients as projects
progress. We do not require
significant investment in fixed assets
or working capital and deploy a
modest amount of cash for ongoing
investment in the business and for
investing in PPP or co-development
projects. This supports predictable
cash flow, margin improvement and
shareholder returns.
Capital allocation p47 →
We are proud to deliver vital buildings and infrastructure
across the country that make a real difference to people’s lives.
Defence
& Custodial
Commercial/Other
04
Discover more
Health
andsafetyp25
Peoplep27
Environment
andclimate
change p31
Clientsp37
Supply
chain p41
Financial
reviewp45
Communities
p34
Resources and relationships Value we create
People
Success comes from our people so
we attract, retain and develop the right
talent for our business, prioritising their
health, safety and wellbeing and creating
an inclusive environment where they
can thrive.
Natural resources
Our building processes use natural
resources, including land, materials
and energy.
Clients
We carefully choose the sectors we want to
work in and the clients we partner with.
Supply chain
Our supply chain predominantly consists of
i) subcontractors – who operate on our sites
and ii) suppliers – who provide materials.
Communities
Engaging with the communities where we
work enables us to deliver greater social
value for them, and ensures we can carry out
our work effectively.
Financial strength
We maintain a robust balance sheet to give
clients, our supply chain and shareholders
reassurance that we are a financially
sustainable business.
3,747
jobs provided.
13,528 days
oflearningand
development
provided.
69%
reductioninScope1
and2carbonemissions,
since we started
reportingthemin2012,
and excluding recent
acquisitions.
87% of
our £3.7bn
orderbookisfor
the public and
regulated sectors.
Gold status
fromtheSupplyChain
Sustainability School.
98%
ofinvoicespaid
in60days.
£328m
ofSocialandLocal
EconomicValue
created through
the work we do.
£347k
Charitabledonations.
10.5p
Fullyeardividend
per share.
Strategic report Governance Financial statements
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05
Bids
selected
Bid opportunities
Initial consideration
Heat map
BU approval
Board approval (if needed)
Galliford Try Annual Report and Financial Statements 2023
Our investment case
Acompelling
investment
Our high-quality business, driven by a progressive
culture and leading positions in robust market sectors,
is generating increasing returns for our shareholders.
Robustmarket
opportunity
The UK’s investment in economic and social
infrastructure remains resilient. This demand for
our services is underpinning growth in our existing
markets, where we have leading positions, and
adjacent markets where the nature of the work is
complementary to our existing capabilities, and
where risk profiles are within our appetite, and there
are higher margins to take advantage of.
Rigorous risk
management
We have a strong culture of discipline and risk
management and only pursue opportunities where
we have the skills, resources and contract terms and
conditions to be successful.
We are selective about the work we take on and
prioritise bottom line growth over revenue. This drives
a high-quality order book which is characterised by
its longevity through frameworks; a repeat client base
who we know and can work collaboratively with; and
embedded cash and margin profiles. This leads to work
we can execute with confidence in addition to pipeline
visibility, which enables us to effectively resource
projects with our people and supply chain.
Read more p52 →
Read more p10 →
06
Strongfinancial
position
We are demonstrating a track record of consistent
and predictable financial results. Our robust balance
sheet is attractive to clients, as they seek to work
with contractors who can deliver for them in the
long term. It is also valued by our supply chain who
want prompt payment and forward visibility of work.
This, in turn, enables us to resource our projects
effectively in periods of high demand. Balance
sheet strength means we can invest in our people,
technology and business to develop our capabilities
and it gives us agility and the ability to react quickly to
strategic opportunities, including bolt-on acquisitions
aimed at enhancing our capabilities and driving up
margin. Finally, it reinforces our ability to maintain a
selective approach to the work we pursue.
A progressive
culture
Our approach to running a good construction business
that can perform consistently and predictably revolves
around attracting and retaining the right people, who
share our purpose, values and objectives. We create
a productive working environment where people can
be themselves and are motivated to give their best, we
empower them with the tools and resources required
to carry out their work, and we reward them with
development opportunities, a comprehensive benefits
package and the flexibility to balance their personal
lives with their professional goals.
Read more p24 →
Read more p45 →
Strategic report Governance Financial statements
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07
Galliford Try Annual Report and Financial Statements 2023
Alison Wood
Chair
A culture-driven
performance
A strong culture and progressive attitude are driving
great performance and delivering long-term value
for Galliford Try’s stakeholders
Overview
In my first year as Chair, I have been
impressed by the contribution the Group
is making to the future of the UK. This is
being achieved both through the buildings
and infrastructure the Group delivers,
and a legacy of education, training, and
investment in local initiatives, people and
businesses. There is a genuine focus on
wider societal benefit that is shared from
site to Board room, by passionate teams,
who are working towards a common goal,
with shared values. This starts with h
ealth, safety and wellbeing, and extends
to decarbonising the environment.
A successful construction company by
its nature must consider its stakeholders
and environment, and it is evident this
has been long-ingrained in Galliford Try’s
culture, decision-making and operations.
The business is built on a strong foundation
of risk management which is embedded in
the culture of the business and drives
long-term sustainability.
Chair’s statement
08
A strong performance driving
enhanced shareholder returns
This year has proven to be another
successful year for Galliford Try despite
industry challenges around inflation, skills
and material shortages, which now appear
to be easing.
Pre-exceptional profit before tax rose by
7.9% to £20.6m (2022: £19.1m) and by 23%
to £23.4m excluding the £2.8m contract
settlement previously announced. Divisional
operating margin remained robust at 2.4%.
Cash remains a differentiator for Galliford
Try and, encouraged by a consistently strong
average month-end cash balance, the Group
launched a share buyback programme in
September 2022 to repurchase up to £15m
of ordinary shares of 50 pence per share.
The Board is satisfied with the progress of
this buyback programme, with a total of
7,985,696 shares purchased and cancelled
as at 15 September 2023.
During the year, the Group resolved a
long running, complex and challenging
multi-contract dispute, which resulted
in settlement via a cash payment to the
Group of £26m, generating an initial cash
distribution by way of special dividend
declared by the Board of 12.0p per share
payable to shareholders in October 2023.
The Board’s confidence in the outlook
has led to an improved dividend policy,
of earnings covering the dividend by 1.8
times. Alongside dividend growth from our
operational performance, this improvement
reflects the low-risk nature of the PPP asset
portfolio and its annuity interest income,
and provides a sustainable increase in
dividend to shareholders while retaining
capital to invest in growing the business.
Having paid an interim dividend of 3.0p,
up by 36% on the 2.2p per share paid in
the prior year, the Board has proposed a
final dividend of 7.5p per share (2022: 5.8p
per share). The total dividend for the year
is therefore 10.5p, up 31% (2022: 8.0p)
and in line with the improved cover policy,
reflecting the Board’s confidence in the
Group’s performance, outlook and strong
balance sheet.
Sustainable Growth Strategy
Progress is being made across all aspects of
the Group’s Sustainable Growth Strategy
with improvement in key areas including
margin and revenue. The acquisitions of
specialist businesses MCS Control Systems
and Ham Baker, during the year, have
further enhanced the Environment business,
while growth in Building and Infrastructure
is also contributing to strategic goals.
Underpinning the Sustainable Growth
Strategy are our four pillars of a progressive
culture, socially responsible delivery, quality
and innovation, and sustainable financial
returns. These Environment, Social and
Governance (ESG) pillars are a core part of
the Board’s strategic focus, and also reflect
the needs of our stakeholders.
Monitoring and assessing
stakeholders’ interests and ESG
Monitoring and assessing how we engage
with our stakeholders, their interests and
how we manage ESG matters are significant
themes for the Board during decision-
making and form an important part of the
Group’s Sustainable Growth Strategy, where
stakeholders’ interests and ESG are viewed
as an opportunity.
We have an ESG Committee and Employee
Forum and both are led and chaired by plc
Board directors. These platforms provide
valuable insights for the Board and enable
us to test ideas for future consideration as
well as understanding current sentiment on
strategic direction.
Management and the Board
I became Chair on 21 September 2022,
when Peter Ventress stepped down from
the role. On 31 March 2023, Gavin Slark,
Non-executive Director, resigned from the
Board after over seven years. The Board is
grateful for the contributions of Peter and
Gavin over the years and wishes them every
success in the future.
We were pleased to welcome Michael
Topham as Non-executive Director on 1
June 2023, as you can read about on pages
91 and 94.
Looking forward
I am delighted with the progress Galliford
Try has made during the year and am
confident that the business is in an excellent
position to meet its 2026 objectives. I thank
Bill, his leadership team and all our people
for their continued efforts.
Alison Wood
Chair
Our 2023 survey of
our people confirmed
we have embedded a
strong culture, which
will fuel our ambitions,
and ensure we grow our
business the right way.
A purpose-led
culture
Employee
survey highlights
95%
ofpeoplesaidwegivehealth
andsafetyahighpriority
(2022:95%).
86%
ofpeoplesaidtheywould
recommendGallifordTry
as a great place to work
(2022:85%).
72%
ofpeoplesaidwegivequality
highpriority(2022:63%).
See People p27 →
Strategic report Governance Financial statements
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09
Galliford Try Annual Report and Financial Statements 2023
Market review
Seizingopportunities
Macroeconomic challenges are showing signs of easing, with inflation
subisiding and positive signs for longer-term prospects across the
construction sector.
Careful management of supply chain and inflationary pressures have
helped to mitigate against our exposure to cost and availability challenges
and we are seeing preferred bidder positions, which were previously
delayed by inflation, now converting to contract awards.
Our chosen markets are non-cyclical and show strong demand, driven by
the UK’s ambitions for innovation, decarbonisation and digitalisation. The
availability of materials is generally good, having eased during the year.
Our investment in our people and future talent pools will ensure we
retain a skilled and competent workforce, which remains in demand
across our sector.
There is a strong overall sense of confidence in the future of the industry,
and, this provides encouragement for the Group’s future.
The£17mBirminghamOrmistonAcademyDigitalAcademy
A brand new, purpose-built academy delivering a specialist education
in creative and digital technologies which will help to address the
growing demand for higher level digital skills.
10
+ Our Environment business has evolved its capabilities
from traditional design and build to include capital
maintenance and asset optimisation through the
acquisitions of nmcn’s water operations, Lintott, MCS
Control Panels and Ham Baker.
+ This has facilitated a ‘Source to Sea approach’ which
uniquely positions us to offer capabilities across the
lifecycle of client assets, including asset efficiency,
resilience and optimisation.
+ Our acquisitions have introduced off-site build
capabilities, enabling the manufacture and assembly of
key components in a controlled factory environment.
This delivers increased efficiency and predictability, and
reduces safety risk on site.
+ Our investment in digitalisation, including digital twins
and AI, is enabling optimisation of processes, and
allowing for benchmarking and real-time analysis and
responses.
+ Our carbon capabilities are enabling our clients to meet
both their net zero carbon ambitions, and objectives to
deliver value for customers in the long run.
An ageing asset base means infrastructure is
in need of replacing or maintenance must be
carried out more frequently.
Clients are under pressure to be resilient to both
short-term shocks and long-term challenges such
as population growth and climate change, while
delivering value and service for customers.
There is increasing regulatory focus on asset
optimisation to extend the operational lifespan
of existing facilities.
Increasingly stringent environmental and carbon
regulations such as The Environment Act 2021 have
introduced targets to improve biodiversity, tackle
pollution, reduce waste and to deliver a supply of
clean and plentiful water for all.
Market opportunity
Investment in the UK’s social and economic
infrastructure, driven by long-term demand
for physical buildings and infrastructure
Strategy in action
Meeting the increasing needs of the water sector
Our water sector clients are facing unprecedented, widely publicised challenges which are driving urgent investment.
Our actions have positioned our Environment business uniquely to help meet these needs.
There is a continued drive to build a
stronger economy following the pandemic,
using construction as a way to stimulate
activity, provide high levels of employment
and ensure we have the infrastructure
to support the country. The Autumn
Statement in November 2022 earmarked
an investment of over £600bn over the
next five years, maintaining commitments
to deliver major infrastructure projects.
The Government announced plans to
accelerate delivery of projects across its
infrastructure portfolio, and ensure that all
infrastructure is delivered quickly through
reforms to the planning system, including
updating National Policy Statements for
transport and water resources.
Howourapproachrespondstothemarket
+ Establishedoperationsingrowth
markets: we are a key contractor for
the Government working across sectors
including roads, water, education, health
and defence, which form the backbone of
the country’s infrastructure. A significant
87% of our order book is in the public and
regulated sectors and 82% of our order
book is in frameworks, which are a key
procurement route for the delivery of
national infrastructure projects.
+ Nationalpresenceandlocal
relationships:we have a national
presence from the Highlands in Scotland,
to Plymouth in the South West of
England. Our local relationships position
us well to help the Government’s aim
to tackle geographic disparities in key
services and outcomes, such as health,
education and jobs and improving lives by
bringing more places across the UK closer
to opportunity through infrastructure.
Sector challenge
How our Sustainable Growth Strategy has responded
Strategic report Governance Financial statements
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11
Galliford Try Annual Report and Financial Statements 2023
Howourapproachrespondstothemarket
+ Assetoptimisationandretrofit
capabilities: our capabilities in asset
optimisation and retrofit enable our
clients to reduce carbon emissions,
increase the lifespan of their facilities
and to optimise their performance
including environmental credentials.
+ Investinginknowledge: upskilling
our teams to better understand
how we can design, build and
maintain low carbon infrastructure
and buildings through selection
of materials and construction
methodologies, operational energy
consumption and, where relevant,
end-of-life decommissioning, is
increasingly enabling our clients
to achieve their carbon goals.
+ Digitalisationforefficiency: our
approach to digitalisation and
adoption of new technologies
such as design rationalisation
using our Building Information
Modelling (BIM) tools and
experience helps us avoid over-
specification and reduce materials
consumed and waste created.
+ AdoptingModernMethodsof
Construction(MMC) such as off-site
manufacture helps to minimise waste
and uses materials more efficiently.
+ OurJourneytoNetZero: our
record of reducing our own carbon
emissions and commitment to
achieving net zero carbon are
attractive to existing and potential
clients, as well as being important to
employees who want to work for a
company that does the right thing.
Howourapproachrespondstothemarket
+ Early planning gives us visibility of
product availability during times
of higher demand and helps us to
plan for longer lead times where
needed. Maintaining matrices of
key materials ensures we are aware
of any shortages, and can plan
effectively to mitigate potential
delay. These processes are stepped
up during times of shortages.
+ Preventativemeasures such as
building protections into our
contracts and procuring materials
early help us to mitigate against
inflation and build in a degree of
tolerance. Inflation is also assessed
and managed during bidding.
+ Collaborativerelationships:we
maintain strong relationships with
key suppliers and subcontractors
by giving them an insight into our
pipeline, paying them promptly
and offering them training and
resources, for example through
our Advantage through Alignment
scheme, our behavioural safety
programme, membership of the
Supply Chain Sustainability School
and our recently launched Net Zero
Partners initiative. This two-way
relationship ensures we remain a
priority customer for our supply chain
during times of heightened demand.
+ Ourstrongfinancialpositionand
disciplinedfocusonriskmanagement
enable us to plan for the future
and successfully manage, without
any significant overall impact
on trading, challenges around
inflation and material shortages.
Market review continued
Market opportunity
Drive for decarbonisation and action on climate change
Asthefrequencyandseverityof
extremeweathereventssuchas
prolongedheatwavesandintenserainfall
increases,thereisaneedtomakepublic
infrastructuremoreresilienttothe
changingclimate(page57).Thisisalready
asignificantissueforthewatersector
wherethecapacityoftheexistingsewerage
andwastewatertreatmentinfrastructure
is struggling to keep pace with the
demandsplacedonit,forexampleby
populationgrowth.
The UK’s Ten Point Plan for a Green
Industrial Revolution prioritises ‘clean
growth’ as it delivers on its aim to achieve
net zero carbon emissions by 2050, and
earmarks £12bn of spending in areas from
energy generation to building retrofits.
The 2022 Autumn Statement also identified
the construction sector as a key means of
achieving the country’s net zero carbon
objectives and The Construction Playbook,
which sets out guidance for how public
works are procured, places a major focus
on sustainability. Decarbonisation therefore
provides a revenue growth opportunity
for us.
Market challenge
Managing inflation and supply shortages
Materialcostinflationreducedoverthe
yearassupplyimbalanceshaveeasedand
leadtimesforkeymaterialsarenowmore
predictableandshorterthanin2022.
The length of time taken to enter new
contracts in 2022 increased, initially in
response to rising inflation and later due
to delays in public sector decision-making.
Delays in signing new contracts are now
easing and preferred bidder positions are
converting to contract award.
12
Market opportunity
Drive for innovation and digital
TheConstructionSectorDealrecognises
ourindustry’spotentialtobeatthe
coreoftheUK’sdigitalandtechnical
transformationthroughinnovative
technologiesandmethodsofconstruction.
Market challenge
Skilled and experienced people are in high demand across the UK
Asinvestmentinconstructionprojects
startstogrow,demandisfurther
highlightingthelackofskilledprofessionals
inthemarket.Theselabourandtalent
shortagescouldsignificantlyimpactthe
deliveryoftheUK’sinfrastructure.
Howourapproachrespondstothemarket
+ Digitisedapproachtoproject
delivery: we have a proactive
approach towards digital-driven
processes and technology throughout
our operations, and have an entirely
digitised approach to project
delivery, which helps improve
safety, quality and collaboration,
and can drive down carbon.
+ BIM(BuildingInformation
Modelling):we have authored
part of ISO 19650 as well as being
active contributors to BIM industry
guidance. Together with standards
such as ISO 16739 and our BIM and
technical services policies, these form
the foundation of our BIM strategy,
which is updated regularly to keep
abreast of advancements in the field.
+ COBie(ConstructionOperations
BuildingInformationExchange):
we are one of the few contractors
in the UK with advanced knowledge
in the UK Government’s chosen
standard industry exchange
schema, COBie, and we have a
BuildingSMART certified COBie
professional leading our strategy.
+ MMC: we embrace MMC, utilising
pre-manufactured components to
deliver reductions in time, material
use and waste as well as cost-
savings, health and safety benefits
associated with less site activity, and
a higher level of quality assurance.
Recent acquisitions have bolstered
our off-site build capability.
Howourapproachrespondstothemarket
+ EVP(EmployerValueProposition):
over the last 18 months, we have
invested in our EVP – the unique set
of benefits that our people receive
in return for the skills, capabilities,
and experience they bring to our
business so that we can attract top
talent and encourage retention.
+ Ourpeople-orientatedculture
including initiatives such as
agile working and our focus on
wellbeing, make Galliford Try a
more attractive employer and help
us to appeal to a diverse audience,
broadening the pool of potential
recruits and supporting retention.
+ Benefits:we continue to monitor
and enhance our total rewards
package to improve our proposition
to employees. As well as salary and
bonus, this extends to company car/
car allowance, paid volunteering days,
employee assistance programmes,
private healthcare and more.
+ Buildingtalentpools: our graduate,
trainee and apprentice programmes
allow us to build our own talent pool.
In addition, we actively promote
our industry to school and college
leavers, as well as graduates through
social media use, presentations,
visits to our sites and careers
exhibitions, which help to encourage
a career in construction for future
generations. Our approach breaks
down stereotypes of the industry and
presents it as an important enabler
of the UK’s plans for the future.
+ Investmentinourpeople’slearning
anddevelopment ensures we have
the skills we need to carry out our
operations and is seen as an attractive
benefit to existing and potential talent.
+ Successionplanning: a structured
approach to succession planning
enables us to meet the future needs
of our business with less likelihood
of disruption to operations.
Strategic report Governance Financial statements
gallifordtry.co.uk
13
Sustainable
Growth
2026 revenue target
£1.6bn
(2021: £1.1bn)
(2021: 2.0%)
2026 divisional operating
margin target
3.0%
Health and safety Environment &
climate change
Delivering sustainable growth
Supply chain
Our people
Communities
Clients
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Quality and innovation
Socially responsible delivery
Sustainable financial returns
A progressive culture
Galliford Try Annual Report and Financial Statements 2023
Our Sustainable Growth Strategy
Delivering Sustainable Growth
Our strategy targets sustainable growth across revenue
and margin to 2026, from a baseline of our full year
results in 2021. Our focus is on margin growth, with
revenue targeted where our markets support growth.
Growth via existing markets
Building Highways Environment
Growth via adjacent markets
Private Rented
Sector (PRS)
Capital
maintenance and
asset optimisation
within the existing
Environment sector
Green
retrofit
14
To ensure our long-term success, our strategy considers the needs of
our stakeholders to ensure we create value for them as well as meeting
our financial objectives, by prioritising a progressive culture, socially
responsible delivery, and focus on quality and innovation.
What we want to do How we will achieve it Why we want to do it
Increasemargin
and revenue in
existingmarkets.
Increasemargin
and revenue
through growth in
complementary
and adjacent
markets.
Increasingvolumes in our
existing markets within
Environment, Highways and
Building by growing in our
current geographies will enable
margin and revenue growth.
Continuingtooperate
sustainably with a focus
on risk management and
disciplined contract selection,
targeting a high-quality order
book, investing in our people,
and embracing digitalisation
and MMC.
Pursueworkin:
❶Private Rented Sector (PRS).
❷Capital maintenance and
asset optimisation within
the existing Environment
sector.
❸Green retrofit.
We understand these markets
and their risk profiles and
are already working in these
sectors, predominantly in
frameworks. We have the
potential to grow within
these areas by bringing all
of our Business Units up to
critical mass.
These are all higher-margin
activities and will contribute
considerably to our margin
growth targets.
The nature of the work is
complementary to our existing
capabilities, we are present in
these markets across the UK,
and they have acceptable risk
profiles within our appetite.
Strategic report Governance Financial statements
gallifordtry.co.uk
15
Galliford Try Annual Report and Financial Statements 2023
OurSustainableGrowthStrategyisto:
Strategic priority Objective KPI Ambition FY22 FY23 Progress
Champion
a people-
orientated
progressive
culture.
Health and safety
See p25 →
Prioritising health, safety and wellbeing
and ensuring no harm to anyone linked
with our operations.
+ Lost Time Frequency Rate (LTFR)
No harm 0.26 0.20 + Our health and safety performance remained relatively
stable. AFR rose slightly while LTFR, a broader measure
of safety, fell.
+ At the same time, 95% of employees said we give health
and safety high priority.
+ Accident Frequency Rate (AFR) No harm 0.06 0.09
Our people
See p27 →
Creating an inclusive environment and
progressive culture that enables all
individuals to reach their potential.
+ Employee advocacy score
>80% 85% 86% + Our employee advocacy score increased slightly this year.
It was also significantly higher than the sector benchmarks
at 71%.
+ Early careers as a % of total
employees
>8% 6.1% 6.3%
+ Women as a % of total employees Year-on-year increase 21.2% 21.6%
Operate
in a socially
responsible
way.
Environment and
climate change
See p31 →
Adopting sustainable resourcing and
consumption practices and taking
measures to mitigate carbon production
and climate change to protect our
environment and biodiversity.
+ Scope 1 and 2 carbon emissions
(CO
2
e tonnes)
Net zero by 2030 10,795 11,822 + Since 2012, we have reduced our Scope 1 and 2 carbon
emissions (location-based) by 69% on a like-for-like basis
when excluding our recently acquired businesses.
+ We are now able to estimate our full Scope 3 emissions
for the first time, and have received validation of our
near-term science-based targets.
+ Scope 3 carbon emissions
(CO
2
e tonnes)
Net zero by 2045 487, 220 477,042
+ Waste intensity (tn/£100k revenue) Year-on-year reduction 21.0 21.8
Communities
See p34 →
Making a positive impact in
communities where we operate by
delivering greater social value and
improving lives.
+ % of completed projects delivering
>25% Social and Local Economic
Value (SLEV) as a % of contract
value
>60% 50% 94% + A quantification of the economic and social value we
delivered to our communities in the year demonstrated
an 88% increase in the number of projects achieving the
target performance level.
+ We continued to achieve an above sector average
score from CCS which benchmarks our sites on their
local impact.
+ Considerate Constructors Scheme
(CCS) performance
>39
1
and
above industry
average
41.8
(industry
ave. 39.0)
43.4
(industry
ave. 40.0)
Deliver
high-quality
buildings and
infrastructure.
Clients
See p37 →
Delivering lower carbon, superior
buildings and infrastructure with a
better social footprint for clients in our
chosen markets through a focus on
innovation, digitalisation and quality.
+ % of repeat business in our order
book
>80% 94% 87% + We maintained a high level of repeat business,
demonstrating our continued levels of client satisfaction.
+ We have secured 92% of our work for the next financial
year giving us forward visibility and reinforcing our
selective approach to the contracts we pursue.
+ % of full year planned revenue
secured at the start of the financial
year
>85% 90% 92%
Supply chain
See p41 →
Aligning our supply chain with our
culture and creating collaborative
relationships that deliver best practice,
innovation and sustainable outcomes
for clients, communities and the
environment.
+ % of Business Unit core trades
spend with Aligned subcontractors
70%–80% 60% 58% + We have put significant effort into ensuring our processes
enable prompt payment, which since 2019 has resulted in
almost halving our average payment time from 49 to 26
days, and paying 98% of invoices within 60 days.
+ Prompt payment: % of
invoices paid within 60 days
>95% 98% 98%
2026 targets
Provide
sustainable
financial
returns.
Finance
See p45 →
Earning a sustainable return on the
value we deliver.
+ Focus on bottom line
margin growth
Divisional operating
margin growth to 3.0%
Divisional
operating
margin 2.4%
Divisional
operating
margin 2.4%
+ Strong performance across all operations delivering
increased revenue and profit.
+ Divisional operating margin of 2.4% (2022: 2.4%), with
increased confidence in our target margin of 3% by 2026.
+ Strong cash generation and well-capitalised debt-free
balance sheet.
+ Full year dividend of 10.5p up 31% (2022: 8.0p), based on
improved annual dividend policy.
+ Special dividend to shareholders of 12.0p per share,
as previously announced following resolution of a long
running dispute.
+ Disciplined contract selection and
sustainable revenue growth
Revenue growth
towards £1.6bn
Revenue
£1.2bn
Revenue
£1.4bn
+ Maintain strong balance sheet Operating cash
generation
Average
month-end
cash £174m
Average
month-end
cash £135m
+ Sustainable dividends Dividend cover
of 1.8x
Dividend cover
of 2.0x
Dividend cover
of 1.8x
1 During 2022, CCS changed their scoring methodology, meaning that the highest achievable score is now 50, if full innovation points are awarded.
As a result, we have increased our target to be greater than 39, which is the minimum score to achieve the ‘Excellent’ performance level.
Our Sustainable Growth Strategy continued
16
Strategic priority Objective KPI Ambition FY22 FY23 Progress
Champion
a people-
orientated
progressive
culture.
Health and safety
See p25 →
Prioritising health, safety and wellbeing
and ensuring no harm to anyone linked
with our operations.
+ Lost Time Frequency Rate (LTFR)
No harm 0.26 0.20 + Our health and safety performance remained relatively
stable. AFR rose slightly while LTFR, a broader measure
of safety, fell.
+ At the same time, 95% of employees said we give health
and safety high priority.
+ Accident Frequency Rate (AFR) No harm 0.06 0.09
Our people
See p27 →
Creating an inclusive environment and
progressive culture that enables all
individuals to reach their potential.
+ Employee advocacy score
>80% 85% 86% + Our employee advocacy score increased slightly this year.
It was also significantly higher than the sector benchmarks
at 71%.
+ Early careers as a % of total
employees
>8% 6.1% 6.3%
+ Women as a % of total employees Year-on-year increase 21.2% 21.6%
Operate
in a socially
responsible
way.
Environment and
climate change
See p31 →
Adopting sustainable resourcing and
consumption practices and taking
measures to mitigate carbon production
and climate change to protect our
environment and biodiversity.
+ Scope 1 and 2 carbon emissions
(CO
2
e tonnes)
Net zero by 2030 10,795 11,822 + Since 2012, we have reduced our Scope 1 and 2 carbon
emissions (location-based) by 69% on a like-for-like basis
when excluding our recently acquired businesses.
+ We are now able to estimate our full Scope 3 emissions
for the first time, and have received validation of our
near-term science-based targets.
+ Scope 3 carbon emissions
(CO
2
e tonnes)
Net zero by 2045 487, 220 477,042
+ Waste intensity (tn/£100k revenue) Year-on-year reduction 21.0 21.8
Communities
See p34 →
Making a positive impact in
communities where we operate by
delivering greater social value and
improving lives.
+ % of completed projects delivering
>25% Social and Local Economic
Value (SLEV) as a % of contract
value
>60% 50% 94% + A quantification of the economic and social value we
delivered to our communities in the year demonstrated
an 88% increase in the number of projects achieving the
target performance level.
+ We continued to achieve an above sector average
score from CCS which benchmarks our sites on their
local impact.
+ Considerate Constructors Scheme
(CCS) performance
>39
1
and
above industry
average
41.8
(industry
ave. 39.0)
43.4
(industry
ave. 40.0)
Deliver
high-quality
buildings and
infrastructure.
Clients
See p37 →
Delivering lower carbon, superior
buildings and infrastructure with a
better social footprint for clients in our
chosen markets through a focus on
innovation, digitalisation and quality.
+ % of repeat business in our order
book
>80% 94% 87% + We maintained a high level of repeat business,
demonstrating our continued levels of client satisfaction.
+ We have secured 92% of our work for the next financial
year giving us forward visibility and reinforcing our
selective approach to the contracts we pursue.
+ % of full year planned revenue
secured at the start of the financial
year
>85% 90% 92%
Supply chain
See p41 →
Aligning our supply chain with our
culture and creating collaborative
relationships that deliver best practice,
innovation and sustainable outcomes
for clients, communities and the
environment.
+ % of Business Unit core trades
spend with Aligned subcontractors
70%–80% 60% 58% + We have put significant effort into ensuring our processes
enable prompt payment, which since 2019 has resulted in
almost halving our average payment time from 49 to 26
days, and paying 98% of invoices within 60 days.
+ Prompt payment: % of
invoices paid within 60 days
>95% 98% 98%
2026 targets
Provide
sustainable
financial
returns.
Finance
See p45 →
Earning a sustainable return on the
value we deliver.
+ Focus on bottom line
margin growth
Divisional operating
margin growth to 3.0%
Divisional
operating
margin 2.4%
Divisional
operating
margin 2.4%
+ Strong performance across all operations delivering
increased revenue and profit.
+ Divisional operating margin of 2.4% (2022: 2.4%), with
increased confidence in our target margin of 3% by 2026.
+ Strong cash generation and well-capitalised debt-free
balance sheet.
+ Full year dividend of 10.5p up 31% (2022: 8.0p), based on
improved annual dividend policy.
+ Special dividend to shareholders of 12.0p per share,
as previously announced following resolution of a long
running dispute.
+ Disciplined contract selection and
sustainable revenue growth
Revenue growth
towards £1.6bn
Revenue
£1.2bn
Revenue
£1.4bn
+ Maintain strong balance sheet Operating cash
generation
Average
month-end
cash £174m
Average
month-end
cash £135m
+ Sustainable dividends Dividend cover
of 1.8x
Dividend cover
of 2.0x
Dividend cover
of 1.8x
1 During 2022, CCS changed their scoring methodology, meaning that the highest achievable score is now 50, if full innovation points are awarded.
As a result, we have increased our target to be greater than 39, which is the minimum score to achieve the ‘Excellent’ performance level.
Strategic report Governance Financial statements
gallifordtry.co.uk
17
Galliford Try Annual Report and Financial Statements 2023
Performance on track with
revenue and profit growth
We are pleased to report another excellent
set of results as we enter the defining period
of our Sustainable Growth Strategy to 2026.
Thanks to our people, our businesses are
performing well and we are doing what we
said we would do, consistently delivering
robust margins and revenue growth,
supported by a strong balance sheet,
excellent order book and good supply
chain and client relationships.
Revenue is up 12.6% from £1.2bn to
£1.4bn, our divisional operating margin
has remained robust at 2.4% despite the
macroeconomic challenges in the year,
and pre-exceptional profit before tax is up
7.9% to £20.6m. We have a high-quality
£3.7bn order book, in our chosen sectors,
which provides visibility and security of
future workloads.
Our strong position enabled us to carry out
the acquisitions of MCS Control Systems
and Ham Baker’s asset maintenance
operations in the financial year, supporting
our strategy to grow in adjacent markets
that complement our core offering. We have
successfully integrated these acquisitions
and we are starting to see the positive
impact of these specialist teams in our
Environment business and across significant
AMP8 opportunities.
Lookingforward
withconfidence
Bill Hocking
Chief Executive
The Group continues its strong performance and
progress on its Sustainable Growth Strategy of risk
managed controlled growth, supporting our financial
and non-financial targets to 2026.
Our Sustainable Growth Strategy continued
Chief Executive’s review
18
Across the business, we are seeing
preferred bidder positions, which were
delayed by inflation during 2022 converting
to contract award. Continuing to maintain
close engagement with our supply chain and
clients has helped us to successfully manage
and mitigate the risks of material shortages
and inflation, which are now subsiding.
As a result of the strong performance in the
financial year, we declared a final dividend
of 7.5p to give a full year dividend of 10.5p.
Financial review p45 →
Operating review p48 →
A progressive culture
Healthandsafety
Health and safety is the number one priority
for our business, with our commitment to
no harm leading the actions that we take to
keep each other safe every day. This was,
once again, highlighted in our employee
survey, where 95% of respondents stated
that we give health and safety high priority.
As part of our drive for no harm, we made
a concerted effort to tackle our LTFR (Lost
Time Frequency Rate), which measures
every incident that results in more than
a day away from work. We were pleased
this figure improved, falling from 0.26 to
0.20. At the same time, our AFR (Accident
Frequency Rate), which measures the
number of injuries resulting in more than
seven days away from work, rose to 0.09
from 0.06. While we take any decline in
safety performance seriously, this reaffirms
that we have a strong reporting culture
where people feel confident in their
ability to report incidents. As part of our
response, in March 2023, we created a new
position for a leader for our Challenging
Beliefs, Affecting Behaviour Programme to
reinvigorate our efforts to tackle accident
behaviour and link wider elements of the
business’ strategy such as wellbeing and
quality into the programme.
People
Attracting, developing and retaining
talented people is a cornerstone of our
strategy. During the year, we made
significant investment in our Employee
Value Proposition (EVP), acknowledging
the correlation between a strong EVP and
engaged employees. This included the
launch of our ‘Grow Together’ campaign,
which showcases the unique set of benefits
such as culture, compensation, career
development, work-life balance, stability
and location that our people receive in
return for their skills, capabilities and
experience. We also launched our internal
mobility programme, Explore, to ensure
we retain the talent we have built up by
enabling our people to move between roles
and locations within our organisation, rather
than seeking alternative employment to
meet their professional and personal needs.
We pride ourselves on being people-
orientated, progressive and inclusive, and,
we sought our first EDI (Equity, Diversity
and Inclusion) rating from Clear Assured.
In January 2023, we achieved Bronze
under this standard for our commitment to
embedding inclusive practices across our
organisation. We have set our sights on
improving this rating and have established
an inclusion team to lead on this.
Early careers remain a key part of
our long-term resource planning and
succession planning. We were pleased to
be voted number one Graduate Employer
in Construction and Civil Engineering,
and number two for apprentices in a list
compiled by TheJobCrowd, based on
employee feedback. We also received our
second Gold Award from The 5% Club’s
Employer Audit Scheme for our approach to
inclusion and social mobility.
In recognition of the increased costs of
living, we took early action and, in October
2022, we paid a one-off cost of living
payment of up to £750 to more than half
our employees and additionally became
early adopters of the new rate of Real
Living Wage.
As a testimony to our efforts, 86% of our
people would recommend Galliford Try as
an employer.
Strategy in action
Retaining talent
through
internal mobility
In a market where there is fierce
competition for talent, we want
to retain the skills and expertise
we have nurtured.
Our new ‘Explore’ programme
encourages and empowers employees
to review opportunities within our
Group should they wish for a change
in career, location, discipline or
working pattern. The programme
heavily advocates leadership support
for moves within the business
and features videos, guidance and
dedicated resource to support
managers and employees to take
advantage of the programme.
BenefitsofExploreinclude:
+ Retention of high-quality talent
that has been invested in and
already aligns to our culture.
+ Time and money savings on costs
otherwise incurred by recruitment
activities such as advertising and
managing applications.
+ Encouraging diversity by reskilling
people or reshaping pathways for
growth within the organisation,
including leadership.
+ Boosting employee morale by
supporting employees’ personal
circumstances.
+ Building our brand by increasing
employee satisfaction.
Strategic report Governance Financial statements
gallifordtry.co.uk
19
Galliford Try Annual Report and Financial Statements 2023
“ Our balance sheet strength and high-quality
order book continue to be differentiators
and put us in an excellent position as we look
forward to the new financial year”
Socially responsible delivery
Environmentandclimatechange
We champion the role we have to play
in decarbonising the environment for
a greener, more sustainable future and
reduced our Scope 1 and 2 emissions
by a further 5.6% on a like-for-like basis
excluding recent acquisitions, as a result
of a number of initiatives.
Having pledged to achieve net zero carbon
across our own operations by 2030 and
all activities by 2045, we performed a full
inventory of our Scope 3 emissions which
enabled us to set near-term emissions
reduction targets which have subsequently
been validated by the Science Based Targets
initiative (SBTi).
We participated in CDP, a global disclosure
system for organisations to manage their
environmental impacts, and, in our first
submission as a standalone construction
company, we achieved a climate change
score of ‘C’ for ‘Awareness Level’, which
provides a baseline against which we can
monitor progress.
We continue to invest in our capabilities to
support clients to deliver low and net zero
carbon projects and now have a team of 10
low carbon specialists across our business.
We have embedded our Net Zero Partners
programme, an initiative to collaborate
closely with our supply chain and design
consultants to help everyone in the industry
on their journeys to net zero carbon.
Communities
Delivering a legacy of positive social value
outcomes is increasingly important for
our clients and employees. This year, we
have delivered £328m in social and local
economic value by providing employment
for local people, procuring through local
supply chain, using local subcontractors, and
providing apprenticeships and training.
69%
Reduction in carbon
emissions since 2012
We have reduced our Scope 1 and Scope
2 carbon emissions by 69% on a like-for
like-basis, excluding acquisitions, since we
began carbon reporting in 2012.
See p31 →
Our Sustainable Growth Strategy continued
Chief Executive’s review
AshleyRoadEast(coverimage)
A residential-led mixed-use development of 183 units with ground floor
retail and office space in Tottenham for Related Argent. We are now
delivering a further £75m project for the same client in North London
as part of the Brent Cross Town regeneration.
20
We continue to take part in the Considerate
Constructors Scheme (CCS), which assesses
sites on their approach to communities, the
environment and workforce. We increased
our average CCS score to 43.4 out of 50,
which is above the industry average of 40.0.
Quality and innovation
Clients
Delivering excellence for our clients is
key to the long-term sustainability of our
business. Our approach is reflected by the
fact that 87% of our order book is repeat
business (2022: 94%) and we have already
secured 92% of our order book for FY24
(2022: 90%).
Delivering a high-quality product to our
clients is a fundamental plank of our
strategy and underpins our reputation
and client relationships. Our approach is
to embed quality and buildability into our
designs and to follow through into project
delivery and handover. This is supported
by Modern Methods of Construction, and
our BMS (Business Management System),
which contains the processes and templates
required to provide quality assurance at
every step of a project, irrespective of size
and complexity.
We are developing our digital tools and have
an entirely digitised approach to project
delivery, improving safety, quality and
collaboration, and driving down carbon.
Our increasing capability in supporting
clients to design, build and maintain low
carbon infrastructure and buildings is
recognised by our selection to be on two of
the working groups developing the UK Net
Zero Carbon Buildings Standard, a cross-
industry initiative which will provide a single
agreed definition and methodology for the
industry to determine what constitutes a net
zero carbon building.
We continue to drive innovation and
secured funding under the National
Highways Innovation and Modernisation
Designated Fund to trial an autonomous
roadworks compaction process which
could deliver significant outperformance
compared to traditional methods. We are
also collaborating in the first UK field trials
of a paint robot, supported by AI.
Supply chain
The majority of our work is delivered in
partnership with our supply chain so we
work with supply chain members who
are aligned to our culture and develop
collaborative relationships that improve
social, environmental and economic
outcomes. This is delivered through our
Advantage through Alignment (AtA)
programme and 58% of our core Aligned
trades spend is now with ‘Aligned’
subcontractors.
Training and education remain a key theme
beyond AtA, and we continue to offer our
CBAB and Net Zero Partners programme to
key supply chain members.
We are signatories of the Prompt Payment
Code, and pay 98.1% of invoices within 60
days (FY22: 97.6%), with the average days
to pay now 26 days. We are also making
progress against the additional metric of
paying 95% of invoices from suppliers with
fewer than 50 employees within 30 days.
We continue to retain Gold status from
the Supply Chain Sustainability School,
a collaboration designed to upskill its
members through free training and
resources covering sustainability, off-site
manufacturing, BIM, Lean and Management.
DrivingtheUKNetZero
CarbonBuildingsStandard
We are on two working groups developing
the UK Net Zero Carbon Buildings
Standard, which will provide a single
agreed definition and methodology for the
industry to determine what constitutes a
net zero carbon building.
Outlook
I am pleased with the Group’s performance,
as we make good progress against our
strategic objectives.
Our high-quality order book provides
visibility and security of future workloads.
Together with our excellent people and
our strong balance sheet, this gives us
confidence in our ability to deliver our
Sustainable Growth Strategy and continue
to provide long-term sustainable value for
our stakeholders.
I thank all our teams and supply chain
partners for their ongoing efforts in keeping
our projects safely on track and enabling us
to deliver a strong result.
Bill Hocking
Chief Executive
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21
Our Sustainable Growth Strategy continued
Operating sustainably
Sustainability is central to our strategy
Operating sustainably helps us to win work, engages our employees, benefits
communities and the environment, and makes us more efficient. This is why
ESG is an integral part of our strategy, and at the core of how we deliver
stakeholder value.
Stakeholder materiality assessment
We monitor our ESG practices and performance through a
robust structure and are committed to publicly reporting
our progress across six areas: health and safety, our people,
environment and climate change, communities, clients and
supply chain. When developing our Sustainable Growth Strategy
in 2021, we performed an assessment of the relative materiality
of sustainability priorities for different stakeholder groups across
these six pillars.
This comprised a series of workshops with our sustainability
pillar leads, who each have knowledge of their respective
subject matter and stakeholder groups, and other members of
the Senior Leadership Team including the Executive Board.
This assessment was reviewed and updated by the ESG Committee
in 2023. A summary of the priorities is outlined below and
guides our sustainability priorities and targets as detailed on
the following pages.
Key stakeholder groups
Sustainability pillars Priorities Clients Investors Employees Supply chain Communities Regulators
Health
and safety
Physical health and
safety
Mental health and
wellbeing
People
Diversity and inclusion
Human rights
Talent and development
Environment
and climate
change
Carbon emissions
Energy efficiency of
built assets
Waste
Water
Biodiversity
Noise and air quality
Communities
Employment
Economic growth
Disadvantaged or
underrepresented
groups
Community engagement
Clients
Innovation
and efficiency
Energy efficiency
of built assets
Supply
chain
Responsible sourcing
Prompt payment
Levelofrisk
High Moderate Low
Galliford Try Annual Report and Financial Statements 2023
22
Oversight of ESG
The Executive Board has overall
responsibility for setting policy
and monitoring our sustainability
performance.
Main plc Board oversight of sustainability
is maintained through our newly-
established Board-level ESG Committee
which is chaired by the Finance Director
and is comprised of the Director of
Risk and Sustainability and senior
representatives from our operating
divisions and Support Services.
The Committee is an amalgamation of our
former Carbon and Social Value Forum,
and Stakeholder Steering Committee,
which were combined given the overlap of
responsibilities and audiences.
Operatingsustainably
A progressive culture
25 Health and safety
27 Our people
Socially responsible delivery
31 Environment and climate change
34 Communities
Qualityandinnovation
37 Clients
41 Supply chain
43 Human rights and modern slavery
Sustainablefinancialreturns
45 Financial review
48 Operating review
Strategic report Governance Financial statements
23
gallifordtry.co.uk
Strategic report Governance Financial statements
Our Sustainable Growth Strategy continued
A progressive
culture
The right culture is key to achieving
our aspirations so we place great
importance on how we achieve that,
from prioritising the health, safety and
wellbeing of our people, to creating an
environment where they are enabled
to give their best
95%
of employees believe
we give health and
safety a high priority
(2022: 95%)
86%
of employees would
recommend us
as an employer
(2022: 85%)
24
Galliford Try Annual Report and Financial Statements 2023
Ambition: No harm
FY23 0.20
Lost Time Frequency Rate (LTFR)
FY22 0.26
FY21 0.26
FY23 0.09
Ambition: No harm
Accident Frequency Rate (AFR)
FY22 0.06
FY21 0.08
Health and safety
Our objective is to prioritise health, safety and wellbeing and ensure
no harm to anyone linked with our operations. We achieve this
through our behavioural safety programme Challenging Beliefs,
Affecting Behaviour and our wellbeing initiative, Be Well.
Performance in the year
+ Our LTFR improved as a result of a
decline in the number of total incidents.
+ Our AFR deteriorated due to a number of
RIDDOR reportable injuries.
+ In our employee survey, 95% of our
employees said we give health and safety
high priority.
+ We did not receive any prohibition or
improvement notices during the year.
We aspire to no harm, believing that nothing
we do is so important that we cannot
take the time to do it safely. For FY23, we
targeted the LTFR (Lost Time Frequency
Rate) which measures every incident that
results in more than a day away from work,
as an improvement area. This had remained
at 0.26 for a number of years. We were
pleased this figure improved, falling from
0.26 to 0.20. At the same time, our AFR
(Accident Frequency Rate), which measures
the number of injuries resulting in more
than seven days away from work or those
listed as RIDDOR specified, rose to 0.09
from 0.06.
While we were pleased to see the fall in the
number of incidents overall, we take any
increase in accident behaviour seriously and
have taken a number of steps to support
a downward trajectory of incidents as
detailed in this section.
Challenging Beliefs, Affecting
Behaviour
Our safety culture is embedded through
Challenging Beliefs, Affecting Behaviour
(CBAB), a programme based on awareness,
training, coaching and visible leadership,
which has formed the backbone of our
approach since its inception in 2012.
While our health and safety performance
continues to be industry-leading, analysis
of the increase in our AFR demonstrated
that we have the right processes in place,
and instead behaviours and mindsets are
influencing and increasing incident rates.
To help address this, we appointed a
new leader for our CBAB programme to
reinvigorate our efforts to tackle accident
behaviour in the short, medium and long
term. These efforts will integrate wider
elements of the business’s strategy such
as wellbeing and quality, which can
influence behaviour, into the programme.
This recognises the fact that post
pandemic, there are factors at play that
influence accident behaviour that are
not work-related.
Leading from the front
While accident frequency rates remain
the industry standard measure of safety
performance, internally, we use Lead
Indicators to drive improvement in safety
culture and behaviour as they enable a
proactive approach to the management
of health and safety. Our Lead Indicators
span six areas: leadership, communication,
competence, culture, contractors and
planning. These indicators were reviewed
at our Group HS&E Forum where senior
representatives from across the Group
agreed that the indicators were effective,
realistic and focused on the right areas.
Highlights from the period include:
+ An increase in the number of director
tours from 1,144 to 1,332 and an
increase in Safe Behaviour Discussions
from 60,019 to 65,281. These activities
provide visible leadership and an open
dialogue with our site teams and are
a powerful way for management to
promote and maintain safe behaviours
on site by engaging with operatives to
reaffirm positive behaviour.
+ Strong compliance with our Back to
Basics requirements which test that
we have the right person, planning,
equipment and workplace for each
activity.
+ 100% completion rate for SSERs (Site
and Safety Environmental Reviews),
which provide a comprehensive overview
of how each site is running.
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25
Our Sustainable Growth Strategy continued
Health and safety continued
Wellbeing
Our ‘Be Well’ programme takes the form
of wellbeing sessions hosted by a
psychologist, online health checks, advice
lines, discounts on gym memberships
and guides on how to improve wellbeing.
During the year, we commenced a refresh
of the programme to shine a spotlight on
the industry’s greatest challenges.
A highlight of Be Well was a panel
discussion co-hosted by three of our
regional managing directors, where they
discussed personal challenges they have
overcome, how it is important to normalise
talking about mental health, and how we
can support each other.
Focus areas during the year
The 2022/23 ‘Focus Areas’ extended to:
Inductions
We undertook a review of our induction
process to make it more impactful. A key
development was the adoption of ‘MSite’,
a digital workforce management solution.
Through the platform, all our employees,
those of our supply chain and visitors
to our sites and offices can complete an
online induction and assessments before
arrival on our sites, ensuring our workforce
understands our objectives, are qualified
to do the job they are tasked with, and
have received the correct and consistent
induction and training.
Plantminimumstandards
We carried out a review of our plant
minimum standards to enhance the in-built
safety features and ensure equipment
supports our carbon targets. This resulted
in the development of a new competency
assessment document for plant operators.
Occupationalhealth
We completed a review of occupational
health to treat health like safety and
focus on the elimination of hazards and
implementation of proactive controls.
Looking forward
Our focus for the next year will be to:
+ Develop our CBAB programme to ensure
it continues to engage our people and
subcontractors, and integrate areas such
as wellbeing and quality.
+ Create a CBAB Academy by upskilling a
selected group of individuals from within
our business.
+ Embed the use of MSite across our
organisation.
+ Promote the learnings from our
occupational health review including
new technological solutions.
98%
ofpeoplesaidthey
understand their role
in keeping their
colleaguessafe.
83%
ofpeoplebelievetheir
managergenuinelycares
about their wellbeing.
26
Galliford Try Annual Report and Financial Statements 2023
FY23 6.3%
Ambition: >8%
Early careers as a % of total employees
FY22 6.1%
FY21 7.2%
Ambition: YoY increase
FY23 21.6%
Women as a % of total employees
FY21 23.0%
FY22 21.2%
Ambition: >80%
FY23 86%
Employee advocacy
FY22 85%
Our people
Our objective is to create an inclusive environment
and progressive culture that enables all individuals
to reach their potential.
Performance in the year
Early careers
Early careers roles (apprentices, trainees
and graduates) remain a key area of focus
for both recruitment and retention as these
roles help us to grow our own talent, shape
our leaders and influence the diversity of
our future workforce.
+ We grew our early careers roles to 6.3%
of our workforce, from 6.1% in 2022.
+ We were voted the number one place
for graduates to work, and number two
for apprentices, in TheJobCrowd’s list of
Top Construction and Civil Engineering
Companies. In addition, Galliford Try
ranked 22nd for graduates and 24th for
apprentices across all sectors, out of
more than 600 UK companies.
+ In November 2022, we received our
second Gold Award through The 5%
Club’s Employer Audit Scheme for early
careers in recognition of the continued
development of our early careers ‘earn
and learn’ programmes.
Gender diversity
Attracting more women into our business
is key to accessing the skills we need and
promoting a more diverse culture.
+ For the reported year, the proportion of
females across Galliford Try was 21.6%
compared to 21.2% last year.
+ We were awarded Bronze for
embedding inclusive practices across
our organisation by The Clear Company,
which runs a globally recognised
standard for inclusion, for demonstrating
a cultural shift in recruitment and
retention practices.
+ We launched a Menopause Policy and
signed the Menopause Workplace Pledge
to reduce the risk of menopause being
a barrier for women as they navigate
health with career progression. Our
approach includes training for managers
and colleagues.
+ We established an inclusion team
to drive activity across EDI (Equity,
Diversity and Inclusion).
6.3%
ofourpopulationis
inearlycareersroles,
which enable us to grow
our own talent.
Nº1
WewerevotedBest
GraduateEmployer
inConstruction/Civil
Engineering and ranked
secondforapprentices
in the sector.
FY21 Not reported
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27
Our Sustainable Growth Strategy continued
Our people continued
1 Gender figures are based on employee
numbers at year-end.
2 Senior grades are defined as job grades A–D
which encompasses senior managers and
directors, excluding Board directors.
Gendersplitofmalesandfemalesacrossourbusinessat30June2023
Gender
1
Female Male
plc Board 4 3
Senior grades (A-D)
2
74 582
Total company including plc Board 846 3,076
GenderPayreporting
Gender pay is different to equal pay where
men and women are paid the same for the
same work.
The historic underrepresentation of women
in the industry means that our industry has
fewer females than others, and that fewer
females rise to senior positions. This is why
we target early careers as a way of improving
the diversity of our business, as well as the
gender pay gap.
+ Since 2020, we have reduced our mean
gender pay gap from 28.8% to 24.1%
and median gender pay gap from 32.2%
to 27.6%.
+ The proportion of males and females
across our business remained stable,
with 21.6% of our employees being
female.
+ There is a strong negative gender pay
gap in our early careers population,
meaning there are more females in
higher paid positions than males,
which will enable us to tackle the pay
gap as this group progresses into
more senior roles.
Key developments during
the year
EmployeeValueProposition(EVP)
Attracting, developing and retaining talent
is a cornerstone of our people strategy.
Over the last 18 months, we have ramped
up activities through significant investment
in our EVP. This comprised a campaign
called ‘Grow Together’ which showcases
the unique set of benefits – including
compensation, work-life balance, stability,
location and culture – that our people
receive in return for the skills, capabilities
and experience they bring to our company.
The EVP programme has delivered
support to our hiring managers in selling
our proposition as a business to potential
employees, including videos and interactive
toolkits that showcase our business. It also
includes our first social media advertising
campaign designed specifically to attract
untapped talent pools into our business.
Promotinganinclusiveenvironment
In July 2022, we signed up to The Clear
Company’s Clear Assured scheme to assess
the areas of our business that influence
24.1%
Wehavereducedourmean
genderpaygapfrom28.8%
to24.1%since2020.
-9.6%
Agenderpaygapof-9.6%
in our early careers roles
will help narrow the gender
paygapasthispopulation
progresses to senior roles.
Employeeadvocacy
Employee advocacy is a powerful indicator
of how engaged employees are, measuring
how likely they are to recommend our
business.
+ In our 2023 employee survey, we
achieved an employee advocacy score
of 86% compared to a sector average of
71%. Our employee engagement score,
which is made up of a number of factors
including motivation, commitment to our
vision and pride in the company, was also
above the sector average at 74%.
+ We had a response rate of 75%, which
provides a representative view from
employees, and confirms to our business
that we are on the right path.
diversity including recruitment processes,
commitment to flexible working and
inclusive working environments.
Having achieved Bronze standard in January
2023, we continue to work with The Clear
Company to develop our approach to
EDI to identify and remove barriers from
recruitment and retention practices which
have the potential to exclude under-
represented groups including disabled,
ethnic and LGBTQ+ candidates across the
employee lifecycle. This exercise is focused
on areas where we have the opportunity to
make the most significant impact including
more focused EDI education and awareness
and has included the appointment of an
inclusion lead to head up our inclusion team.
We continue to use our EDI series to put a
spotlight on different communities across
the UK through blogs and interviews.
The series aims to break down barriers by
educating people about the experiences
of individuals, sharing commonalities and
celebrating differences. It has included
experiences of being gay in the construction
industry, profiling women as role models,
using Black History Month to challenge
negative stereotypes, and giving insights
into religious and cultural festivals.
We continue to promote our agile working
practices, which are attractive to people
with different needs and support inclusion,
offering flexibility to suit individual needs
including staggered start and finish times,
job shares, compressed hours, sabbaticals
and return to work programmes as well as
remote working.
ERPlaunch
In September 2023, we launched ‘Orbit’,
our new cloud-based Enterprise Resource
Planning (ERP) system. Orbit will drive
efficiency by joining up processes across
for our people, pre-construction, commercial,
finance and procurement processes. The new
system is data and insight driven, supporting
informed decision-making and has been
designed to empower employees and
decision-makers.
Investing in systems such as Orbit enables
us to continuously improve and optimise
our processes ensuring we have a modern
solution that is fit for the future.
28
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.
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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.
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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
Emissionssource 2022 2021
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 report Governance Financial statements
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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.
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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
innovation, digitalisation and quality.
Performance in the year
Our performance is driven by understanding
client priorities, building trusted
relationships, providing technical expertise
to solve client challenges and delivering
high-quality buildings and infrastructure.
Our progress towards this is measured by
our KPIs which show that:
+ We continue to have a strong pipeline
of secured work in our chosen markets,
with 92% of FY24 revenue already
secured.
+ 87% of the work in our order book is
repeat business, with clients whom
we know and have built collaborative,
long-term relationships with, based
on a track record of delivering a
high-quality product.
Strategy in action
Digital innovation
We have created an entirely digitised
approach to project delivery using
the latest technologies and industry
standards.
We have invested in innovative
technologies to improve quality and
deliver efficiency and productivity
improvements across the project
lifecycle.
For example, our Environment
business has partnered with Siemens
to accelerate the integration of digital
technologies across the lifecycle of
water and wastewater projects. These
tools aim to solve a range of challenges,
such as the ability to identify potential
blockages in sewer networks, improve
operational efficiency of treatment
works and become a net zero industry.
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37
Examplesofourframeworkpositionsandforwardvisibilitybeyond2026
Strategic partnering through frameworks
Our focus on delivering quality outcomes and building trusted relationships with our clients is reflected by the fact that 82% of our order
book is in frameworks. Frameworks are a vehicle for the public and regulated sectors to procure projects in a collaborative manner, forming
long-term relationships, improving quality and creating efficiencies.
Securing positions on frameworks is our preferred route to market as it provides us with greater certainty and the ability to act more
strategically. Key benefits include:
+ Aligned objectives with acceptable risk.
+ Established and well-understood terms and conditions with
predictable behaviour.
+ Transfer of knowledge from project to project.
+ Reduction in the time and cost of repeat bidding.
+ Creates an environment for continuous improvement.
+ Enables the development of long-term strategic relationships.
+ Provides long-term visibility of opportunity pipeline.
Our Sustainable Growth Strategy continued
Clients continued
Highways
Environment
Defence
& Custodial
Education
Health
FM
Commercial
& other
Midlands Highways Alliance + Midlands Highways Alliance +
YORcivil 2
YORcivil 3
National Highways RDP National Highways IDF
National Highways Pavement Delivery Framework
National Highways Scheme Delivery Framework
AMP7 AMP8
Scottish Water Investment Programme Alliance
Crown Commercial Services Crown Commercial Services
MOJ frameworks
Defence Estate Optimisation Portfolio
DfE Construction Framework DfE Construction Framework
Scottish Hub Programme
DFE Learning Alliance
NHSE ProCure22+
NHSE ProCure23 NHSE
ProCure24
Various Local Authorities and Crown Commercial Services
Crown Commercial Services Crown Commercial Services
Constructing West Midlands Constructing West Midlands
Procure Partnerships
Southern Construction Framework
2023 2024 2025 2026 2027 202 8
38
Galliford Try Annual Report and Financial Statements 2023
Progress in the year
Lowcarbonconstructioncapability
Our ability to support clients in achieving
their carbon reduction objectives, and
demonstrate how together we can meet the
Government strategy for net zero carbon,
alongside our own net zero commitment by
2045 is key to our success.
We continue to invest in the people,
processes and technology necessary to
design and construct low carbon buildings
and infrastructure. Some of the key
developments during the year include:
+ Expanding our use of carbon calculator
tools to measure embodied carbon and
modelling design interventions to reduce
embodied carbon.
+ Recruiting a team of Low Carbon
Construction Managers, in addition to our
Low Carbon Leads, to upskill and provide
specialist support to our project teams.
+ Commencing the journey to achieve
the PAS 2080 Carbon Management in
Buildings and Infrastructure Standard.
UKNetZeroCarbonBuildingsStandard
We have been selected to contribute to the
development of the UK Net Zero Carbon
Buildings Standard. The presence of our
teams in these working groups ensures we
are at the forefront to support our clients
to design, build and maintain low carbon
infrastructure and buildings.
The UK Net Zero Carbon Buildings Standard
is a cross-industry initiative which will
provide a single agreed definition and
methodology for the industry to determine
what constitutes a net zero carbon building.
Looking forward
Some of the key areas of focus over
the next year include:
+ Continued presence on frameworks.
+ Assessment of frameworks against the
Gold Standard report.
+ Measurement of embodied carbon.
Strategy in action
Underpinning building safety through quality
GallifordTrybecameoneofthe
firstcontractorstobeawarded
BuildingaSaferFutureChampion
status. The accolade is awarded to
companiesfollowinganassessment
oftheirleadership,cultureandquality
managementaroundbuildingsafety
withactionabledata.
Building a Safer Future was established
to raise standards in construction and
promote cultural change in the built
environment. Galliford Try is a signatory
to its charter which helps companies
develop continuous improvement plans
to advance their approach to building
safer through a focus on quality.
“ I want to congratulate the companies
achieving Building a Safer Future
Champion status...You can take real
pride in the leadership you are showing
in committing to a journey of continuous
improvement in building safety. You
have taken meaningful action instead
of waiting for regulations to change,
which should encourage many more
organisations in the industry to follow
the excellent example you are setting.”
Steve Elliott, Non-Executive Chair
of Building a Safer Future
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39
Our Sustainable Growth Strategy continued
Clients continued
Strategy in action
Net zero operational carbon building for
the National Manufacturing Institute Scotland
Wedeliveredanewflagshipresearch
anddevelopmentfacilityforNational
ManufacturingInstituteScotland,
partoftheUniversityofStrathclyde.
Thefacilityisahubforindustry,
academiaandthepublictocollaborate
onground-breakingresearch,transform
productivitylevelsandboosttheskills
ofScotland’sworkforce.
Leading the way in sustainable design, the
facility features clean and innovative low
carbon solutions to mitigate its impact on
the environment and make it a great place
to work, learn and collaborate.
The 11,500 sq m structure is
operationally carbon neutral in design,
allowing for the facility to minimise its
impact on the environment. The building
has achieved BREEAM ‘Outstanding’
for sustainability – the highest accolade
possible – by utilising many sustainable
initiatives and systems.
Features include:
+ An Ambient Water Loop and Water
Source Heat Pumps supplied by a
nearby wastewater treatment facility
to provide low carbon heating and hot
water for the facility.
+ Over 1,600 solar panels to provide
power for the facility.
+ A demand control system for air-
handling units based on monitoring
carbon dioxide levels and adjustment
of fan motor speed.
+ A lighting control system which utilises
Bluetooth to allow the lighting to
be programmed through a tablet or
phone.
+ A rainwater harvesting system which
stores and pumps rainwater into the
building to be utilised to flush toilets.
Controlling all these is an advanced
Building Management System which
monitors the building performance and
provides reports on the energy use
across the facility.
40
Galliford Try Annual Report and Financial Statements 2023
FY23 58%
Ambition: 70-80%
% of business unit core trades spend
with Aligned subcontractors
FY22 60%
FY21 59%
Ambition: >95%
FY23 98%
Prompt payment: % of invoices paid
within 60 days
FY22 98%
FY21 93%
Supply chain
Our objective is to align our supply chain with our culture and create
collaborative relationships that deliver best practice, innovation and
sustainable outcomes for clients, communities and the environment.
Performance in the year
Aligned subcontractors
We continue to focus on developing
collaborative, long-term relationships
with our supply chain partners through
our Advantage through Alignment (AtA)
programme. AtA is designed to enable
deep collaboration and provide support
to Aligned subcontractors through training
and education, by sharing our working
practices, values and our vision and by
giving access to our behavioural safety
programme, Challenging Beliefs, Affecting
Behaviour, BIM training and Continuing
Professional Development.
During the year, our core trades spend
with Aligned subcontractors remained
stable at 58%.
Promptpayment
As a signatory of the Prompt Payment
Code, we are committed to paying 95% of
supply chain invoices within 60 days. We
maintained an excellent performance in
terms of how quickly we pay our suppliers,
with 98.1% now paid within 60 days (FY22:
97.6%) and the average days to pay is now
26 days. This places us in the top quarter
of the sector, according to BuildUK’s report
of its 123 largest construction industry
members. We are also making progress
against the additional metric of paying 95%
of invoices from suppliers with fewer than
50 employees within 30 days, with 88%
now paid within 30 days (FY22: 84%).
PPErecyclingscheme
An example of the power of collaboration
with our supply chain is the Personal
Protective Equipment (PPE) and packaging
recycling scheme we operate with the help
of our safety, welfare and site equipment
supplier, OnSite Support. We have already
collected approximately 350kg of PPE
comprising hard hats, high-visibility vests
and jackets and diverted this away from
landfill. As well as avoiding unnecessary
landfill, the recycled material is transformed
into products such as insulation.
Strategy in action
Adopting
low carbon steel
We have opted to use Electric Arc
Furnace (EAF) steel on all future
Scottish educational projects,
assisting clients to achieve their
embodied carbon targets.
The move has come as a direct
result of our Net Zero Partners
programme, which focuses on
two-way education and information
sharing to achieve net zero.
The manufacturing method of EAF
steel significantly reduces the use of
fossil fuels over Blast Furnace Basic
Oxygen Furnace by using electrical
processes and utilising higher
percentages of recycled content.
Up to a 77% saving on
carbon can be created
compared to EAF’s
traditional counterpart.
Strategic report Governance Financial statements
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41
Our Sustainable Growth Strategy continued
Supply chain continued
Progress in the year
Upskilling our supply chain
We continue to retain Gold status from
the Supply Chain Sustainability School, an
initiative designed to upskill its members
through free training and resources. During
the year, and as part of AtA, we developed
learning pathways to help our supply chain
partners upskill their teams.
The ‘Energy and Carbon’ pathway consists
of three 45 minute e-learning sessions
which will see all participants taking the first
steps towards making decisions around their
own carbon strategy and understand what
is required to work with Galliford Try on our
journey to net zero through introductory,
intermediate and advanced sessions.
The pathway was launched in April 2023
and to date 46 partners have taken part.
Strategy in action
Low carbon alternatives on temporary and remote sites
It can be challenging to reduce carbon
andfuelontemporaryandremote
constructionsitesduetolackofaccess
tomainspower.
Our Infrastructure team commissioned
temporary site accommodation supplier
Algeco to undertake a trial on a satellite
set-up, with the aim of reducing fuel,
carbon dioxide and cost.
The solution uses a combination of
innovative smart technology and
sustainable solutions including smart
energy controls, smart power sockets,
solar roof panels, hybrid generator,
Hydrotreated Vegetable Oil fuel, climate
control and recycled/reusable temporary
foundations to use on the compound.
As a result of the collaboration, the
team was able to completely avoid the
use of diesel on this site for a period of
13 weeks.
Drivinginnovationand
emergingtechnologies
We continue to work collaboratively with
our supply chain partners to identify
opportunities to deploy new technology to
drive innovation and efficiency. Examples
of some of the innovative technologies we
have deployed during the year include:
+ The first UK field trials of an AI-
supported paint robot, designed to work
in partnership with humans.
+ A research project with National
Highways to deploy a semi-autonomous
roller, designed to improve safety by
removing people from work zones,
deliver productivity and efficiency
improvements, and reduce carbon
emissions.
+ The latest generator technology, working
in conjunction with battery storage
units, to improve the efficiency of site
electricity generation and reduce carbon
emissions.
Looking forward
Some of the key areas of focus over the next
year include:
+ Embedding our Net Zero Partners
programme and further supporting our
supply chain to remove the main barriers
to implementation for a first generational
net zero carbon supply chain, supporting
the industry on its net zero journey.
+ Upgrading our on-boarding platform to
further enhance the checks we carry out
on our subcontractors.
+ Working with our site accommodation
suppliers to further improve the
efficiency of our site accommodation.
42
Galliford Try Annual Report and Financial Statements 2023
Human rights and modern slavery
We are committed to upholding human rights and we take steps to prevent slavery and
human trafficking from taking place in our business and supply chain.
We support all UK legislation for human rights, recognising modern slavery and human
trafficking to be the most significant human rights risks to UK construction businesses.
Action and performance
Since the Modern Slavery Act came into force, we have run
awareness campaigns comprising posters, videos and educational
material aimed at helping people to recognise the typical signs of
modern slavery.
We ask suppliers of equipment and materials to our businesses
to consider the risk of modern slavery and to ensure that there is
no slavery or trafficking in their supply chain. We reviewed our
statement to ensure its effectiveness again this year.
Our widely available independent and confidential whistleblowing
procedure encourages employees and third parties to raise
concerns.
Anti-bribery and corruption
Policyandmanagement
Every three years, all employees must complete an online course
regarding the Bribery Act, which is also a topic covered in employee
inductions.
Twice a year, every Business Unit managing director and head
of support function is required to sign a declaration to the Chief
Executive that their respective teams are aware of the policy and
the Code of Conduct, comply with their contents, and that any
issues have been reported.
Performance
No material issues were reported or identified.
Non-financialandsustainabilityinformationstatementandnon-financialkeyperformanceindicators
The information required to be included in our non-financial and sustainability information statement, under sections 414CA
and 414CB of the Companies Act 2006, can be found in the following places in the Strategic report:
Area Key policies – available on our website
Furtherinformationonrelatedrisks,
KPIsandperformance
Employees Health and Safety Policy Statement Pages 24 to 29
Employee Wellbeing Policy
Flexible Working Policy
Maternity Leave Policy
Paternity Leave Policy
Adoption Leave Policy
Shared Parental Leave (Birth) Policy
Shared Parental Leave (Adoption) Policy
Environmentalmattersand
climate-relatedmatters
includingTCFDdisclosures
Energy Policy Pages 30 to 33 and 57 to 68
Environmental Policy Statement
Responsible Sourcing Policy
Sustainability Policy
Biodiversity Policy
Carbon reduction Plan
Humanrights Modern Slavery Statement Page 43
Socialmatters Code of Conduct – Doing the Right Thing Page 43
Anti-briberyandcorruption Policy and Guidance on the Prevention of Corruption and Fraud Page 43
Tax strategy
Corporate Criminal Offences Policy
Businessmodel n/a Pages 4 to 5
Principalrisks Risk Management Policy Pages 52 to 56
Ensuring human rights
Strategic report Governance Financial statements
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43
Sustainable
financialreturns
This cornerstone of our Sustainable
Growth Strategy revolves around
delivering strong, predictable cash flows
and margin improvement and generating
increasing sustainable returns.
Our Sustainable Growth Strategy continued
44
Galliford Try Annual Report and Financial Statements 2023
Financial review
Delivering
sustainable growth
Andrew Duxbury
Finance Director
We have delivered another year of growth
in line with our strategy and expectations,
resulting in a further increase in dividends to
shareholders. The ongoing improvement in our
operating performance, alongside our strong
financial position and high-quality order book,
provide increasing confidence in our ability to
meet our sustainable growth targets to 2026.
Performance
1,2
We have delivered an increase in revenue,
operating profit and dividends, for the
third consecutive year. Importantly, in a
financial year that was characterised by
macroeconomic challenges, our operating
profit margin remained robust in line with
our margin improvement targets.
Financial
performance
1,2
£1,394m
Revenue
(2022: £1,237m)
£135m
Average month-end cash
(2022: £174m)
£44.6m
PPP portfolio
(2022: £47.5m)
2.4%
Divisional operating margin
1,2
(2022: 2.4%)
10.5p
Full year dividend per share
(2022: 8.0p)
£19.1m
Operating profit before
amortisation
2
(2022: £18.5)
£20.6m
Profit before tax
2
(2022: £19.1m)
£10.1m
Statutory profit before tax
(2022: £5.4m)
1 See note 32 for a reconciliation of statutory
numbers to Alternative Performance Measures.
2 Pre-exceptional items unless otherwise stated.
Strategic report Governance Financial statements
gallifordtry.co.uk
45
Revenue
Revenue for the year was up 12.6% at
£1,393.7m (2022: £1,237.2m), reflecting
particular growth in Infrastructure as we
benefited from increased AMP7 spending
and the first full year of trading following
our acquisition of the water business of
nmcn plc (in administration). In line with
our strategic targets, we continue to see
opportunities for further revenue growth
across all of our key markets.
Of the total, Building contributed revenue
of £797.1m (2022: £789.1), broadly in line
with 2022 as a result of some delays to
new contract starts through calendar year
2022, initially due to the increased length
of client procurement in response to rising
inflation and later due to delays in public
sector decision making. These delays have
now eased and the resulting contract
awards provide excellent visibility into the
new financial year. Infrastructure recorded
revenue of £590.8m (2022: £441.9m), with
substantial growth in Environment as noted
above. PPP Investments’ revenue was
£5.8m (2022: £6.2m).
Operatingprofitbeforeamortisation
Our pre-exceptional operating profit before
amortisation, excluding a one-off contract
settlement (see below), was £21.9m (2022:
£18.5m), including the profit on disposal of
our interest in a joint venture arrangement.
Of this, Building generated profit of £18.5m
(2022: £18.9m), representing a margin
of 2.3% (2022: 2.4%), and Infrastructure
generated profit of £14.5m (2022: £10.8m),
representing a margin of 2.5% (2022: 2.4%).
The combined divisional operating margin of
2.4% (2022: 2.4%) has been achieved in line
with our margin improvement targets, with
further details of divisional performance set
out on pages 48 to 51.
There was an £11.1m net pre-exceptional
operating expense in aggregate between
PPP Investments and Central Costs (2022:
£11.2m). PPP Investments includes the
£3.6m profit on disposal of an interest in
a joint venture entity during the period.
Central Costs were higher than 2022
reflecting increased share-based payment
costs and some timing differences. We
anticipate Central Costs reducing in 2024.
This margin performance was delivered
against a backdrop of macroeconomic
challenges in 2022, including inflation,
materials shortages and rising interest rates,
and also after allowing for a £1.1m cost of
living payment in Autumn 2022 and £2.3m
costs associated with two acquisitions in
the year. The robust margin performance
provides confidence against delivery of our
2026 financial targets.
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.
Exceptionalitems
Exceptional items of £10.5m were incurred
in the year (2022: £13.7m), as set out in
note 4 to the financial statements related to
our investment in cloud-based Enterprise
Resource Planning (ERP) finance and
commercial systems. These systems went
into operation in summer 2023, and are
part of our investment in our digital and
data capabilities, which under updated
accounting guidance, is not allowed to
be capitalised. The exceptional items in
2022 related to the ERP investment (£6.0m)
and the acquisition of the nmcn water
business (£7.7m).
Netinterestincome
Net interest income of £4.5m is higher than
2022 (£2.9m), reflecting the stable portfolio
of PPP sub-debt investments and increased
interest received on our cash deposits as a
result of improved interest rates.
Profitbeforetax
Pre-exceptional profit before tax for the
year was £20.6m (2022: £19.1m) and
excluding the £2.8m contract settlement
write-off previously announced was
£23.4m. Pre-exceptional profit before
income tax is an alternative performance
measure and a key metric we use to monitor
our performance in years with exceptional
or one-off items, such as 2023.
Post-exceptional profit before tax was
£10.1m (2021: £5.4m).
Taxation
The pre-exceptional tax charge for the year
is £3.1m (2022: £1.7m), which equates to
an effective tax rate of 15.1% (2022: 8.9%).
In previous years our tax rate was lower
than the standard UK rate of corporation
tax due to the recognition of previously
unrecognised brought forward tax losses
and corporate interest restrictions and,
as expected, our rate is now normalising
toward the standard corporation tax rate.
The rate is lower in 2023 due primarily to
non-taxable income. The post-exceptional
tax charge is £1.0m (2022: credit of £0.9m).
We have a constructive and open
relationship with HMRC, and look to comply
with both the letter and spirit of relevant
regulations and to pay our fair share of tax.
Our tax strategy is available on our website
at www.gallifordtry.co.uk.
Earnings and dividends per share
We recorded pre-exceptional earnings per
share for the year of 16.6p (2022: 16.0p), or
18.9p excluding the one-off special contract
settlement). The post-exceptional earnings
per share in 2023 was 8.7p (2022: 5.8p).
The Board declared an interim dividend of
3.0p per share (2022: 2.2p), which was paid
to shareholders on 14 April 2023.
The Board has proposed a final dividend
of 7.5p per share (2022: 5.8p), bringing
the total dividend for the financial year to
10.5p per share (2022: 8.0p). The full year
dividend in 2023 is covered 1.8 times (2022:
2.0 times) by pre-exceptional earnings,
excluding the one-off contract settlement,
in line with the Board’s updated policy.
In its announcement on 8 June 2023
following settlement of its long-standing
dispute, referred to above, the Group
announced that the Board had decided to
declare a Special Dividend of 12 pence per
share, payable following publication of the
Group’s results for the financial year ending
“ The Board is committed to maintaining a strong
balance sheet, which provides the Group with
competitive advantage in its market and supports
our growth strategy”
Our Sustainable Growth Strategy continued
Financial review continued
46
Galliford Try Annual Report and Financial Statements 2023
30 June 2023. 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.
At 30 June 2023, the Company had
distributable reserves of £115m (2022:
£109.7m).
Financial position
Our strong balance sheet, supported by
a robust cash performance and valuable
PPP assets, is important for our clients;
provides confidence to our supply chain;
and continues to provide a strong underpin
for our future plans.
Cashandinvestments
The Group is well-capitalised, maintaining a
clear focus on disciplined cash management.
We have no debt or defined benefit pension
obligations, and at 30 June 2023 had a cash
balance of £220.2m (2022. £218.9m). The
Group operates with daily net cash, with
average month-end cash balance in the year
of £135m (2022: £174m). This demonstrates
continued robust cash performance
throughout the year, with the reduction
compared to the prior year reflecting recent
acquisitions, our investment in cloud-based
digital systems, some delays to new contract
starts, and in excess of £20m of dividends
and capital returns in the year.
We continue to be proud of our
collaborative and open approach with all our
supply chain and our performance under the
Prompt Payment Code remained excellent,
with 98% of invoices paid within 60 days
(2022: 98%) and average days to pay
invoices of 26 days (2022: 25 days).
At 30 June 2023, we had a PPP portfolio
of £44.6m (2022: £47.5m). This reflects a
blended 7.3% discount rate (2022: 7.0%),
the increase attributable to changes in
UK gilt rates. This portfolio contributes to
our balance sheet strength and generated
interest income of £3.9m (2022: £3.9m) in
the year.
Working capital
We have modest working capital
requirements. At 30 June 2023, net working
capital employed was £268.5m (30 June
2022: £255.5m)
Total equity at the year-end was £118.6m
(2022: £132.1m).
Capitalallocationanddividends
The Board is committed to maintaining a
strong balance sheet, which provides the
Group with competitive advantage in its
market and supports our growth strategy.
Our capital allocation priorities are:
Strong balance sheet to support
operations
A strong balance sheet is an important
element in delivering the Group’s
Sustainable Growth Strategy, as it provides
a competitive advantage in the market,
supports the Group’s disciplined approach,
and provides confidence to our clients and
supply chain. The current outlook across our
markets remains encouraging and supports
our strategy. However, the Group also
ensures that it is prepared for any adverse
change in market conditions that may arise.
Our strong balance sheet is particularly
important for the Group to continue to
operate its disciplined approach to contract
selection and focus on operating margin,
irrespective of any short-term economic
concerns. The inflationary pressures which
are now subsiding, clearly demonstrate the
value and importance of the Group’s risk
management framework and focus.
Invest in the business
We are able to allocate capital to assist the
development of our adjacent markets, as
demonstrated by our acquisitions during
the year, of the water businesses of MCS
Control Systems and Ham Baker. Our
strong balance sheet enables the Group
to react quickly to strategic opportunities,
including bolt-on acquisitions that enhance
our capabilities and increase value, and to
continue to invest in enablers of growth
such as digital capabilities.
Payingsustainabledividendsto
shareholders
The Board understands the importance of
dividends to shareholders, and in setting its
dividend, considers the Group’s profitability,
its strong balance sheet, high-quality
order book and longer term prospects.
Consistent with this approach the Group
expects dividend per share to increase in
line with earnings as the business grows.
The Board’s confidence in the outlook
has led to an improved dividend policy,
of earnings covering the dividend by 1.8
times. Alongside dividend growth from our
operational performance, this improvement
reflects the low-risk nature of the PPP asset
portfolio and its annuity interest income,
and provides a sustainable increase in
dividend to shareholders while retaining
capital to invest in growing the business.
Returning excess cash
We continue to assess the cash
requirements of the business to ensure the
Group remains well positioned to deliver
on its Sustainable Growth Strategy and has
sufficient funds to invest in the business.
As previously announced, where average
month-end cash and PPP assets increase
above the level required, the Board will
consider making additional returns to
shareholders.
In line with this approach, in June 2023
the Board declared a special dividend to be
paid in October 2023, and in September
2022 the Group announced an initial share
buyback programme to repurchase up
to £15m of ordinary shares of 50 pence
per share. The Board is satisfied with the
progress of this buyback programme, with
a total of 7,985,696 shares purchased and
cancelled as at 15 September 2023, at a
total cost of £14.1m.
Contingentliabilities
The directors ensure that contingent
liabilities are appropriately assessed,
documented and monitored. More
information can be found in note 28.
GoingconcernandViabilityStatement
Our going concern statement, together
with further related information, can be
found in the Directors’ report on page 117.
Our Viability Statement can be found on
page 69.
Critical accounting policies
and assumptions
Our principal accounting policies are set
out in note one to the financial statements,
together with a description of the key
estimates and judgments affecting the
application of those policies and amounts
reported in the financial statements.
We use alternative financial performance
indicators to monitor our performance,
alongside standard measures, which are
designed to be useful to investors by
providing a balanced view of our operations.
An explanation of these measures and
reconciliations to the corresponding
statutory measures are included in note 32.
Andrew Duxbury
Finance Director
Strategic report Governance Financial statements
gallifordtry.co.uk
47
A strong performance
Building(whichincludesourFMbusiness)
hadarevenueof£797.1m(2022:
£789.1m),generatinganoperatingprofit
beforeamortisationof£18.5m(2022:
£18.9m),whichrepresentsamarginof
2.3%(2022:2.4%).
2023 2022
Revenue (£m) 797.1 789.1
Operating profit (£m)
1
18.5 18.9
Operating profit margin (%)
1
2.3 2.4
Order book (£m) 2,249 2,047
1 See note 32 for a reconciliation of statutory numbers to Alternative Performance Measures.
Performance
Building
Revenue is in line with the previous
year as a result of some delays to new
contracts towards the end of the financial
year, reflecting increased length of client
procurement in response to rising inflation
and some public sector delays. The
margin change reflects the challenging
macroeconomic conditions through 2022,
and we remain on track for our 2026 targets.
Our FM business continues to complement
our operations by providing high-quality
building maintenance services. We continue
to grow the capabilities of this operation,
with a specific focus on decarbonising
existing buildings through retrofit and other
interventions.
Building won contracts and positions on
frameworks worth over £999m, (2022:
£945m). Significant appointments and wins
for Building included the £5.1bn Defence
Estate Optimisation Portfolio; the £4.5bn
Southern Construction Framework; the
£2.5bn Ministry of Justice Constructor
Services Framework; Brent Cross residential
project; the £72m remodelling and
refurbishment of Adelaide House in central
London; a £95m contract to deliver a new
custodial facility at HMP Rye Hill; and a
new £65m contract to build an industrial
facility for JDR Cable Systems in Blyth,
Northumberland.
Building’s order book stands at £2,249m,
compared to £2,047m last year including
25% in Education, 30% in Defence and
Custodial, 15% in Facilities Management
and 5% in Health.
Our Sustainable Growth Strategy continued
Operating review
We delivered another strong set of results during the
financial year, with good performance in our core businesses
of Building, Infrastructure and PPP Investments.
Strategy in action
Collaborating for excellence
The £61m Winchburgh Schools Campus
is West Lothian Council’s largest
investment in education comprising:
+ Two 660-place secondary schools.
+ A 231-place primary school.
+ A sports and wellbeing hub.
Pivotal to the success of the Winchburgh
Schools project was a culture of
collaboration developed over a series of
projects which immediately preceded
the Winchburgh campus.
Quality was given the same prominence
as safety, cost and programme, and
embedded into the design and delivery
processes, with reinforcement at various
checkpoints.
The project provided £22m of social and
local economic value for the community
of Winchburgh.
“ A great example of how a large-scale
construction project should work...
the outcome is absolutely tremendous.”
Lawrence Fitzpatrick,
Council Leader West Lothian Council
Galliford Try Annual Report and Financial Statements 2023
48
A
B
C
D
E
£2.2bn
£m %
Building
Procurement
route
A
B
C
D
A
B
Infrastructure
£m %
£1.5bn
FY23FY22FY21
£3.3bn £3.4bn
91%91%
9%
£3.7bn
13%
87%
Private
Public and regulated
9%
FY26FY25FY24
£1.4bn £1.2bn
£0.8bn
Strategy in action
Building a high-quality order book
Ourorderbookunderpinsourfutureplansandgivesusexcellentmediumtermvisibility
ofpipeline,meaningthatnopartofthebusinessneedstotakeoninappropriatelevelsofrisk.
Our confidence in the quality of the order book comes from the following.
+ Our focus on core sectors increases
our understanding of contract risk, our
ability to put appropriate mitigations
in place, and our ability to successfully
deliver quality projects.
+ We actively target and maintain places
on public sector frameworks in the UK
as they help mitigate risk by enabling
us to work within established and
well-understood terms and conditions
and provide consistent pipelines of
work (page 38).
+ At 30 June 2023, 82% of our order
book was in frameworks (2022: 90%).
+ Similarly, our focus on the public and
regulated sectors helps mitigate risk
by working with repeat clients on
a relationship basis, and provides a
strong pipeline of future opportunities.
+ At 30 June 2023, 87% of our order
book was in the public and regulated
sectors (2022: 91%), and 13% in
the private sector (2022: 9%) with
carefully selected blue-chip clients.
+ High visibility of the following year’s
revenue gives us further confidence to
bid with the appropriate discipline and
selectivity.
+ At 30 June 2023, 92% of planned
revenue for the 2024 financial year
was secured (2022: 90%).
+ At 30 June 2023, the average contract
size in Building’s order book is less
than £20m.
Strong visibility of workload
Orderbookbysector Orderbookprocurementroute
Orderbookbyclienttype OrderbookbyFY(£bn)excFM
£m
A Education 555
B Defence & custodial 685
C Facilities Management 339
D Health 120
E Commercial & other 550
Total £2.2bn
%
A Single-stage 1.5
B Two-stage 29.5
C Negotiated 8.5
D Target/cost plus 60.5
£m
A Environment 838
B Highways 626
Total £1.5bn
Strategic report Governance Financial statements
gallifordtry.co.uk
49
2023 2022
Revenue (£m) 590.8 441.9
Operating profit (£m) excluding contract settlement
1
14.5 10.8
Operating profit margin (%)
1
2.5 2.4
Order book (£m) 1,464 1,396
1 See note 32 for a reconciliation of statutory numbers to Alternative Performance Measures.
Performance
Infrastructure
Infrastructure’srevenuewas£590.8m
(2022:£441.9m).Asexpected,revenue
increasedduetothehigherlevelof
activityfromtheAMP7programmein
thewatersectorandthefullyearimpact
fromtheacquiredwateroperationsof
nmcnplc(inadministration).
Our Sustainable Growth Strategy continued
Operating review continued
Infrastructure generated an operating
profit before amortisation of £14.5m (2022:
£10.8m) which represents a margin of 2.5%
(2022: 2.4%).
The improved profit performance is in line
with our expectations, and includes the
benefit of new contract frameworks.
Infrastructure won contracts and positions
on frameworks worth £659m (2022: £466m).
These include the £600m Southern Water
AMP8 Framework and two frameworks
for Welsh Water, representing the first
capital maintenance framework wins for the
Environment business since the acquisition
of nmcn water; the £140m Carlisle Southern
Link Road and the £81m Melton Mowbray
distributor road.
Infrastructure division had an order book of
£1,464m, compared to £1,396m last year,
including £626m for clients in the Highways
sector and £838m in the Environment
sector.
In June 2023, we restructured our
Environment business to provide enhanced
service delivery across our operations
including water, engineering, off-site build
and asset optimisation, and to reflect the
acquisitions of nmcn in 2021, MCS Control
Systems Limited in July 2022 and Ham Baker
Engineering in November 2022 (note 30).
The new structure will support the business
to meet growing demand in the water sector
over the next decade.
Our Highways business was also
restructured to focus on three streams
comprising National Highways, Local
Authorities and Major Projects.
Strategy in action
Five ways Keadby Pumping Station
enhances the environment and biodiversity
+ Flood control: by efficiently regulating
water levels, the station helps prevent
flooding, safeguarding homes,
farmland, and vital infrastructure.
+ Improved agriculture: the pumping
station plays a crucial role in land
drainage, reducing waterlogging in the
area. This boon for farmers enhances
agricultural productivity, ensuring
healthier crops and happier livestock.
+ Water resource management: the
project efficiently channels excess
water into the River Trent which
promotes sustainable water usage
and helps maintain ecological balance
in the region.
+ Ecosystem preservation: careful
water level control contributes to the
preservation of local ecosystems and
habitats ensuring the wellbeing of
diverse plant and animal species.
+ Embedded carbon savings: the
scheme reduced carbon emissions by
90% by procuring pre-used piles that
avoided new manufacture.
The project won Large Project of the
Year at the Institution of Civil Engineers’
2022 Sustainability Awards.
50
Galliford Try Annual Report and Financial Statements 2023
50
2023 2022
Revenue (£m) 5.8 6.2
Operating profit/(loss) (£m) 1.4 (0.9)
Net interest income (£m) 3.8 3.9
Directors’ valuation (£m) 44.6 47. 5
Performance
PPPInvestments
Asoutlinedinour2022AnnualReport,
withthereductionintraditional
PPP/PFIbiddingopportunities,PPP
Investmentshascontinuedtomove
itsfocustowardsco-developmentof
PrivateRentedSector(PRS)projects.
The Group achieved contract completion
on its first PRS development scheme in
August 2023. The project will see the
creation of 272 one and two-bedroom
apartments in a 30-storey tower, close to
the centre of Cardiff.
At the year end it was the preferred
bidder on three further PRS schemes with
a combined gross development value of
c250m and anticipates further opportunities
in the future.
At the year end, the directors’ valuation
of our PPP portfolio was £44.6m (2022:
£47.5m), which is the fair value included
in the balance sheet reflecting a blended
discount rate of 7.3% (2022: 7.0%). The
valuation compared with a value invested of
£35.2m (2022: £35.7m). There is an active
secondary market for these assets, which
generated an annuity interest income of
£3.9m (2022: £3.9m) and contributes to our
balance sheet strength.
Strategic report Governance Financial statements
gallifordtry.co.uk
51
Risk management
Effective risk management
Our ability to identify, assess and manage risks and uncertainties
is one of the key enablers to delivering our Sustainable Growth
Strategy. It is vital that we understand the potential risks associated
with every project opportunity and ensure that we only bid for
projects that align to our risk appetite and our ability to manage
the risks. We must also be able to identify and manage the risks
associated with operating in a dynamic external environment.
Our embedded culture of risk awareness has been particularly
important to enable the business to mitigate the macroeconomic
challenges of the last financial year, such as high inflation. It also
helps us identify and monitor the development of emerging risks,
including the potential impact of climate change – both the
physical risks and the risks associated with the transition to a
low carbon economy.
Our approach to managing risk is structured, pragmatic and
targeted, with key risk mitigation measures embedded into
management processes and activities. These include:
+ A Business Management
System with processes and
procedures designed to give
us control and confidence in
commercial decisions.
+ Project level controls and
management oversight of
project forecasts.
+ Monthly cross-disciplinary
contract review meetings on
all projects.
+ Standardised formats for
monitoring and reporting
project performance and
forecasts.
+ Comprehensive commercial
training.
+ A programme of commercial
‘health checks’ to provide an
independent assessment of
the project team’s reported
project performance and
forecast outturn.
These activities are supported by a governance structure that
provides oversight of key risks from the plc Board through to
individual projects.
AuditCommittee
+ Responsible for keeping
under review the adequacy
and effectiveness of our risk
management processes and systems
of internal control.
+ Responsible for reviewing and
approving statements included
in the Annual Report concerning
internal controls, risk management
and the Viability Statement.
Risk and Internal Audit
Facilitates the identification, reporting
and management of risk throughout the
governance structure.
Provides a risk update, including the
updated principal and emerging risks,
to the Executive Board and the plc
Board at least three times a year.
Our principal risks are presented on pages 54 to 56.
Our risk management process
The Group’s risk management and
governance structure is designed
to facilitate both a bottom-up and
top-down view of principal and
emerging risks and is summarised
in the diagram opposite.
plcBoard
Has overall responsibility for setting the
risk appetite of the business and maintaining
oversight of our processes for identifying,
assessing, managing and reporting on
principal risks.
Reviews principal and emerging risks
at least three times a year.
ExecutiveBoard
Responsible for implementing the strategy
and risk appetite set by the Board and
ensuring that appropriate risk management
and internal control procedures are
embedded in our day-to-day operations.
Reviews principal and emerging risks
at least three times a year.
ExecutiveRiskCommittee
Chaired by the General Counsel & Company
Secretary and comprises the Finance
Director, Director of Risk and Sustainability,
and a representative from each of Building,
Infrastructure and Specialist Services.
Meets three times a year to review and
update principal and emerging risks, based on
the risks reported up from the Business Units,
and to consider any emerging risks that
may have an impact on the business in
the longer term.
BusinessUnitBoards
Maintain a Business Unit risk register that
records the key risks applicable to that
business, key mitigations and further actions
required to manage the risk.
Risk registers are reviewed twice a year,
with one of the reviews facilitated by the
Risk and Internal Audit team.
Projectteams
Create a project Risk and Opportunity
Register at the bid stage and maintain it
throughout the lifecycle of the project.
Review the risk and opportunities at
key checkpoints and as part of the
monthly contract review meetings.
52
Galliford Try Annual Report and Financial Statements 2023
Principal risks
At a Group level, the Board monitors risk using the following four
principal risks, a detailed analysis of which is provided below:
❶ Work winning
❷Projectdelivery
❸ Resources
❹Regulatorycompliance
This approach facilitates a targeted focus on the most significant
risks and the actions being taken to manage them.
At an individual Business Unit level, our risk management process
captures and monitors risks and mitigations using more detailed risk
themes aligned to the four principal risks so that we can take more
targeted actions to address issues that are specific to the regions
and sectors in which they operate.
Work winning
Riskdescription
We fail to secure an appropriate pipeline
of projects to achieve our revenue and
profitability targets.
Key risk indicators
+ Percentageofplanned
revenue secured.
+ Percentageoforderbook
inframeworks.
+ Orderbookbyclienttype.
+ Percentageofrepeatbusiness
withexistingclients.
Linktoourstrategicpriorities
Quality and innovation.
Sustainable financial returns.
Riskappetite Currentriskenvironment Mitigations
We aim to secure a forward order book
that provides a high degree of certainty of
current year and following year revenue,
while reflecting appropriate margin, cash
and risk attributes.
Maintaining discipline in the projects that
we take on is a fundamental element of our
internal control framework. We will only
accept projects where we are confident
that we have the experience, knowledge
and supply chain to deliver effectively
and where the client relationships and
commercial terms support a collaborative
approach to managing risk.
Potentialcausesofrisk
+ A significant and sustained reduction
in Government investment in building
and infrastructure projects reduces the
opportunity pipeline.
+ Increased costs make some schemes
economically unviable leading to delays
or cancellation of projects.
+ Delays to and/or reduced levels of
private sector investment due to macro-
economic conditions.
+ Failure to secure positions on key
procurement frameworks.
+ Failure to meet the increasing
sustainability expectations of our clients.
+ Poor quality bid submissions.
+ Failure to maintain discipline in project
selection.
+ Insufficient resources to support bid
preparation.
+ Pipeline in our chosen markets remains strong, supported by
Government policy on infrastructure spending.
+ Inflation and higher interest rates mean that some client
budgets need to be increased which makes it more challenging
to move from preferred bidder to agreeing contract values,
which in turn results in delays to project starts.
+ The long-term transition to low carbon buildings and
infrastructure is creating market opportunity – net zero new
builds and energy-efficient refurbishments and retrofits.
+ The Building Safety Act introduces additional regulatory
requirements which increases compliance risk and therefore
may deter some private sector developers and investors.
Emergingrisks
+ With a UK General Election due in 2024, there is a risk of a
short-term hiatus in decision-making in central Government
departments which could result in delays to project starts or
new projects not coming the market.
+ We innovate or adopt new technologies too early, incurring
costs associated with being an early adopter, or too late, losing
market share.
+ Client attitudes to sustainability shift at differing rates, leaving
some clients focused on construction cost and others on
whole-life cost and carbon performance.
+ Changes to planning policy and regulations to deliver the UK’s
net zero ambition limit the ability of our clients to pursue new
build construction schemes.
+ We manage the potential impact of an
economic downturn by building a high-
quality order book with projects that meet
our strict risk profile.
+ We concentrate on sectors where we
have core strengths and clients with long-
term growth and profitability potential.
+ We focus on securing positions on key
procurement frameworks (page 38) and
repeat business with key clients through
a centralised, dedicated pre-construction
team. This allows for strategic planning,
better collaboration and reduced risk of
project failure.
+ Each time we bid for a contract, we
follow our internal “heat map” process,
identifying risks across a range of criteria
including the client and their advisors,
project location and our local supply
chain, our technical experience, our
internal resources and capacity, the
procurement method, contractual terms
and conditions, and price.
+ All contracts over £25m in value, or
which have a heightened risk indicator on
any other measure, are reviewed by the
Executive Board prior to approval to bid.
We typically target lower-risk contract
types.
+ We carry out peer reviews of bids where
relevant to ensure robust review and
challenge of risks and assumptions and
to promote knowledge sharing across the
business.
+ Adjacent markets strategy, including
PRS and the recent acquisitions in our
Environment business, expand our target
markets in a risk-managed way.
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53
Project delivery
Riskdescription
We fail to deliver projects safely, on time,
in agreement with contractual terms,
or to a high quality for our clients.
Key risk indicators
+ RIDDORandAFRscores.
+ Safetyleadingindicators
(egDirectorSafetyTours,
SafeBehaviourDiscussions).
+ Forecastprojectmargins.
Linktoourstrategicpriorities
Progressive culture.
Socially responsible delivery.
Quality and innovation.
Sustainable financial returns.
Riskappetite Currentriskenvironment Mitigations
We prioritise health and safety above
everything else and believe that nothing is
so important that we cannot take the time
to do it safely.
We will not tolerate poor quality and
strive to deliver high-quality buildings and
infrastructure for our clients that provide
safe environments for the occupiers and
users of the assets.
We aim to provide realistic and transparent
forecasts of project performance with
potential risks to programme and margins
identified and addressed before they
materialise.
Potentialcausesofrisk
+ Changing regulations.
+ Non-compliance with health and
safety regulations and/or poor safety
behaviours.
+ Programme delays and cost escalation.
+ Poor control of client and subcontractor
variations and claims processes.
+ Contractual notices not given as per
contract requirements.
+ Poor record-keeping and document
management.
+ Poor design quality and/or co-ordination.
+ Failure to comply with quality control
procedures.
+ Extended periods of adverse weather
conditions.
+ Poor subcontractor performance
and/or insolvency.
+ Unrealistic estimates, including cost to
complete, inflation estimates, outcomes
of disputes and final value included in
project forecasts.
+ Material unavailability and extended
lead times.
+ Interest rate rises causing investment
and cashflow issues within the
supply chain.
+ Health and safety remains our first priority and our Lead
Indicators approach is now established in the business.
+ Staff shortages and cost of living pressures increase the sense
of workers feeling stretched which could impact on safety and
wellbeing.
+ High levels of recruitment to support strategic growth plans
require a greater focus on employee onboarding and training.
+ Although we have experienced periods of extreme heat and
intense rainfall, they have not resulted in a significant or
widespread impact on our operations.
+ There continues to be the potential for external factors, such
as the war in Ukraine, to have an indirect and unpredictable
impact on our supply chain in the future.
Emergingrisks
+ We fail to adapt our processes to meet the requirements of our
clients to have better and more reliable data about the assets
we design and build for them.
+ The country fails to learn from the Covid-19 pandemic and any
potential future global pandemic, or indeed other supply-side
shocks, have a significant impact on the construction industry.
+ Building designs and construction methodologies fail to adapt
to the physical effects of climate change, including more
regular and more extreme weather events, leading to reduced
productivity, programme delays and cost overruns.
+ Materials availability will become more challenging when
demand from the housebuilding sector returns to normal levels.
+ We continued to reinforce our
behavioural safety programme
Challenging Beliefs, Affecting Behaviour,
and use Lead Indicators which target no
harm.
+ We take a values-driven approach
to project delivery focusing on close
collaboration and client satisfaction to
achieve end goals for both parties.
+ We undertake robust review and approval
of contractual terms, pre-contract to
ensure we do not sign up to contracts
with onerous terms. This includes the
employment of margin thresholds and
escalation to the Board of any contracts
that do not meet our criteria.
+ We apply rigorous quality control in our
BMS policies and procedures and adopt
digitalisation to improve data, quality and
efficiency.
+ We carry out due diligence to select
competent designers and subcontractors
and use specialist consultants at key
review stages.
+ We provide comprehensive commercial
training.
+ We have introduced standardised formats
for monitoring and reporting project
performance and forecasts.
+ We undertake monthly cross-disciplinary
contract review meetings on all projects
to enable a robust assessment of
programme status, risks and commercial
forecasts and are investing in upgrading
our existing ERP systems.
+ We carry out a programme of commercial
‘health checks’ to provide an independent
assessment of the project team’s reported
project performance and forecast outturn.
+ Operational controls including health and
safety site risk assessments are monitored
through a regular audit process.
+ Our Technical and Business Support
Forums drive process improvements
across health and safety, digitalisation,
carbon reduction, procurement, design
management, mechanical and electrical,
and commercial activities.
+ Escalation processes respond promptly
and appropriately to incidents.
Risk management continued
Principal risks
54
Galliford Try Annual Report and Financial Statements 2023
Resources
Riskdescription
We fail to secure the right people
and other resources necessary to deliver
our projects and manage our business.
Key risk indicators
+ Materialandtradeshortages.
+ Voluntarystaffchurnrate.
+ Timetohire.
+ PromptPaymentCode
performancestatistics.
+ Averagemonth-endcash.
+ Subcontractorsnotpayingstaff
andsupplierspromptly.
Linktoourstrategicpriorities
Progressive culture.
Socially responsible delivery.
Quality and innovation.
Sustainable financial returns.
Riskappetite Currentriskenvironment Mitigations
We aim to recruit employees from a diverse
talent pool who are aligned to our values
and behaviours.
We seek to work with financially resilient
subcontractors, suppliers and joint venture
partners who share our values in relation to
safety, quality and sustainability.
Potentialcausesofrisk
+ We are unable to attract, retain and/or
develop the right staff to meet our future
needs, or we mismatch our staffing levels
to peaks and troughs in activity or lack
diversity.
+ Lack of capacity in the supply chain
due to high levels of activity in the
construction sector.
+ Subcontractor and/or client insolvency.
+ Failure to comply with fair payment
practices.
+ Lack of geographical coverage.
+ Material cost inflation reduced over the year as demand/
supply imbalances and energy prices have fallen. However we
continue to take sensible measures to manage material cost
inflation (early procurement, supply chain engagement, risk
allowances in tenders etc).
+ Lead times for bulk items like steel and bricks are now more
predictable and shorter than in 2022 and are factored into
our programmes and procurement planning. However, we are
still experiencing occasional short-notice delays, cancellations
or incomplete deliveries which can cause some disruption to
programmes.
+ Subcontractor insolvency is an increasing risk. We manage
this by being selective in who we work with, monitoring our
exposure and ensuring we pay our suppliers promptly.
+ It remains a competitive market for talent. Large infrastructure
schemes and a mismatch between skilled worker supply and
demand continues to drive up salaries and increases the risk
of employees leaving for higher reward packages. We have
developed our ‘Grow Together’ campaign to outline our
employee value proposition as part of the broader ‘retain and
gain’ people strategy.
+ We continue to support our people to achieve their career
objectives and ambitions and provide them with opportunities
for progression. We actively promote opportunities for internal
mobility through our Explore programme.
+ The results of our employee survey indicate that we have high
levels of engagement and satisfaction within our employees
and we continue to improve the way we promote the business
and develop our employee offering.
+ We continue our focus on health, safety and wellbeing.
+ Strong balance sheet and net cash position gives confidence
to clients and allows us to continually improve our prompt
payment performance.
Emergingrisks
+ There is a generational shortage of skills as more experienced
staff retire and are not replaced in sufficient numbers because
the construction sector cannot compete with other sectors in
attracting talent.
+ Innovations in the use of technology will require us to attract
a workforce with a different set of skills.
+ Depletion or increased scarcity of non-renewable materials
may lead to greater volatility in prices and more regular
disruption to supply.
+ The drive towards net zero construction may lead to an
increased risk of defects and quality issues as we start to
use new, low carbon materials whose long-term performance
is unproven.
+ Availability of lower carbon materials will become more
challenging as more main contractors look to secure the
same resources.
+ The Group has an established HR strategy
based on best practice principles and
relevant legislation which, among other
things, includes the regular review of
remuneration and benefits packages to
ensure we remain competitive.
+ Our succession planning and talent
management processes, together with
our internal mobility programme, enable
continuity and identification of future
leaders.
+ We operate graduate, trainee and
apprenticeship programmes to develop
our own pipeline of talent.
+ We develop long-term relationships
with key suppliers and subcontractors to
ensure that we remain a priority customer
when resources and materials are in short
supply.
+ Our Advantage through Alignment
programme facilitates greater
engagement with our key supply chain
members and provides them with greater
visibility of our pipeline of projects.
+ We are committed to paying 95% of
supply chain invoices within 60 days,
and achieving the new standards of the
Prompt Payment Code.
+ We carry out enhanced supply chain
checks and monitor subcontractor
financial performance and reputational
risks.
+ Each Business Unit reviews its cash
forecast weekly and monthly, and the
Group prepares a detailed daily cash book
forecast for the following eight-week
period to highlight any risk of intra-
month fluctuations. These forecasts are
reviewed at Business Unit, division and
Group level.
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55
Regulatory compliance
Riskdescription
We fail to comply with requirements of
the various legal and regulatory regimes in
which we operate, resulting in a high-profile
breach and regulatory censure.
Key risk indicators
+ Numberofexternal
enforcementcases.
Linktoourstrategicpriorities
Socially responsible delivery.
Quality and innovation.
Sustainable financial returns.
Riskappetite Currentriskenvironment Mitigations
We have zero tolerance for non-compliance
with regulations. We expect all employees
and subcontractors to be aware of all
regulations relevant to their role and to
comply at all times. We also expect our
people to speak up if they observe or
suspect non-compliance.
Potentialcausesofrisk
+ Failure to update our procedures to
reflect changes to key legislation and
regulations.
+ Failure to provide sufficient and effective
training to all staff.
+ Failure to implement effective
compliance monitoring processes.
+ The Building Safety Act is new legislation that provides greater
clarity on the requirements and responsibilities in relation to
building safety and should drive greater quality in construction.
+ However, the Act also has the potential for adverse
consequences in relation to the extended period in which
certain defect claims can be made, which increases the risk of
opportunistic claims being brought forward.
+ We continue to invest in cyber security surveillance tools,
recognising the potential risk of cyber-attacks, especially
linked to the conflict in Ukraine, and the wider geo-political
environment.
+ The regulatory landscape in relation to ESG reporting is
evolving quickly and will require us to monitor and publish
more information and comply with new standards (ie ISSB).
Emergingrisks
+ Greater devolution or even full independence may lead to very
different regulatory regimes in Scotland and the rest of the UK.
+ New legislation to combat climate change, such as carbon taxes
or a ban on the use of diesel could have a significant impact on
our operations.
+ Biodiversity and water use regulations may become more
stringent and result in increased compliance costs.
+ The new Corporate Governance regime will introduce greater
responsibility for directors, and the requirement for enhanced
disclosures in relation to internal controls, fraud, resilience and
audit and assurance arrangements, with increased costs of
compliance.
+ Galliford Try has comprehensive policies
and guidance at every level including
our Code of Conduct, mandatory
regulatory and cyber security e-learning
for all employees, an anonymous and
independent whistleblowing helpline,
regular legal updates and briefings,
six-monthly compliance declarations,
and conflict of interest registers and
authorisations.
+ The Ethics and Compliance Committee,
provides ongoing monitoring and
oversight of policy and compliance
activity in relation to key areas of
legislation.
+ We continue to review the detail of the
Building Safety Act and are preparing
through training, continued investment in
digital tools to support quality.
+ Our information security standards and
procedures are accredited to the ISO
27001 standard.
Risk management continued
Principal risks
Galliford Try Annual Report and Financial Statements 2023
56
Accelerating
ouractionon
climatechange
We are taking action to ensure that
our business continues to adapt and
thrive in a changing climate.
Task Force on Climate-related Financial Disclosures
(TCFD)
The built environment is responsible for
around 40% of global carbon emissions,
therefore as a business operating in the
construction sector, we have a responsibility
to play our part in reducing emissions. We
have reduced the carbon emissions within
our own operations by 69% since 2012 and
have set ambitious targets to achieve net
zero in our operations by 2030 and across
our value chain by 2045 (pages 31 to 33).
In accordance with LR 9.8.6B, in assessing
our compliance with the recommendations
of the TCFD, we have taken into account
the guidance for all sectors in section C of
the 2021 version of the TCFD guidance
‘Implementing the Recommendations of
the Task Force on Climate-related Financial
Disclosures’. We have also reviewed the
other guidance documents referred to in
LR 9.8.6C, and as we have published net
zero targets, we have particularly focused
on the TCFD guidance on metrics, targets
and transition plans. Based on this guidance,
we have made disclosures that are aligned
with the TCFD core element areas of
Governance, Strategy, Risk Management
and Metrics and Targets and comply
with the 11 specific recommended
disclosures, with the exception of the
following recommendations where we
are partially compliant:
+ Strategy recommendation b – we have
not disclosed quantitative assessment
of the potential financial impacts of the
risks and opportunities identified see
Financial Impact section on page 61.
+ Metrics and Targets recommendations
a and c – while we have expanded
the range of climate-related metrics
and targets disclosed, further work is
required to develop additional metrics
and targets that are more closely
aligned to the climate-related risks and
opportunities we have identified. See
Metrics and Targets section on page 62.
This year’s TCFD disclosures reflect our
increasing focus on climate change and
some of the key developments during the
year, including:
+ Obtaining validation of our near-term
science based target from the SBTi,
creating an important interim milestone
on our journey to net zero.
+ Developing our understanding and
articulation of the opportunities that
climate change mitigation and adaptation
is creating in our target markets.
+ Expanding our use of recognised climate
scenarios to evaluate the resilience
of our strategy and related risks and
opportunities.
+ Introducing cross-industry metrics and
targets to enhance our monitoring of
climate-related risks and opportunities.
+ We have assessed the requirements
of the Companies (Strategic Report)
(Climate-related Financial Disclosure)
Regulations 2022 and consider the
disclosures we have made in relation to
TCFD to address these requirements.
Climate change considerations are
embedded into our existing governance and
risk management framework. Therefore
to avoid duplication, the key disclosures in
relation to the 11 TCFD recommendations
are included in the relevant sections of the
Annual Report, as indicated in the table
overleaf. In this section, we have provided
information on the disclosures that are not
addressed in other sections.
Strategic report Governance Financial statements
57
gallifordtry.co.uk
Strategic report Governance Financial statements
TCFD pillar Recommended disclosure How we addressed the disclosure
Governance
Disclose the
organisation’s
governance around
climate-related risks
and opportunities.
a. Describe the Board’s oversight of
climate-related risks and opportunities.
Governance of climate-related risks and opportunities is embedded
into our business-as-usual governance and risk management
processes and structures. This approach allows us to assess climate-
related risks and opportunities in the context of the broader risk
environment and develop pragmatic responses that are aligned with
our overall Sustainable Growth Strategy.
During the year, the plc and Executive Boards reviewed the detailed
assessments of climate-related risks and opportunities performed by
the Executive Risk Committee.
For further information on management’s role in assessing risk,
please refer to our Risk Governance framework outlined on page 52
and broader Governance framework outlined on page 78.
b. Describe management’s
role in assessing and managing
climate-related risks and opportunities.
Strategy
Disclose the actual
and potential
impacts of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy,
and financial
planning where
such information is
material.
a. Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
See ‘Our climate-related risks and opportunities’ sections on pages
63 to 68.
b. Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
‘Environment and Climate Change’ is part of the ‘Socially responsible
delivery’ cornerstone of our Sustainable Growth Strategy. See
Market review on pages 10 to 13 and our Sustainable Growth
Strategy on pages 14 to 17. See also ‘Managing climate-related risks’
on page 59 and ‘Financial Impact’ on page 61.
c. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
We have performed a qualitative analysis of the effect of different
climate scenarios on our climate-related risks and opportunities. See
pages 59 to 60 for an explanation of the approach we have taken
and pages 63 to 68 for our summary conclusions for each risk and
opportunity.
Risk management
Disclose how
the organisation
identifies, assesses,
and manages climate-
related risks.
a. Describe the organisation’s processes
for identifying and assessing climate-
related risks.
The identification, assessment and management of climate-related
risks and opportunities is embedded within our broader risk
management structure and processes.
For further information on our risk management process, please
refer to the Principal risks section on page 52 to 56.
b. Describe the organisation’s processes
for managing climate-related risks.
See ‘Managing climate-related risks’ on page 59.
c. Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated
into the organisation’s overall risk
management.
Climate-related risks are considered as cross-cutting risks that can
have an impact on a number of the principal risk themes we monitor
at a Business Unit and Group level, such as work-winning or project
delivery. This is the same approach we have taken to other cross-
cutting risks including Brexit and Covid. For further information
on our risk management process, please refer to the Principal risks
section on pages 52 to 56.
Metrics and targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-
related risks and
opportunities where
such information is
material.
a. Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
See ‘Metrics and Targets’ section on page 62.
b. Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
In 2022, we achieved a 5.6% reduction in our scope 1 and 2 GHG
emissions compared to 2021 (on a like-for-like basis). We also
performed a full Scope 3 foot printing exercise for the first time.
More detailed information on our GHG emissions performance and
net zero targets are included in the Environment and climate change
section on pages 31 to 33.
c. Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets.
See ‘Metrics and Targets’ section on page 62.
Task Force on Climate-related Financial Disclosures (TCFD) continued
58
Galliford Try Annual Report and Financial Statements 2023
Our climate-related risks and
opportunities
We continue to monitor our key climate-
related risks and opportunities along
with our principal and emerging risks, a
process that is overseen by the Executive
Risk Committee, which meets three
times a year. The March meeting of the
Committee focuses on climate-related risks
and opportunities with the key output
being a summary of the key climate-
related risks and opportunities which is
reviewed by the Executive Board and plc
Board. The Executive Risk Committee
uses the Primary Climate Related Risk
and Opportunity Drivers within the
CDP framework to identify the risks and
opportunities that are most relevant to
our sector, business model and strategy.
Given the inherent uncertainty in relation
to the financial impact of each risk and
opportunity, the Executive Risk Committee
assesses materiality based on a qualitative
assessment of the nature of the risk and
opportunity and how fundamental it is
to achieving our strategic objectives. The
most significant risks and opportunities are
summarised on pages 63 to 68.
Climate-related risks are also considered
during the Business Unit risk review
process. The approach we take at a
Business Unit level is to treat climate
change as a cross-cutting risk that can have
an impact on a number of the principal
risk themes we monitor in the Business
Unit risk registers, such as work winning or
project delivery. This is the same approach
we have taken to other cross-cutting risks
including Brexit and Covid. Business Units
are required to review and update their risk
register twice a year.
Managing climate-related risks
The climate-related risks we face are
managed through our existing strategic
and operational management processes.
For example, the risk and opportunity
created by the increased carbon reduction
requirements and expectations of clients
is one of the key drivers of our Sustainable
Growth Strategy. This is supported by
operational responses, led by the Executive
Board, to deliver the strategy. These
responses include investment in new
carbon reduction roles, creation of cross-
disciplinary working groups, development
of new processes and tools, and upskilling
our own people and our supply chain.
Climate scenario analysis
We have developed three scenarios that
are broadly defined by the pace and extent
of climate change mitigation and the
associated impact on the physical effects of
climate change.
In developing our scenarios, we have used
the UK Shared Socioeconomic Pathways
(UK SSPs), that have been developed by
the UK Climate Resilience Programme
and are aligned to the global SSPs used
by the IPCC in their sixth Assessment
Report. We have used SSPs as the basis
for our scenario analysis because they are
grounded in the socioeconomic context
in which Government policy and market
responses to climate change will emerge
and therefore are particularly relevant to
assessing transition risks and opportunities.
This context includes important socio-
economic drivers such as economic
development, demography, public attitudes
and international relations.
The UK SSPs are particularly relevant to our
business model because in addition to being
developed in the context of the UK, they
factor in considerations in relation to future
investments in sectors where we have a
strategic focus, including infrastructure,
health, education and green technology.
The SSPs have been supplemented with
Representative Concentration Pathways
(RCP) scenarios that are consistent with
each SSP and provide a recognised
framework for assessing the potential
physical impacts of climate change under
different scenarios. The key features of each
scenario are summarised in the table on
page 60.
Inassessingthelikelytimelinewhenrisksandopportunitieswillbeginto
haveanimpactonthebusiness,wehaveappliedthedefinitionsbelow.
Althoughariskoropportunitymayhavebeenassessedasbeginningtohave
animpactintheshortterm,theimpactmay,insomecases,extendintothe
mediumorlongterm.
Short term
(0 – 3 years)
Aligns to our current pipeline of
opportunities and projects and
reflects issues and trends that are
already having some impact.
Medium term
(3 – 10 years)
Issues or trends that are already
visible, but are not yet having a
significant impact.
Long term
(10 – 30 years)
Potential issues or trends that are
foreseeable, but there is a high degree
of uncertainty on how they develop
and what impact they will have on
the business.
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59
Scenarios
Task Force on Climate-related Financial Disclosures (TCFD) continued
UK-SSP
scenario
UK-SSP1
Sustainability
UK-SSP2
Middle of the road
UK-SSP5
Fossil-fuelled development
RCPscenario RCP2.6 RCP4.5 RCP8.5
Abstract The policy agenda is driven by
changing societal attitudes with
greater focus on equality and
environmental protections.
The policy agenda initially does
not change significantly, but
then requires radical reform
with increased reliance on
public-private finance.
The policy agenda is driven by
a focus on strong economic
growth and maintaining energy
and food security.
Key physical features
CO
2
eemissions
Global emissions falling to net
zero around 2075.
Global emissions remain at
current levels until mid-century,
then falling but not reaching net
zero by 2100.
Global emissions triple by 2075.
Estimateofglobal
warmingby2100
1.8 2.7 4.4
Climateimpacts
In all scenarios, the UK experiences milder, wetter winters and hotter, drier summers. More regular
extreme weather events such as heatwaves, droughts, flooding and storms are virtually certain in all
scenarios, and become more frequent and more extreme as estimated global warming increases.
Key transition features
Regulation
Strong environmental
regulations are introduced,
especially in relation to carbon
emissions and environmental
protection.
More stringent land use and
planning regulations are
gradually introduced to combat
the increasing degradation of
the natural environment.
Environmental legislation is
relaxed to support the focus on
economic development.
Investment
Increase in public spending on
infrastructure with a focus on
repurposing and transformation
of infrastructure, to drive
energy efficiency and wider
access to good quality public
services in education and
healthcare and other public
infrastructure.
Initially increased investment
on connectivity and transport
infrastructure, then public
spending shifts to focus on
technology to support smart
cities, vertical agriculture, etc.
Public-private partnerships
result in slightly increased
investments in education,
health care and other public
infrastructure.
High levels of public spending
on infrastructure, health and
education are maintained,
funded by and in support of
economic growth.
Energy
Renewables, with significant
public and private investment in
wind and solar as well as nuclear
generating capacity.
Continued reliance on fossil
fuels, and renewables becoming
an increasing part of the energy
mix. The private sector finances
large-scale infrastructure
projects for renewable energy
(eg barrages).
Energy policy prioritises
development of North Sea and
shale gas reserves. Investment in
renewables decreases due to lack
of incentive with renewables only
remaining when economically
feasible.
We have used these scenarios to provide a qualitative assessment of how the climate-related risks and opportunities we have identified on
pages 63 to 68 may change under the different potential pathways.
60
Galliford Try Annual Report and Financial Statements 2023
Resilience of our strategy
The nature and scope of our activities
and the commercial environment in which
we operate provide us with a number
of inherent advantages in terms of the
resilience of strategy and our exposure to
climate-related risks:
+ We do not have capital tied up in
production facilities or other assets
that could be at risk of stranding, ie
their useful economic life being
curtailed due to the transition to a
low carbon economy.
+ Our operations are entirely in the UK
and therefore, while still exposed to
rising mean temperatures and more
severe weather events, we have
limited exposure to the climate extremes
that are predicted to make human life
unsustainable in some regions of
the world.
+ Our presence in sectors such as
Environment position us to deliver on
the UK’s requirement to address the
impacts of climate change such as
storm overflows.
+ At any given time, across the UK we have
a geographically dispersed portfolio of
projects, therefore we are not exposed
to damage to a business-critical facility,
such as a factory or distribution centre,
due to extreme weather.
+ We are not exposed to rapid and
unpredictable shifts in consumer
preferences and behaviour as our work
is for long-term repeat clients, largely in
the public and regulated sectors.
+ We are not exposed to the capital
investment cost or risk associated
with developing new, low carbon
alternatives to existing product ranges
as this is typically carried out by our
supply chain partners.
+ Where we have good visibility of rising
costs, these can be priced into our bids
and recovered from clients.
The qualitative scenario analysis we
have performed this year provides
further demonstration of the resilience
of our Sustainable Growth Strategy. The
strength of existing client relationships,
our investment in developing our low
carbon construction capability and ongoing
collaboration with our supply chain position
us well to manage the risks and capitalise on
the opportunities of a rapid transition to a
net zero economy. In the event of a slower
or even no transition to net zero, there will
still be market demand for construction
services, albeit the investment drivers will
have a greater focus on climate change
adaption rather than mitigation.
Financial impact
For each of our climate-related risks and
opportunities, we have identified the
category of the potential financial impact.
Given the nature of our most significant
risks and opportunities, the potential
impacts are on the income statement and
relate to decreased or increased revenue
or decreased or increased operating costs.
It is unlikely that these risks represent any
material balance sheet exposures such
as asset write-downs, increased capital
investment requirements, or liabilities for
environmental remediation.
However, we have not disclosed any
quantitative assessment of the potential
financial impacts. We acknowledge the
importance of being able to quantify the
potential financial impact of climate-related
risks and opportunities, however, we also
recognise the need for such disclosures
to be meaningful and comparable. This
is currently extremely challenging for a
number of reasons:
+ In the absence of consistent and
detailed guidance on methodologies that
should be adopted to quantify financial
impacts, there is a risk that we adopt a
quantification methodology that is not
consistent with other reporters, resulting
in potentially misleading disclosures.
+ Because we are constantly responding
to the evolving expectations of clients
and the market, it is extremely difficult
to disaggregate the impact of climate-
related risks from business as usual risks.
+ Similarly, assessing the impact of risks
without mitigation is extremely difficult
to do because ‘doing nothing’ is not an
option and the mitigation is embedded in
our business as usual.
+ Any quantification would be based on
scenarios which have been developed
for modelling purposes and therefore
do not represent forecasts of actual
financial impacts.
+ The risks and opportunities are
interrelated and therefore any
quantification in isolation would be
potentially misleading.
Until further consistent and definitive
guidance around quantification
methodologies for climate-related financial
impacts is available, we will continue to
disclose how each risk or opportunity could
have an impact on our financial performance
and provide a qualitative assessment of the
level of risk under different scenarios.
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Metrics and targets
During the year, we have reviewed the TCFD guidance on metrics and targets and defined a number of metrics that are relevant to our
business, using the cross-industry metric categories. Most of the metrics are existing KPIs and further information on our performance
in the year is provided in the ‘Operating sustainably’ section of the report. We will look to develop additional metrics and targets that are
more closely aligned to the climate-related risks and opportunities we have identified over the next two-three years.
Metric category Metric Calendar year
2021
Calendar
year 2022
Target
GHGemissions
Scope 1 and 2 emissions –
location-based (tCO
2
e)
10,795 11,822 Net zero by 2030
Scope 3 emissions –
verified (tCO
2
e)
1
6,040 8,760 Net zero by 2045
Full Scope 3 emissions
(tCO
2
e)
2
487, 2 2 0 477,042 Net zero by 2045
% of company car fleet
that is EV or PHEV
51% 79% 100% by 2027
% of purchased electricity
on renewable tariffs
81.1% 83.6% 100% by 2025
Waste intensity
Tonnes of waste per
£100k revenue
21.0 21.8 Year-on-year
reduction.
Transitionrisksand
opportunities
We are looking to develop additional metrics and targets in these areas.
Remuneration
% of Executive bonus linked
to emissions reduction
3
Not applicable 3% 3%
Internal carbon price
Price per tCO
2
e (£) We do not currently
use internal carbon
charging.
Introduce internal
carbon charging in
due course.
Notes:
1. Scope 3 verified emissions are those emissions that have been calculated and included in the scope of the external verification.
2. Scope 3 estimated emissions are those emissions that have been estimated, but not externally verified.
3. See Remuneration Committee section on page 110 for details of Executive bonus performance criteria.
Transition Plan
We have reviewed the disclosure framework and sector specific guidance published by the Transition Plan Taskforce (TPT) and will work
towards integrating the TPT disclosure framework guidance as we develop and publish our Transition Plan.
Task Force on Climate-related Financial Disclosures (TCFD) continued
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Galliford Try Annual Report and Financial Statements 2023
Risks
Riskdescriptionandpotentialimpactonthebusiness
Our clients, in both the public and commercial sectors, are
increasingly required to operate low carbon buildings and
infrastructure. They expect us to have the capability to model the
embedded and operational carbon, use lower carbon materials
and extend the life of their existing assets through retrofitting.
Planning policies and building regulations may also move towards
ensuring that embedded and/or operational carbon targets are
incorporated into the design and construction of buildings and
infrastructure.
If, together with our supply chain, we fail to develop these
capabilities quickly enough, we may not remain competitive and
may not be able to win positions on key frameworks which may
result in reduced levels of revenue and profits.
Riskmitigation
We have committed to achieving net zero across our own
operations by 2030 and across all value chain operations by
2045. To do this, we have developed our ‘Journey to Net Zero’
framework and are taking multiple actions to achieve our carbon
reduction targets including:
+ Working closely with our clients to understand their carbon
reduction ambition and targets, and developing solutions to
meet those objectives.
+ Investment in key carbon reduction roles.
+ Carbon literacy training for all staff.
+ Supply chain engagement and upskilling.
+ Development of carbon reduction management process.
+ Use of carbon calculators to model embodied and operational
carbon.
+ Development of systems and applications to improve carbon
data and reporting.
Fail to develop a competitive low carbon construction capability
Timehorizon
Mediumterm
Potentialimpactonfinancialperformance
+ Decreased revenues
Link to our principal risks
❶ Work winning
Scenario analysis Sustainability Middleoftheroad Fossil-fuelleddevelopment
Levelofrisk
The risk is greatest under the ‘Sustainability’ scenario, as client expectations in relation to low carbon construction will evolve more
quickly and across more sectors, driven by increased regulation and changing stakeholder sentiment. Under the other two scenarios, this
risk is much reduced as the regulatory and market drivers will not be focusing on low carbon construction.
Levelofrisk
High Moderate Low
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Riskdescriptionandpotentialimpactonthebusiness
A significant amount of construction activity happens outside and
therefore is exposed to the weather. The Met Office UK Climate
Projections (UKCP August 2022) predict warmer, wetter winters
and hotter, drier summers, along with an increase in the frequency
and intensity of extreme weather events including heatwaves,
intense rainfall and flooding. Such events could lead to disruption
to our construction activities in a number of ways:
+ Prolonged, extreme temperatures, such as in heatwave
conditions, may require modifications to working practices
to maintain worker welfare which may increase costs and
reduce productivity.
+ Intense storm events, including intense rainfall and high winds
may cause damage to works under construction and curtail
certain activities, such as crane lifts or earthworks, which could
result in project delays and additional costs.
+ Damage to transport and utilities infrastructure caused
by severe weather may make it more difficult for staff and
deliveries to get to sites.
+ Extreme drought conditions could result in restrictions on
water usage which may make it impossible to maintain site
welfare or restrict certain activities, such as concrete pouring
and dust suppression.
+ Extreme weather events in other parts of the world could lead
to supply chain disruption (unavailability, longer lead times and
increased costs).
Changes in temperature extremes can also have an impact on
the resilience of building materials and therefore determine the
materials we are able to use and could lead to a greater number
of latent defect claims. Similarly, changes in climate may influence
the heating and cooling systems that we specify which may
increase the costs of the buildings and infrastructure we build.
Riskmitigation
As was demonstrated during the pandemic, we are experienced
in developing and amending site operating procedures in
response to specific health and safety risks. Examples of
adaptations we could make include:
+ Increased provision of welfare facilities, including access to
shade, water and sunscreen.
+ Flexible working patterns to limit work in the hottest part of
the day.
+ Increased use of off-site and other MMC to shorten
programmes and reduce the number of people on site.
Similarly, we are experienced in managing the impact of
unexpected events on construction programmes and have a
number of operational and contractual mechanisms to mitigate
the risks, including:
+ Resequencing of activities.
+ Staggering of shifts to extend the working day.
+ Securing extensions of time.
+ Insurance cover for damage to property.
More regular extreme weather events
Timehorizon
Shortterm
Potentialimpactonfinancialperformance
+ Increased direct costs
Link to our principal risks
❷ Projectdelivery
❸ Resources
Scenario analysis Sustainability Middleoftheroad Fossil-fuelleddevelopment
Levelofrisk
In all scenarios, the UK will experience milder, wetter winters and hotter, drier summers. More regular extreme weather events such
as heatwaves, droughts, flooding and storms are virtually certain in all scenarios, and become more frequent and more extreme as
estimated global warming increases.
Task Force on Climate-related Financial Disclosures (TCFD) continued
Risks
Levelofrisk
High Moderate Low
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Galliford Try Annual Report and Financial Statements 2023
Riskdescriptionandpotentialimpactonthebusiness
There are a number of climate-related drivers that may result
in sustained increases in materials costs in the construction
sector. This is driven through a combination of the market
dynamics of supply and demand imbalances, as well as
Government policy to incentivise carbon reduction. Our bidding
disciplines and contractual protections largely insulate us from
the direct impact of cost increases. However, the indirect
consequence of rising construction costs could be potential
projects becoming unaffordable for our clients, leading to a
reduction in opportunities or delays in project starts due to
clients’ budgets constraints.
Manufacturers are developing innovative, lower-carbon materials
all the time and this is vital if we are to reduce the embodied
carbon of the buildings and infrastructure we construct. However,
as new products come on to the market and establish credibility,
demand for these materials could grow more quickly than the
production capacity, resulting in higher material costs.
In the short to medium term, the supply and demand imbalances
in global energy markets are likely to be sustained as countries
manage the twin challenge of decarbonising electricity generation
and increasing security of supply. High energy prices will continue
to increase the cost of materials that have energy intensive
manufacturing processes, such as steel, concrete, and glass.
In addition to the market imbalances, regulatory moves to use
carbon pricing to incentivise carbon reduction may add further
upwards pressure on the price of carbon-intensive materials.
It is also possible that the UK-Energy Trading Scheme is
extended to other sectors considered to be carbon intensive,
including construction.
Riskmitigation
+ Maintain bidding and contracting discipline to protect
ourselves from short-term cost inflation and maximise cost
recovery.
+ Use of BIM and carbon calculators to optimise designs and
reduce the amount of carbon-intensive materials.
+ Increase the adoption of off-site manufacture and other MMC
to reduce costs through minimising waste and shortening
construction programmes.
+ Work with clients to support design solutions that minimise
the material requirements eg transitioning from new build to
retro-fitting and refurbishment.
Increased material costs make projects unaffordable
Timehorizon
Shortterm
Potentialimpactonfinancialperformance
+ Decreasedrevenuesduetoreduceddemand
forproductsandservices
Link to our principal risks
❶ Work winning
❸ Resources
Scenario analysis Sustainability Middleoftheroad Fossil-fuelleddevelopment
Levelofrisk
The risk is highest under the ‘Sustainability’ scenario as there will be the greater urgency to transition to low carbon energy and
materials, exacerbating the supply and demand imbalances. The extension of carbon pricing and other regulatory pricing incentives to
reduce carbon emissions is also more likely under the Sustainability scenario.
Levelofrisk
High Moderate Low
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Riskdescriptionandpotentialimpactonthebusiness
As the focus on embedded carbon increases, we expect to
increasingly be required to use lower carbon alternatives for
construction materials, especially carbon-intensive materials such
as steel, concrete and glass. There is a risk associated with the
adoption of new materials and using manufacturers and suppliers
we have no experience of working with previously. Without
effective product and design evaluation and robust quality
assurance procedures, there is a risk of increased defects, which
in turn could result in the professional indemnity insurance market
responding through further increases in premiums or restrictions/
limitations in cover.
Similarly, to achieve our scope 1 and 2 net zero by 2030 target,
we will have to significantly reduce (if not eliminate) our use of
diesel-powered plant and equipment. The non-diesel alternatives,
such as HVO, electric and hydrogen, may not be available in the
volumes we require, at an equivalent cost, or deliver sufficient
safety and/or operational performance.
Riskmitigation
Response includes:
+ Development and implementation of digital tools to drive
quality such as FieldView, BIM and Dalux.
+ Investment in employee training including enhanced PMDF
modules.
+ Using our Technical and Quality, Research and Development
and Supply Chain teams to evaluate new materials, plant
and equipment and other new technology and support their
adoption across the business.
+ Quality alerts to share learning and information where
potential issues with particular products have been identified.
Failure to manage the adoption of new technology
Timehorizon
Mediumterm
Potentialimpactonfinancialperformance
+ Increased direct costs
Link to our principal risks
❷ Projectdelivery
❸ Resources
Scenario analysis Sustainability Middleoftheroad Fossil-fuelleddevelopment
Levelofrisk
The risk is highest under the ‘Sustainability’ scenario as there will be the greater urgency to deploy new technology, driven by regulatory
requirements and market expectations.
Task Force on Climate-related Financial Disclosures (TCFD) continued
Risks
Levelofrisk
High Moderate Low
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Galliford Try Annual Report and Financial Statements 2023
Opportunitydescriptionandpotentialimpactonthebusiness
In order to decarbonise the built environment in the UK, and meet
emerging energy efficiency standards, there is a need for our
clients to ensure that existing assets are either replaced with new,
more energy-efficient assets, or increasingly, ensure that they are
modified to extend their life and improve their energy efficiency.
Demand for both new build and retrofit of existing assets with low
embodied and operational carbon performance is likely to create a
pipeline of opportunities, particularly in sectors where we already
have a strong presence such as education and health.
Opportunityrealisation
The actions we are taking to realise the opportunities are similar
to the actions we are taking to mitigate the risk of failing to
develop our low carbon construction capability, ie:
+ Working closely with our clients to understand their carbon
reduction ambition and targets and developing solutions to
meet those objectives.
+ Investment in key carbon reduction roles.
+ Use of carbon calculators to model embodied and operational
carbon.
+ Develop tools to assess the energy efficiency of existing
buildings and model the impact of investment in
improvements such as upgraded insulation, lighting or
renewable energy.
+ Develop capability to design and deliver more energy efficient
wastewater treatment processes.
Increased demand for low carbon buildings and infrastructure
Timehorizon
Shortterm
Potentialimpactonfinancialperformance
+ Increasedrevenuesresultingfromincreased
demandforourproductsandservices
Link to our principal risks
❶ Work winning
Scenario analysis Sustainability MiddleoftheRoad Fossil-fuelledDevelopment
Levelofopportunity
The opportunity is greatest under the ‘Sustainability’ scenario, as client requirements and expectations in relation to low carbon buildings
and infrastructure will evolve more quickly and across more sectors, driven by increased regulation and changing stakeholder sentiment.
Conversely, in the ‘Fossil-fuelled development’ scenario, the regulatory and market forces will be weakest and will not drive investment in
low carbon construction.
Opportunities
Levelofopportunities
High Moderate Low
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67
Opportunitydescriptionandpotentialimpactonthebusiness
As we experience more regular and more extreme weather
events, such as prolonged heatwaves and intense rainfall events,
there will be a need to make our public infrastructure more
resilient to the changing climate. This is already a significant
issue for the water sector where the capacity of the existing
sewerage and wastewater treatment infrastructure is struggling
to keep pace with the increasing demands placed on it by more
regular, intense rainfall events, greater run-off from a more built
up environment and population growth. As a result, there is
strong public and political support for significant investment
to improve the resilience of our water infrastructure, with a
particular focus on increasing wastewater storage and treatment
capacity and reducing combined sewer overflow discharges.
There will also be the need to increase the resilience of water
supplies to deal with increased demand and periods of drought,
with associated investment in water storage, transfer and
treatment infrastructure.
Opportunityrealisation
We are already extremely well-positioned in the water
sector, working with all the water and sewerage companies in
England and Scotland. The actions we are taking to realise the
opportunities include:
+ Strategic acquisitions in adjacent markets, such as nmcn, MCS
Control Systems and Ham Baker, to broaden our capability
and drive margins.
+ Growing capacity and capability in our Environment business
through targeted recruitment.
+ Working with our supply chain to develop new solutions to
address climate resilience issues, such as remote monitoring of
river quality.
Climate resilience and adaption
Timehorizon
Shortterm
Potentialimpactonfinancialperformance
+ Increasedrevenuesresultingfromincreased
demandforproductsandservices
Link to our principal risks
❶ Work winning
Scenario analysis Sustainability Middleoftheroad Fossil-fuelleddevelopment
Levelofopportunity
There is likely to be high demand for the construction of climate-resilient infrastructure in all scenarios. There is already a significant
demand within the water sector, driven by political and public sentiment, and this will only increase as the physical impacts of climate
changes become more severe.
Task Force on Climate-related Financial Disclosures (TCFD) continued
Opportunities
Opportunitydescriptionandpotentialimpactonthebusiness
The drive to reduce carbon in our own operations also creates an
opportunity to realise the commercial benefits of greater resource
efficiency, for example through reduced levels of business travel,
lower energy and water consumption, and minimising waste.
Opportunityrealisation
We are already taking actions to achieve cost savings through
more efficient use of resources, with examples including:
+ Transitioning our company car fleet to electric and plug in
hybrid only.
+ Using the most energy efficient welfare and office
accommodation cabins available.
+ Developing baselines and targets for water consumption on
our projects.
+ Combining battery storage with the latest generation of diesel
generators to minimise diesel consumption.
More efficient use of resources
Timehorizon
Shortterm
Potentialimpactonfinancialperformance
+ Reducedoperatingcosts
Link to our principal risks
❷ Projectdelivery
❸ Resources
Scenario analysis Sustainability MiddleoftheRoad Fossil-fuelledDevelopment
Levelofopportunity
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
High Moderate Low
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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.
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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 year Outcomes
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.
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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 group Stakeholder group
How we engage How we engage
Actions in the year Actions in the yearOutcomes Outcomes
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 group Stakeholder group
How we engage How we engage
Actions in the year Actions in the yearOutcomes Outcomes
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 report Governance Financial statements
gallifordtry.co.uk
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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
Remuneration p89
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
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Financial statementsGovernanceStrategic report
Executive 2
Male 3
0-2y 3
Non-executive 5
Female 4
2-5y 3 5-10y 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
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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 →
Pleaseseepages76to77ondirectors’biographies→
TheBoard
BoardCommittees ExecutiveBoard
andCommittees
The Board has delegated certain responsibilities to its committees. Each committee has
its own terms of reference, available on our website at https://www.gallifordtry.co.uk/
about/governance-and-policies/. These are reviewed annually and updated where
necessary, to ensure they remain in line with best practice guidance.
78
BoardComposition
As at 30 June 2023, the Board comprised the Chair, four independent Non-executive directors, the Chief Executive and the Finance
Director. This is considered to be the appropriate number of members for the Board, given the current scale of the Group’s operations. The
Board considers all the Non-executive directors, including the Chair, to be independent. As disclosed last year, to ensure a smooth transition
of the important role of Chair of the Remuneration Committee it is intended that Terry Miller, Senior Independent Non-executive Director
and Chair of the Remuneration Committee, will continue on the Board in her current roles beyond the normal nine years for a short period
until October 2023 when she will step down as a director. This limited extension to the term of office is considered appropriate by the
Board and the Remuneration Committee and Terry Miller will remain independent in character and judgement.
Biographical summaries for each of the directors as at 30 June 2023, their respective responsibilities and their external directorships are set
out on pages 76 to 77.
Division of Responsibilities
There is a clear division of responsibility between the Chair and the Chief Executive and the roles of the Chair, Chief Executive and Senior
Independent Director are set out in writing and summarised below. In line with the Code, the Board reviewed these roles during the year.
These documents can be found on our website at https://www.gallifordtry.co.uk/about/governance-and-policies/.
Role Summaryofresponsibilities
Chair
TheChair’sresponsibilitiesinclude:
+ leading the Board, ensuring it is effective;
+ ensuring strong working relationships with all Board members, promoting a culture of openness, debate and constructive challenge;
+ ensuring the Board has the right balance of diversity, skills, experience and independence, and that Non-executive directors have
appropriate inductions and development;
+ setting the Board’s agenda, ensuring accurate and timely information is received and effective decision-making processes are in place;
+ ensuring effective communications with all shareholders and other stakeholders, with any major concerns considered by the Board;
+ ensuring a clear relationship between remuneration and the Company’s long-term success;
+ with the Chief Executive and the Finance Director, representing the Company in the industry and financial community;
+ leading annual reviews of the performance of the Board and directors; and
+ ensuring the highest standards of corporate governance and full compliance with the Code.
ChiefExecutive
TheChiefExecutive’sresponsibilitiesinclude:
+ developing the Group’s objectives and strategies, taking into account the Group’s responsibilities to its stakeholders, achieving
objectives and executing the strategy approved by the Board;
+ preparing and meeting the budget and strategic financial plan, closely monitoring performance across the Group and taking action
where necessary;
+ examining all investment and major projects, executing acquisitions and disposals, approving major proposals or bids, and identifying
new business opportunities;
+ managing risk, including health and safety performance and ensuring the implementation of Group policies;
+ ensuring effective communication with shareholders and other stakeholders; and
+ effective leadership of the senior executive team, including development and succession planning.
Senior
Independent
Director
TheSeniorIndependentDirector’sresponsibilitiesinclude:
+ acting as a valued adviser and sounding board to the Board and Chair, and being available for confidential discussions with the
Non-executive Directors on any matter relating to the Board, performance or strategy;
+ meeting with the Non-executive Directors (without the Chair present) at least once a year and evaluating the Chair’s performance;
+ chairing meetings of the Nomination Committee when considering succession for the Chair (unless the Senior Independent Director is
a candidate for the role);
+ being an alternative point of contact for shareholders and attending sufficient meetings with shareholders to understand their views;
and
+ acting as an alternative point of contact for the executive directors and senior executive team.
A Non-executive directors’ role is to offer advice and guidance to the executive directors and, when required, constructively challenge the
executive directors and Group senior management on performance and strategy matters.
The roles and responsibilities of the Non-executive directors are specified in their letters of appointment. The letters of appointment are
available for inspection on request at the Group’s registered office and will be available immediately prior to and during the 2023 AGM.
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Galliford Try Annual Report and Financial Statements 2023
Operational management of the Group
Contracts up to a prescribed value
Implementation of Group policies
Management succession planning
Allocation of Group resources
Risk management
Governance review continued
2022/23 Board and Committee meetings attendance table
Numberofmeetings(attended/scheduled) Board AuditCommittee NominationCommittee RemunerationCommittee
Alison Wood Chair 8/8 by invitation 2/2 3/3
BillHocking Chief Executive 8/8 by invitation by invitation by invitation
Andrew Duxbury Finance Director 8/8 by invitation n/a n/a
TerryMiller Senior Independent Director 8/8 3/3 2/2 3/3
MarisaCassoni Non-executive Director 8/8 3/3 2/2 3/3
SallyBoyle Non-executive Director 8/8 3/3 2/2 3/3
MichaelTopham
1
Non-executive Director n/a n/a n/a n/a
KevinCorbett General Counsel & Company Secretary 8/8 3/3 2/2 3/3
PeterVentress
2
Former Chair 2/8 by invitation n/a 2/3
Gavin Slark
3
Non-executive Director 6/8 2/3 1/2 3/3
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.
MattersreservedfortheBoard Mattersdelegatedtomanagement
Group values and standards
ApprovalofGrouppolicies
Acquisitions,disposalsandcontractsoveraprescribedvalue
Groupborrowingfacilities
Groupstrategy,businessplansandannualbudgets
MaterialchangestoGroupsharecapital
Materialcontractsandjointarrangements
Approvalofcircularsandfinancialreports
Director appointments and succession planning
Alison Wood, who joined the Board as a Non-executive Director on 1 April 2022, was appointed Chair of the Board and Chair of the
Nomination Committee on 21 September 2022, following the resignation of Peter Ventress. Sally Boyle joined the Board as a Non-executive
Director on 1 May 2022 and will assume the role of Chair of the Remuneration Committee when Terry Miller, Senior Independent Director
and Non-executive Director, steps down in October 2023.
Following the resignation of Gavin Slark, Non-executive Director, on 31 March 2023, Michael Topham joined the Board as Non-executive
Director on 1 June 2023.
In line with the Code, all directors will stand for re-appointment or re-election at the 2023 AGM, with the exception of Terry Miller who will
be stepping down prior to the AGM in October 2023. The directors’ performance continues to be effective, and they clearly demonstrate
their commitment to their respective roles.
The Nomination Committee reviewed and refreshed succession plans during the year for the Board and other senior management roles.
Good progress has been made with refining our leadership programme to target each individual’s development requirements and support
them in their progression within the Group.
Delegated authorities
The Board continues to operate an established framework of financial, commercial and operational matters delegated to management,
which is reviewed annually. A summary of the matters reserved for the Board and the matters delegated to management is set out in the
table below.
80
Board activities during the year
The Board, supported by the General Counsel & Company
Secretary, ensures that Board meetings are carefully
structured to allow enough time for open discussion. The
Board agenda is structured between standing agenda items,
governance requirements and areas of operational and
strategic focus. The Board regularly reviews and discusses
the following topics:
+ Reports on health, safety, environment and
sustainability.
+ The financial performance of the businesses.
+ Progress against the Group strategy and operational
reviews.
+ The relative performance of the Company’s share price.
+ Comments by market analysts, along with any
shareholder feedback, to ensure that the Board has a full
understanding of the views of major shareholders.
+ Insights from the Employee Forum and the
ESG Committee.
In addition, the Board receives regular presentations from
the businesses on operational matters, helping Board
members to stay up-to-date with specific operational
matters and sector-relevant issues. The Board also
receives updates from advisers, as and when required.
Board members are encouraged to undertake their own
continuing professional development. The non-executive
directors’ roles on other boards also help them to develop
a broad range of skills and perspectives, from which the
Group can benefit.
Monitoring of Culture
Our people are our greatest asset and, in line with the
Code, the Board recognises the importance to closely
monitor its culture and engage with employees through a
variety of means and initiatives to develop and embed a
positive and progressive culture. Each year an employee
engagement survey is conducted with key questions sent
to all employees with answers anonymised to enable full
confidentiality. In general, the questions are similar to past
surveys to enable comparisons and trends to previous
years to be made. Other initiatives include the Employee
Forum where a group of employees meet with a Non-
executive Director and, by providing an opportunity to
discuss matters and receiving employee feedback which is
disseminated to the wider Board, the employee voice in the
Board room is strengthened. The types of matters discussed
include: update on strategic objectives, employee feedback
on their business areas, cost of living challenges, well
being initiatives, training & recruitment, health and safety
matters. Informal channels are also used such as the general
engagement and take-up of internal courses, feedback
on Group briefings and questions arising from the CEO
roadshow. All metrics are closely monitored such as new
starter rates, churn rates, sickness days taken and employee
advocacy scores and an Employee Value Statement has
been introduced to help employees fully understand the
overall salary and benefits package they receive. Initiatives
such as agile working and family-friendly policies are
included where possible to enable participation from as
wide a range of the population as possible and a mobility
programme to assist employees who need to re-locate to
be accommodated.
Please see page 27 in the Strategic Review section for further
information.
Board Decision Making in Action
Considering stakeholder interests
when acquiring MCS Control
Systems and Ham Baker
Overview
InJuly2022andNovember2022,GallifordTryacquired
MCSControlSystemsandHamBaker’sassetinspection,
maintenanceandscreensanddistributoroperations,
respectively.
Whendecidingtomake
theacquisitions,theBoard
consideredthefollowing
factors:
+ The Group’s Sustainable
Growth Strategy and each
business’s fit with the
strategy to grow in adjacent
and complementary markets.
+ The specific capability of each
business under consideration,
its assets, customer
relationships and technical
capabilities in relation to how
complementary they were
to Galliford Try’s existing
operations or whether it
would create duplication.
+ The audited revenue of
the businesses being
acquired and profits prior to
subsequent re-statements.
+ The purchase price,
transaction costs, contractual
liabilities and commercial and
legal terms.
+ The position and reputation
of each business and any
potential investment needed
in those.
Thefollowingstakeholder
interestswereconsidered:
+ The management resource
taken to lead integration of
the businesses and the impact
on the existing people within
the business.
+ Potential impact on existing
clients and whether time
would need to be diverted
from those operations.
+ The future of the employees
within the acquired
businesses.
+ Our ability to successfully
deliver for our new clients.
+ Supply chain considerations.
+ Potential shareholder returns.
+ Broadening capabilities to
serve clients and communities
nationwide as a result of the
acquisition.
WhodidtheBoardengage
withinmakingitsdecision?
The Board liaised with a
cross-section of stakeholder
groups including the Managing
Director of the Environment
business, the General Counsel
& Company Secretary, the HR
Director and external specialist
advisors to consider all aspects
of the transaction, including the
interests of existing employees,
clients and shareholders.
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Key areas of Board discussion during 2022/23
The Board held eight scheduled meetings during the year and also held ad hoc meetings in relation to succession and strategic matters.
The Board’s key activities and actions taken from the year are summarised in the table below.
Governance review continued
Stakeholders considered
Strategy and
implementation
Acquisition
+ Considered and approved proposals for the acquisition of the specialist businesses of MCS Control
Systems Ltd and Ham Baker to further enhance the off-site build and asset optimisation offer to clients
by the Environment business, improving customer relationships, technical capabilities to complement
existing operations and supporting the Group’s Sustainable Growth Strategy.
+ Continued the monitoring of the integration of the nmcn water business into the Group following
acquisition in July 2021.
+ Received reports on other growth opportunities.
Sustainability
+ Oversaw the Group’s sustainability initiatives including: performing a full inventory of the Group’s
scope 3 emissions, with the support of external carbon consultants, and developing science-based
near-term reduction targets that have subsequently been validated by the SBTi (Science Based Targets
Initiative).
+ Received reports from the Chairs of the Stakeholder Steering Committee (now incorporated into
the ESG Committee) and the Employee Forum.
Culture,
resources
and people
Operationalperformance
+ Received Health, Safety and Environmental (“HS&E”) reports at every meeting and received a
presentation from the HS&E Director on the Group’s HS&E performance in 2022/23.
+ Received regular divisional business performance reports and business review presentations from the
Group’s principal divisions throughout the year.
+ Received regular reports from the Company’s brokers and investor relations advisers.
+ Visited part of the nmcn water business and the Building business’s Monk Bridge development
in Leeds.
+ Reviewed Prompt Payment Code performance.
Succession planning
+ Approved the appointment of Alison Wood as Chair of the Board and Chair of the Nomination
Committee.
+ Initiated and approved the appointment of a new Non-executive director on the recommendation of
the Nomination Committee.
Employees
+ Received updates from the Employee Forum Chair after each Forum meeting, including observations
on the Group’s culture.
+ Approved publication of the Gender Pay Report.
+ Approved the 2023 Sharesave invitation.
Governance
Compliance
+ Received regular updates from the General Counsel & Company Secretary on governance
and regulatory developments.
+ Reviewed the various Board Committees’ Terms of Reference.
+ Considered the UK Audit and Governance Reforms by The Department for Business and Trade
(formerly BEIS) and possible implications and changes required for the Group.
+ Monitored the implementation of a new internal management system.
+ Monitored measures to strengthen cyber security.
Boardevaluation
+ Considered the output from the 2022 externally facilitated Board evaluation process,
identified areas for improvement and agreed actions to be taken.
+ Approved the internally facilitated Board Evaluation 2023 exercise.
Keytostakeholders:
Clients Shareholders People Suppliers Communities
82
Stakeholders considered
Governance
(continued)
Stakeholderengagement
+ Sought shareholder and institutional feedback at the half and full year results presentations
and in connection with the AGM.
+ The Chief Executive, Finance Director, Chair and General Counsel & Company Secretary
communicated and met with major shareholders.
+ Held the 2022 AGM as a physical meeting in London. Shareholders were also invited to submit
questions ahead of the meeting.
+ Received reports from the Chair following each Committee meeting and considered the feedback
from Committee members.
+ The Chair of the Remuneration Committee and Company Secretary sought feedback from
key shareholders, fund mangers and proxy agents on the proposed 2023 Remuneration policy.
Financial
oversight
Financialresources
+ Approved the 2023 budget.
+ Reviewed financial performance against half and full year forecasts and cash forecasts.
+ Declared an interim dividend of 3.0 pence per share, paid to shareholders in April 2023.
+ Approved the launch of a Share Buyback Programme.
+ Agreed settlement terms with a major infrastructure fund.
+ Approved the payment of a special dividend.
Reporting
+ Reviewed and approved the Group’s half year and full year results, following advice from the
Audit Committee.
+ Reviewed the trading statement issued in July 2022.
+ Reviewed the trading statement issued in January 2023.
+ Reviewed and approved the Annual Report.
Risk
+ Received regular reports from the Head of Internal Audit and Assurance on the status of the internal
audit programme.
+ Received and considered reports on the Group’s risk management approach and reviewed proposed
updates to the Group risk register.
+ Received reports from the Executive Risk Committee following each committee meeting.
+ Received reports from the Director of Sustainability and Risk on the Group’s principal and
emerging risks.
+ Considered the Group’s Insurance programme.
Board Strategy Meeting
CollaboratingwiththeExecutiveteamtoreview
ourprogressandstrategicprioritiesto2026
The Board held its annual strategy meeting in April 2023, with
the Executive Board and the managing directors of Highways
and Environment as well as receiving presentations and reports
from management, including an update on ESG. The agenda for
the meeting was agreed between the Executive Board and
Non-executive directors.
The purpose of the strategy meeting was to monitor and assess
the progress made to date to the strategic plan to 2026 as set
out in September 2021 and review the Group’s businesses and
opportunities for growth.
Keytostakeholders: Clients Shareholders People Suppliers Communities
The meeting also considered the integration and embedding of the
recently acquired businesses of MCS Control Systems and Ham
Baker during the year, and the further integration of the nmcn water
business acquired in 2021.
During its discussions, the Board ensured it considered the interests
of all stakeholders. The meeting also discussed other critical areas,
including health, safety and wellbeing, ESG commitments and
carbon reduction progress, the governance framework and people
and succession planning. The Finance Director also provided an
update on financial performance and investor relations.
As a result of the meeting, the Board concluded that the strategy
remained appropriate and aligned to the Group’s culture, and that
the Group was making good progress towards its goals for 2026.
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Board evaluation:
2023 update and 2022 performance evaluation
In line with the Code, the Board reviews its own effectiveness and
that of its Committees each year, with an externally facilitated review
at least every third year. This year the 2023 Board evaluation exercise
was internally facilitated, as were those in 2021 and 2020, with the
evaluation in 2022 being externally facilitated. Overall, the evaluation
found that the Board and its Committees were operating effectively.
2023Boardeffectivenessreview
The 2023 Board evaluation process was internally facilitated by the
Chair supported by the General Counsel and Company Secretary
and carried out across March and April 2023, with the findings
presented to the May Board meeting.
Governance review continued
Questions were primarily reviewed in line with the Code and best
practice to ensure continued relevance but remained broadly similar
to previous internal evaluations to enable comparison of results to
measure progress and change over time. Additional questions this
year related to information and strategy on climate-related risks,
gender and diversity in succession planning and culture and values. A
commentary section is also included to ensure opinions are captured.
The process of the internal effectiveness review involves a detailed
and comprehensive on-line questionnaire securely sent to each
individual director for completion. Each director was asked to
complete a questionnaire specific to their Board and Committee
responsibilities; the completed questionnaires were then collated
and responses were reviewed by the Chair and General Counsel &
Company Secretary.
Board Decision Making in Action
Share Buyback Programme
Overview
TheBoardrecognisestheimportanceofcapitalreturnstoshareholders,andgiventheGroup’s
financialstrengthatthe2022yearend,consideredasharebuybackprogrammeforshareholders.
When deciding whether to run a
sharebuybackprogrammetheBoard
carefullyconsidered:
+ The Group’s overall financial
position following a strong financial
performance in FY22, resulting in
increased revenue, pre-exceptional
profit and operating margin.
+ The Group’s overall outlook at the
end of 2022, including the operating
performance and quality order book.
+ The Group’s overall capital allocation
priorities, which were to support
operational requirements and strategic
opportunities, to mitigate the effect of
future market downturns and to pay
sustainable dividends to shareholders,
to ensure these could continue to be
achieved.
+ The cash requirements of the business
to ensure the Group remained well
positioned to deliver on its strategy
and would continue to have sufficient
funds to invest in the business.
This included considering aggregate
and average month-end cash and
PPP assets.
Thefollowingstakeholderinterests
wereconsidered:
+ Shareholders – the share buyback
programme would create value for
shareholders by increasing demand for
shares, increasing earnings per share
and providing a vote of confidence
in the Company. It would also ensure
investors were satisfied their cash was
being used effectively.
+ Other stakeholders such as employees
and clients – the buyback provides a
strong indicator to all stakeholders of
the confidence that the Group was a
robust and financially strong company
that has long-term sustainability.
Result
Given the above framework and
background conditions, and being
satisfied it had sufficient capital to
support other Group strategic targets and
achieve sustainable growth, the Board
approved the Share Buyback Programme.
It was agreed that the Share Buyback
programme to purchase up to an
aggregate maximum consideration of
£15m of ordinary shares in the Company
would be to an appropriate and prudent
level of additional capital to return to
shareholders and to do so would be in
the best interest of the Company and its
shareholders. Accordingly, the programme
was initiated on 21 September 2022.
As at 30 June 2023 the share buyback
programme was in progress with
6,187,148 ordinary shares of 50p being
purchased by the Company at a cost of
£10,500,684.
84
In line with best practice, the performance evaluation of individual directors is conducted by the Chair on an annual basis who holds one-
to-one meetings with each Board member and the General Counsel & Company Secretary to discuss their performance, contributions,
commitments and any training and development needs. The Senior Independent Director also meets with all Board members and the
General Counsel and Company Secretary, except the Chair, to discuss the performance of the Chair and then meets with the Chair to
provide feedback.
The findings of the evaluation exercise were presented to the Board in May 2023. Overall, the Board and its Committees achieved high
scores and the evaluation confirmed the Committees are continuing to operate effectively. The results of the evaluation confirmed the
composition of the Board was appropriate for the size and structure of the business currently.
The Board has identified the following recommendations in which it would like to make improvements over the next financial year:
Recommendations Arising from 2023 Board Effectiveness Review
+ Composition: continue to monitor the appropriate skills, knowledge, diversity and experience to support the Company as
it evolves.
+ Succession planning: continue to monitor the development of the wider leadership team succession and development plans
and continue to build on inclusion and diversity initiatives.
+ Cohesiveness: ensure a culture of openness, contribution, debate and challenge continues as new members join.
+ External auditors: continue to work together to find ways in which working relations can be strengthened.
The 2022 Board Effectiveness Review
In 2022, Clare Chalmers Limited facilitated the Board evaluation process which included reviewing a selection of Board and
Committee papers and terms of reference, observing a Board and Audit Committee meeting as well as interviewing Board Members,
the General Counsel & Company Secretary and a number of external advisers who regularly interact with the Board.
As shown below, the Board has successfully addressed the actions arising from the effectiveness review in 2022:
Recommendation Actionstaken
Inductions: ensure appropriate time with senior
managers, advisers and site visits.
The induction process has been further developed and ensures the Board have more time with senior
managers and advisors. It is intended that there are at least three site visits and management meetings
per annum.
Senior Independent Director: consider this upcoming
change as part of future succession planning.
A short extension has been granted to the current Senior Independent Director, Terry Miller, to enable a
comprehensive and smooth transition of Terry’s duties to the next Senior Independent Director.
Stakeholders: greater consideration of views from
the management.
The Board receives regular reports from management which is incorporated into their reports to the
Board. The Board also receives regular updates from the Chair on progress and matters arising from the
Stakeholder Steering Committee (now incorporated into the ESG Committee) and Employee Forum as
well as sight of the minutes of those meetings. The ESG Committee was established.
Presentations from management: consider
expanding current participation of management in
plc Board meetings.
The Board receives exposure to the executive committee members and technical departmental heads at
the Strategy Awayday as well as site visits and regular management meetings.
Competitor analysis: expand business and
management presentations.
The Board receives regular reviews from the Finance Director and Investor Relations team regarding
competitor activity.
ESG: consider enhancing external communications
to demonstrate Board oversight.
ESG matters are embedded in the Group strategy and progress on targets and updates make up a
comprehensive part of the key financial statements and presentations of the Group. During the year
the Board established an ESG Committee dedicated to ESG related matters by merging its Stakeholder
Steering Committee and Carbon Reduction and Social Value Forum.
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Executive Board report
The Chief Executive chairs the Executive
Board, which is responsible for the Group’s
operational management under the terms
of reference set by the Board. This includes
making recommendations to the Board on
all matters reserved for Board authorisation.
The Executive Board focuses on long-term
strategic issues and matters of Group-wide
policy, with health, safety and sustainability
and business ethics being key agenda
items at every meeting, highlighting their
importance to the Group. The Executive
Board also receives and considers regular
performance and operational reports and
presentations from business management.
The minutes of Executive Board meetings
are included in the Board packs.
The Executive Board held 11 scheduled
meetings during the year. Additional
meetings are convened to consider and
authorise specific operational or project
matters. Meetings have taken place both
in-person and through hybrid/virtual
participation. Executive Board members
maintain a visible presence within the
business by holding meetings at regional
offices and visiting office and site locations.
Membership of the Executive Board is
detailed on pages 76 to 77. The Assistant
Company Secretary acts as Secretary to the
Executive Board.
Governance policies
The Group has a suite of governance and
risk management policies, procedures, and
training programmes, all of which address
the Group’s legal obligations. During the
financial year, the Executive Board reviewed
and refreshed the policies, procedures and
authority matrices under which the central
functions and businesses operate.
Reporting, risk, internal audit
and controls
The Governance review, starting on page
78, details the actions the Group took
during the financial year, including those
with a risk management focus. The Board’s
approach to risk and internal audit, including
its systems in relation to the preparation
of consolidated accounts, and the material
controls of the Group’s established internal
control framework, are disclosed in the Risk
management section on pages 52 to 54 and
further information can be found in the
Audit Committee Report on pages 94 to 95.
A separate programme of 10 internal
audits was also completed across
the Group’s operations, and progress
checks were completed against previous
recommendations.
Shareholder relations
The Chief Executive and Finance Director
continued to meet with existing and
prospective institutional shareholders
throughout the year. 81 meetings
were held with both shareholders and
non-holders. Meetings were held with
21 shareholders, who together represented
53% of the share register, as well as
meetings with 34 potential investors.
In addition, the management team
attended 4 investor conferences in the
year. Key areas of discussion included the
Company’s strategy and targets, dividend
policy, capital allocation, future pipeline
and ESG factors, as well as macro-economic
factors such as inflation. The Chair and
General Counsel & Company Secretary
also communicated and met with major
shareholders during the year.
The Finance Director has this year
continued to focus on building strong
investor relationships, engaging with a
third-party specialist advisory business to
schedule roadshows and provide further
research coverage, while Proactive Investors
and InvestorMeetCompany continue to
create digital content following news
updates, focusing on retail investors.
The Chair of the Remuneration Committee
and General Counsel & Company Secretary
sought feedback from key shareholders,
fund managers and proxy agents regarding
the proposed 2023 Remuneration Policy.
The Board as a whole continues to engage
actively with institutional shareholders,
in line with the Financial Reporting
Council’s UK Stewardship Code, on key
matters of relevance to the Group and its
operations, such as governance, strategy
or remuneration, or more general market
themes. Specific reports regarding
shareholder views are provided to the Board
for analysis and discussion. Separately, the
Chair, Senior Independent Director and
other Non-executive Directors are available
to attend meetings with shareholders
and address any significant concerns that
shareholders may have.
We plan to hold our 2023 AGM on Friday
10 November 2023 at the offices of Peel
Hunt LLP, 7th floor, 100 Liverpool Street,
London, EC2M 2AT at 11.00am. 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.
Compliance statement
The Group remains compliant with the
Financial Conduct Authority’s Listing
Rule 9.8.6 and Disclosure Guidance
and Transparency Rule 7.2.1. Related
information can be found in the Directors’
report on pages 117 to 120.
Additionally, the Group has complied with
sections 414CA and 414CB as well as 414C
of the Companies Act 2006. Relevant
information can be found throughout the
Strategic report and Governance section of
this Annual Report. The summary table on
page 43 in the Strategic report highlights
where non-financial information can be
found within this Annual Report.
Governance review continued
86
UK Corporate Governance Code compliance
As a premium listed company, the 2018 UK Corporate Governance Code (“Code”) sets the standards against which we measure ourselves.
The Board confirms that during the year ended 30 June 2023, the Board has applied the Principles and complied with all the Provisions of
the Code. In respect of the year ending 30 June 2024, as set out below, the Board expects that it will for a short period not comply with
Provision 10 in respect of Terry Miller who will remain on the Board and its Committees for a short extension past her nine year tenure to
enable a smooth and effective transition of the role of Chair of the Remuneration Committee to Sally Boyle, Non-executive Director. The
Board considers Terry Miller to remain independent during this extended period.
Principle HowweapplythePrinciple Furtherinformation
1. Board leadership and company purpose
A.TheBoard’srole
A successful company is led by an effective and
entrepreneurial Board, whose role is to promote
the long-term sustainable success of the company,
generating value for shareholders and contributing
to wider society.
The Board is collectively responsible for the long-term success of the Company,
including its relationships and engagement with shareholders and other
stakeholders, and operates via a formal schedule of matters reserved for its
decision. The externally facilitated Board and Committee evaluation carried out
in 2022 and internal evaluation carried out in 2023 concluded the Board and its
Committees were effective.
+ See pages 78 to
80 for further
information and list
of matters reserved
for the Board.
B.Settingpurpose,valuesandstrategy
The Board should establish the company’s purpose,
values and strategy, and satisfy itself that these
and its culture are aligned.
All directors must act with integrity, lead by
example and promote the desired culture.
The schedule of matters reserved for the Board, which is reviewed by the Board
annually, provides that the Board is responsible for establishing the values
and strategy of the Company. The Employee Forum chaired by Terry Miller,
Senior Independent Director, remains a key element in the Board’s oversight of
culture and engagement with employees. Our Code of Conduct also defines the
behaviours we expect of our people and the ethical standards to which
we adhere.
+ See our People and
Culture section on
pages 25 to 29 for
further information.
C.Riskmanagement
The Board should ensure that the necessary
resources are in place for the company to meet its
objectives and measure performance against them.
The Board should also establish a framework of
prudent and effective controls, which enable risk to
be assessed and managed.
The Board reviews and agrees the annual budget in July each year. In addition,
mature risk management and governance processes are in place to identify, report
and manage risk. These are kept under review to ensure they remain robust
and appropriate. The Executive Risk Committee assists the Board and Audit
Committee in monitoring and updating the Group’s principal and emerging risks
and regularly reports to the Board on its work.
+ See our Principal
risks section on
pages 52 to 56 for
further information.
+ More information
can also be found in
the Executive Board
report on page
86 and the Audit
Committee Report
(pages 94 to 97).
D.ShareholderandStakeholderengagement
In order for the company to meet its responsibilities
to shareholders and stakeholders, the Board should
ensure effective engagement with, and encourage
participation from, these parties.
The Executive Directors undertake regular meetings with shareholders
throughout the year and the Board receives an Investor Relations report at each
meeting. The Chair carries out engagements with shareholders on general matters
and matters of importance, as required, and invites questions from shareholders
at the AGM. The Stakeholder Steering Committee (now incorporated into the
ESG Committee) and Employee Forum continued to meet during the year. The
Committee oversees relationships with the business’s key stakeholders, including
collating stakeholder views and reporting these to the Board.
+ See the Managing
our stakeholder
relationships
section on pages
70 to 73 for further
information.
E.Workforcepolicies
The Board should ensure that workforce policies
and practices are consistent with the company’s
values and support its long-term sustainable
success. The workforce should be able to raise any
matters of concern.
The Code of Conduct ‘Doing the right thing’ sets out our organisational policies
and procedures and defines expected behaviours. Group policies define our
approach to managing health, safety, environmental and social matters affecting
our employees. These policies are regularly reviewed, published on our website
and described in our Annual Report. There is an independent and anonymous
whistleblowing procedure allowing any employee or third party to confidentially
raise concerns. The Audit Committee ensures the whistleblowing procedure
remains effective and that any matters reported are appropriately investigated
and resolved.
+ See our People and
Culture section on
pages 27 to 29 for
further information.
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Principle HowweapplythePrinciple Furtherinformation
2. Division of responsibilities
F.Chairleadership
The Chair leads the Board and is responsible for
its overall effectiveness in directing the company.
They should demonstrate objective judgement
throughout their tenure and promote a culture
of openness and debate. In addition, the Chair
facilitates constructive board relations and
the effective contribution of all Non-executive
directors, and ensures that directors receive
accurate, timely and clear information.
The Chair is responsible for leading the Board, setting the Group’s purpose,
direction and values, and ensuring the highest standards of corporate governance
are adhered to. In addition, the Chair facilitates constructive Board relations
and the effective contribution of all Non-executive directors and, in conjunction
with the General Counsel & Company Secretary, ensures that directors receive
accurate, timely and clear information. The Chair’s performance is assessed
through the annual Board evaluation process and through a separate annual
meeting of the Non-executive directors, led by the Senior Independent Director
without the Chair present.
+ See our Governance
review section on
page 78 for further
information.
G.BalanceoftheBoard
The Board should include an appropriate
combination of Executive and Non-executive (and
in particular, independent non-executive) directors,
such that no one individual or small group of
individuals dominates the Board’s decision-making.
There should be a clear division of responsibilities
between the leadership of the Board and the
Executive leadership of the company’s business.
The Board comprises the Chair (who was independent on appointment),
Chief Executive, Finance Director and four other independent non-executive
directors. The roles of the Chair and Chief Executive are separate with distinct
accountabilities set out in their role profiles. The Chief Executive is responsible
for the day-to-day executive leadership and management of the business through
defined delegated authority limits. The non-executive directors provide an
independent view on the running of our business, governance and boardroom
best practice. They oversee and, where necessary, constructively challenge
management in its implementation of strategy and Group performance.
+ See pages 76 to
77 for further
information.
H.NEDs’roleandtimecommitment
Non-executive directors should have sufficient time
to meet their Board responsibilities.
They should provide constructive challenge,
strategic guidance, offer specialist advice and
hold management to account.
The annual Board evaluation process continues to assess the performance
and effectiveness of all directors and their commitment to meeting their
Board responsibilities.
+ See the section on
Board Evaluation on
page 84 to 85 for
further information.
I.TheCompanySecretary
The Board, supported by the Company Secretary,
should ensure that it has the policies, processes,
information, time and resources it needs in order to
function effectively and efficiently.
The General Counsel & Company Secretary ensures that the Board receives
high-quality papers in a timely manner. He advises the Board on all governance
matters, including compliance with the Code. He works with the Chair and
Committee chairs to ensure that the right matters are escalated to the Board
and Committees at the appropriate time and that sufficient time is devoted to
strategic matters. He oversees Board induction and evaluation arrangements and
supports succession planning and recruitment of new Non-executive directors.
3. Composition, succession and evaluation
J.Boardappointments
Appointments to the Board should be subject to a
formal, rigorous and transparent procedure, and an
effective succession plan should be maintained for
Board and senior management. Both appointments
and succession plans should be based on merit and
objective criteria and, within this context, should
promote diversity of gender, social and ethnic
backgrounds, cognitive and personal strengths.
The Board followed a clear and formal process for appointing directors, which
was followed for the recruitment of Michael Topham during the year. This
appointment was in line with the Board’s succession plans, which were reviewed
and refreshed during the year. The Board and Executive management recognise
the importance of succession planning to overall business performance. Inclusion
and diversity are key drivers to the Group’s overall development plans.
+ See the Nomination
Committee report
on pages 90 to 93.
K.Skills,experienceandknowledge
The Board and its committees should have a
combination of skills, experience and knowledge.
Consideration should be given to the length of
service of the Board as a whole and membership
regularly refreshed.
The Nomination Committee regularly reviews the balance, composition, diversity
and structure of the Board, as well as the length of service of each Board member.
The Nomination Committee also makes recommendations about the
re-appointment of non-executive directors and any extensions to their term.
L.Boardevaluations
Annual evaluation of the Board should consider its
composition, diversity and how effectively members
work together to achieve objectives. Individual
evaluation should demonstrate whether each
director continues to contribute effectively.
The Board conducts an annual evaluation of its own performance and the
performance of its committees and individual directors. This year the Board
undertook an internally facilitated Board and Committee evaluation following the
completion of an externally facilitated evaluation last year.
+ Further information
can be found on
pages 84 to 85.
Governance review continued
88
Principle HowweapplythePrinciple Furtherinformation
4. Audit, risk and internal control
M.Financialreportingintegrity
The Board should establish formal and transparent
policies and procedures to ensure the independence
and effectiveness of internal and external audit
functions and satisfy itself on the integrity of
financial and narrative statements.
The Board delegates detailed oversight of the Group’s system of internal controls
to the Audit Committee, to ensure the integrity of the Group’s full year and half
year results and the Annual Report and Accounts. On the Audit Committee’s
recommendation, the Board reviewed and approved the 2022 half year and
full year results and the 2023 Annual Report. In addition, the Board evaluation
process confirmed the Board’s view that the Group’s system of internal controls
had operated effectively during the year. The Audit Committee reviews the
effectiveness of the external audit process on an annual basis.
+ See the Audit
Committee Report
on pages 94 to
97 for further
information.
N.Fair,balancedandunderstandableassessment
The Board should present a fair, balanced and
understandable assessment of the company’s
position and prospects.
The Audit Committee reviewed the 2023 Annual Report and Accounts
in September 2023 and was satisfied that it presents a fair, balanced and
understandable assessment of the Group’s position and prospects. The Audit
Committee reported its findings to the Board.
+ See the Audit
Committee Report
on pages 94 to
97 for further
information.
O.Riskmanagementandinternalcontrolframework
The Board should establish procedures to manage
risk, oversee the internal control framework, and
determine the nature and extent of the principal
risks the company is willing to take in order to
achieve its long-term strategic objectives.
The procedures for managing risk have continued to work well during the year.
Both the Executive Risk Committee and Audit Committee continually monitor the
Group’s risk management and internal control systems on the Board’s behalf. The
Executive Risk Committee (chaired by the General Counsel & Company Secretary)
reviews the Group’s principal and emerging risks and recommends any changes to
risk appetite to the Board. The Board regularly reviews the Group Risk Register.
+ See Our risk
management
process section on
pages 52 to 56 for
further information.
5. Remuneration
P.Supportingstrategyandlong-termsustainablesuccess
Remuneration policies and practices should be
designed to support strategy and promote long-
term sustainable success. Executive remuneration
should be aligned to company purpose and values,
and be clearly linked to the successful delivery of
the company’s long-term strategy.
The Remuneration Committee proposes the Group’s remuneration policy to the
Board for approval and the Directors’ remuneration report is put to an advisory
vote at the AGM, in line with statutory requirements. In accordance with section
439A of the Companies Act 2006, a new Remuneration Policy will be put to a
binding vote at the 2023 AGM and the Chair of the Remuneration Committee
and General Counsel & Company Secretary sought key stakeholder feedback
on the proposed 2023 Remuneration Policy. Shareholders approved the current
Remuneration Policy at the 2020 AGM. The Remuneration Committee continues
to review remuneration policies and practices to ensure they are aligned to the
Group’s long-term success and based on stretching performance metrics that
reflect shareholders’ interests.
+ See the
Remuneration
Committee Report
on pages 98 to 116.
Q.RemunerationPolicy
A formal and transparent procedure for developing
policy on Executive remuneration and determining
director and senior management remuneration
should be established. No director should be
involved in deciding their own remuneration
outcome.
The Remuneration Committee has continued to apply robust procedures
for determining executive remuneration, in line with the policy approved by
shareholders, and operates in accordance with its terms of reference. The
remuneration of non-executive directors is a matter for the Chair and the
executive directors. In determining executive director remuneration policy, the
Committee considers workforce remuneration, policies and incentives linked to
culture. No one can be involved in any discussion or decision about their own
remuneration.
+ The Remuneration
Policy can be found
on pages 102 to
108 within the
Remuneration
Report.
+ The Remuneration
Committee’s terms
of reference can
be found on our
website at https://
www.gallifordtry.
co.uk/about/
governance-and-
policies/.
R.Independenceofremunerationoutcomedecisions
Directors should exercise independent judgement
and discretion when authorising remuneration
outcomes, taking account of company and individual
performance, and wider circumstances.
The Remuneration Committee members are all independent non-executive
directors. The Committee takes advice from external remuneration consultants
and ensures that remuneration for Board and senior management is suitably
structured to attract, retain and motivate executives, and to link reward
to corporate and individual performance and all relevant internal and
external factors.
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Nomination Committee report
“ The Committee continued to evaluate the
skills, experience and diversity of the Board
and monitored robust succession planning
to further strengthen the long-term
effective delivery of Group strategy.”
Alison Wood
Nomination Committee Chair
This is my first year as Chair and
I am pleased to present my report
on the Nomination Committee’s
activities during the financial year
ended 30 June 2023.
I took over as Chair of the Board and this
Committee when Peter Ventress stepped
down in September 2022 and I would like to
take this opportunity to thank Peter for his
leadership of the Committee.
Following the decision of Gavin Slark
to step down in March 2023, having
served over seven years with the Group,
the primary focus for this year was to
continue Board succession planning. A
search was conducted for a new Non-
executive Director with the assistance of
the executive search firm, Russell Reynolds
Associates, ensuring a robust, rigorous and
transparent process was followed. The
search included an express requirement
to include a diverse range of candidates
to be available for the Nomination
Committee. I would like to thank Gavin for
his commitment, knowledge and guidance
to the Board and this Committee during his
tenure. As a result of the search and the
Committee’s deliberations, I am delighted to
welcome Michael Topham to the Board as a
Non-executive Director and member of this
Committee from 1 June 2023.
Composition and remit
The Committee’s membership is detailed
on pages 76 and 77. The General Counsel
& Company Secretary acts as Secretary
to the Committee. At the financial year
end, the Committee comprised a majority
of independent non-executive directors,
complying with provision 17 of the Code.
The Board has agreed to a limited extension
to the usual term of nine years for Terry
Miller, Senior Independent Director and
Chair of the Remuneration Committee,
to ensure the smooth transfer of the
key role of Chair of the Remuneration
Committee, and consider Terry to remain
independent in character and judgement
throughout this period.
During the year, the Committee reviewed
and updated its terms of reference in line
with best practice, requiring only minor
changes. The Committee’s current terms
of reference can be found on the Group’s
website (www.gallifordtry.co.uk).
TheBoardhasdelegatedthefollowing
principalauthoritiestotheCommittee:
+ Reviewing the Board’s size, structure and
composition.
+ Evaluating the Board’s balance of
skills, knowledge, diversity and
experience, including the impact of new
appointments.
+ Overseeing and recommending the
recruitment of any new directors.
+ Ensuring appointments are made against
objective criteria.
+ Keeping the Group’s leadership and
succession requirements under active
review.
Succession planning at levels below the
Executive Board remained a key area of
focus for the Committee during the financial
year. The Committee received updates
from the HR Director on progress with
implementing the Group’s succession plan,
with a focus on developing a diverse talent
pool of employees demonstrating high
potential for promotion. The ‘employee
retain and gain’ strategy was further
developed to ensure employees were
proactively engaged and trained to assist
staff retention levels.
Board appointments
Appointments to the Board are subject
to formal, rigorous and transparent
procedures. The Committee oversees, and
makes recommendations to the Board
on the identification, assessment, and
selection of candidates for appointment to
the Board. During the financial year there
was one appointment to the Board. Russell
Reynolds Associates was appointed to assist
the Committee with the search process.
Russel Reynolds Associates has no other
connection to Galliford Try or its directors.
The Committee agreed a brief based on the
capabilities, skills, diversity and experience
required on the Board and which would
support the business’s strategy.
During the financial year, the Committee
prioritised the key activities and areas of
focus set out opposite.
90
Calendar of 2022/23 Committee activities and areas of focus
2022
December
+ Monitor succession planning of leadership roles at
Executive level and below.
+ Review diversity and inclusion plans towards talent pipeline.
+ Non-executive Director Review.
2023
May
+ Review and appointment of new Non-executive Director
and ensure an effective induction programme.
+ Non-executive directors’ appointment review and
Committee membership.
+ Terms of reference review and approval.
Appointment process for new Non-executive Director – Michael Topham
The process for the selection of the new Non-executive Director, Michael Topham, included:
Background
Review
Candidateselection
Inductionprocess
Process
Interview process
Outcome
Gavin Slark, Non-executive Director, decides to step down after seven years on the Board due to other business commitments.
The Nomination Committee review the current board structure, composition, and skills of the Board and how these align to
delivering the current strategic plan. It is agreed another Non-executive Director should be sought.
The executive agency conducted a search and provided an extensive list of potential candidates. The Committee reviewed the list
and instructed preferred candidates to be approached to participate in the interview process.
A full and comprehensive induction programme is prepared for new Directors. This includes a range of separate internal meetings
with each Executive Board Director, the General Counsel & Company Secretary, members of the Executive Committee, as well as
other members of the senior leadership team. Site visits are also planned to meet local management and workforce and see the
application of health and safety matters. Meetings with key external advisors to also take place.
The Chair, Alison Wood, assisted by the General Counsel & Company Secretary, led the process to select a new Non-executive Director.
The executive recruitment agency,Russell Reynolds Associates was appointed to assist with the search process. Russel Reynolds
Associates (the executive agency) has no other connection to Galliford Try or its directors.
The Committee requested the search to include a diverse list of candidates in respect to gender, ethnicity and background and
agreed a brief based on the capabilities, skills, diversity and experience required on the Board and which would support the
business’s strategy. This included:
+ substantial experience in senior roles in major organisations;
+ a strong, professional background with recent and relevant experience in finance and commerce;
+ the capability to add value to Board discussions;
+ diversity and inclusion, culture and succession planning; and
+ a strong understanding of corporate governance.
Four preferred candidates were invited for first interviews, initially by the executive agency, then by the Chair.
The executive agency carried out further due diligence to ensure appropriate fit with requirements including experience and
knowledge of a range of Board topics, whether the appointment was in line with the Board’s diversity aims, and whether the
expected time commitment could be met.
Second interviews were held with three candidates who were introduced to the Chief Executive Officer, Finance Director and
General Counsel & Company Secretary.
Two short-listed candidates were interviewed by the Senior Independent Director and the two Non-executive Directors.
Detailed informal and formal references were obtained.
Having considered the specifications of the new Non-executive Director, the strategic requirements of the business and the skills
and experience of the short-listed candidates, the Committee recommended the successful candidate, Michael Topham, to the
Board for appointment. Michael Topham met the search criteria due to his substantial experience in senior management roles
including that currently of Chief Executive Officer of Biffa, where he was also previously Chief Financial Officer, as well as having
held a number of divisional managing director and finance roles; Michael has experience in delivering strategic growth which
aligns to the Group’s strategy and has the experience and capability of adding to Board discussions; Michael also has corporate
governance understanding and will bring independence and strong governance skills to the Board.
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Review of the
Board’s composition
The Committee reviews the composition of
the Board and its Committees at least annually
as part of the Board evaluation process. The
Committee considered the balance of skills,
experience, knowledge and diversity of
opinion of the Non-executive Directors, their
time commitments and succession plans to
ensure they remain suitable for the Group’s
structure, strategy and objectives. Given
the size and structure of our Group, the
composition and size of the Board and its
committees remains appropriate. Further
details on the Board evaluation and its
outcomes can be found on pages 84 to 85.
To ensure a smooth transition of the
important role of Chair of the Remuneration
Committee, the Committee previously agreed
that Terry Miller will remain on the Board
in her current roles until October 2023,
which is beyond the normal term of nine
years. The Board and Committee consider
that this limited extension to Terry’s term of
office to be appropriate and Terry will remain
independent in character and judgement.
The Board and its
Committees’ Evaluation
The Board and its Committee’s internally
facilitated evaluation was carried out during
the year and identified a small number of
actions for the Committee to undertake
including monitoring the cohesive
functioning and interaction of the Board
following the introduction of new members
and the need to maintain its approach to the
monitoring of the correct balance of skills,
leadership succession and development
plans as strategy evolves. The evaluation
concluded the Committee remains effective.
Culture of Equity, Diversity
and Inclusion
A key focus for the Committee is continuing
to ensure Equity, Diversity and Inclusion
(EDI) is embedded into our Sustainable
Growth Strategy to provide a supportive
and progressive culture for all. It fully
supports the recent addition of the inclusion
and diversity disclosures in the Listing
Rules and ensures inclusion and diversity is
considered in all its policies and practices.
During the year the Group developed
new initiatives such as creating a new and
dedicated inclusion team within the HR
function to further develop our approach
in this area and also partnered with Clear
Company, an external HR specialist, to
help remove any potential barriers to our
recruitment and retention practices.
The Group has a range of inclusion and
diversity initiatives, including action plans
and agile working arrangements, with a
flexible culture and working practices to
suit everybody’s needs. The Group also
takes part in industry and other initiatives
to improve inclusion and diversity, including
supporting the National Association for
Women in Construction, the Leadership &
Diversity Group Scotland, and the Supplier
Diversity Group.
Galliford Try is an accredited Disability
Confident Employer. This Government
initiative aims to challenge attitudes towards
disability, remove barriers to employment
for disabled people and those with long-
term health conditions, and ensure that
disabled people have the opportunities
to fulfil their potential and realise
their aspirations.
The increased focus of our approach to
EDI for the wider workforce, the additional
work being undertaken in this area and
the gender balance at Board and senior
management level is reported in the People
and culture section on pages 25 to 29.
Statement on Compliance of
Board and Committee Gender
and Ethnic Diversity
EDI is a key consideration when assessing
the Board’s composition and that of its
Committees, as well as the wider Group,
to ensure the development of a diverse
pipeline for succession. The Committee
has worked hard to ensure the Board is
sufficiently diverse to meet and support its
future strategic developments. The Board
considers a broad definition of diversity
when setting policies and appointing
directors which includes: ethnicity, religion,
socio-economic background, gender
and sexual orientation, age, disability,
partnership status, culture, personality and
professional experience.
The Board confirms that as at 30 June 2023
(being the reference date selected by the
Board for the purposes of this disclosure)
the Company has complied with the gender
diversity targets of Listing Rule 9.8.6R(9)
and the FTSE Women Leaders Review. 57%
of the individuals on its Board are women
and so meets the rule of at least 40% of
the Board are female as well as holding two
senior Board positions, those of the Chair
and the Senior Independent Director.
Nomination Committee report continued
Board and Executive Management Gender Identity Table
Numberof
boardmembers
Percentage
oftheboard
Numberof
seniorpositions
ontheboard(CEO,
CFO,SIDandChair)
Numberinexecutive
management
1
Percentage
ofexecutive
management
1
Men 3 43 2 3 75
Women 4 57 2 1 25
1 Those included in the Number in the Executive Management consist of those who make up the Executive Committee but who are not Board members.
BoardandExecutiveManagementEthnicIdentityTable
Numberof
boardmembers
Percentage
oftheboard
Numberof
seniorpositions
ontheboard(CEO,
CFO,SIDandChair)
Numberinexecutive
management
1
Percentage
ofexecutive
management
1
White British or other White (including
minority-white groups) 7 100 4 4 100
1 Those included in the Number in the Executive Management consist of those who make up the Executive Committee but who are not Board members.
92
The Committee notes the Parker Review
and the ethnicity diversity targets of Listing
Rule 9.8.6R(9) and acknowledges that
further work is required for the Board and
its Committees to become more ethnically
diverse. In order to develop a truly diverse
culture the Board and its Committees
recognises it needs to set the tone from
the top and become more proportionately
representative of its workforce and the
stakeholders it serves. New initiatives
have been developed to increase ethnic
diversity for the wider workforce as detailed
on pages 28 to 29 and the Committee
understands that to attract and retain its
workforce and develop a diverse pipeline
to its senior management, it must make
every effort to break down barriers and
support the progression of ethnic minorities
in the industry.
The Company does not presently meet the
Listing Rule 9.8.6R(9) ethnicity target for
Board members and senior management
of at least one individual on its Board
from a minority ethnic background. In its
most recent search for a Non-executive
Director, the Committee expressly sought
and took steps to identify candidates from
an ethnic background. The Committee also
deliberated on the search findings prior to
making any appointment.
In order to collect the data for the gender
and ethnic diversity disclosures, the Board
and its senior management team were
each sent a series of questions to complete
asking how they self-identify in each
of the designated categories under the
Listing Rules disclosure. This data was then
collected with results recorded and retained
for future records.
Alison Wood
Nomination Committee Chair
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Audit Committee report
“The work of the Audit Committee plays
a vital role in the Group’s governance
framework by ensuring the internal and
external audit functions remain effective,
the integrity of the financial statements is
maintained and robust risk management
and internal controls are in place.”
Marisa Cassoni
Audit Committee Chair
I am pleased to present my report
for 2023 as Chair of the Audit
Committee.
Throughout the year the Audit Committee
(Committee) continued to support the
Board in fulfilling its corporate governance
responsibilities, including monitoring and
reviewing developments in corporate
governance, overseeing the internal audit
process, and assessing the integrity of the
financial statements and the adequacy and
effectiveness of the risk management and
internal control framework of the Group.
Composition of the Committee
All Committee members are independent
Non-executive Directors. Additional details
on the Committee’s members can be found
on pages 76 and 77.
The Committee has continued to ensure
that each member has sufficient knowledge,
training and expertise to contribute
effectively to the Committee’s work, which
is a key requirement of Provision 24 of the
Code and the FRC’s Guidance on Audit
Committees. The Board remains satisfied
that, as a whole, the Committee has
competence relevant to the sector in which
the Group operates.
As Committee Chair, I have extensive
experience in numerous roles, which include
Group Finance Director of the John Lewis
Partnership, Royal Mail Group, Britannic
Assurance Group and Prudential UK Group.
I also have experience of being a Non-
executive Director with Skipton Building
Society, AO World plc and Ei Group plc.
I would like to thank Gavin Slark, who
stepped down from this Committee on
31 March 2023, for his commitment and
the significant contribution made during
his tenure. Having joined the Committee
on appointment in 2015, Gavin brought
valuable and extensive commercial
experience gained in a variety of executive
level roles.
I would also like to welcome Michael
Topham who joined the Board as a Non-
executive Director and a member of this
Committee on 1 June 2023. Michael is the
Chief Executive Officer of Biffa and has
proven abilities to develop and acquire
companies to deliver sustainable growth.
Previously Michael was Chief Financial
Officer of Biffa and has held various
divisional managing director and finance
director roles within the waste management
sector. Michael is also a Chartered
Accountant having trained with PwC.
Michael is also a director of Environmental
Services Association Limited.
The Chair of the Board, Chief Executive
and Finance Director attend Committee
meetings by invitation, together with the
Head of Internal Audit and the Group
Financial Controller. The General Counsel &
Company Secretary, or his delegate, acts as
Secretary to the Committee.
Remit and activities
The Committee met three times during
the year, which it deems appropriate to its
role and responsibilities. The Committee’s
delegated authorities and calendar
of prioritised work have not changed
substantially from those disclosed in
previous years and remain in line with the
Code’s requirements.
The Committee’s key responsibilities are:
+ delegated responsibility from the Board
for financial reporting;
+ monitoring external audit, internal audit,
risk and controls; and
+ reviewing instances of whistleblowing
and the Group’s procedures for detecting
fraud.
The Committee’s key activities during the
financial year are summarised overleaf. The
Committee also continues to meet with
internal and external audit teams, without
Executive management present, in order to
discuss any matters which the auditor may
wish to raise in confidence.
Internal Management System
Galliford Try is implementing a new internal
system which will deliver modern, simplified
ways of working for our people, commercial,
finance and procurement processes.
This will allow the Company to be a more
people focused workplace by simplifying
processes, modernising our ways of
working, provide added data transparency
and driving efficiency.
The Committee’s terms of reference
are available from the Group’s website
(www.gallifordtry.co.uk).
94
Calendar of 2022/23
Committee activities
and areas of focus
2022
September
+ Contract accounting judgements.
+ Committee review of 2021/22
full-year results, including
external auditor presentation,
going concern review and
approval of ‘fair, balanced and
understandable’ process.
+ Review of draft 2022 annual
results statement and draft
external audit opinion.
+ Risk, internal audit and
whistleblowing reports.
+ Presentation of external review
of internal audit effectiveness.
+ Considered BEIS white paper on
corporate reform.
2023
March
+ Contract accounting judgements.
+ Committee review of 2022/23
half-year results, including
external auditor presentation,
going concern review and
approval of the ‘fair, balanced and
understandable’ process.
+ Reflections on the 2022 audit.
+ Review of draft half-year 2023
results statement.
+ Risk, internal audit and
whistleblowing reports.
May
+ Review and approval of the
Internal Audit Plan 2023/24.
+ Approval of the external
audit plan.
+ External quality
assessment update.
+ Anti-money laundering update.
+ Risk, internal audit and
whistleblowing reports.
+ Review of Terms of Reference
and Non-Audit fee policy.
+ Update and internal progress
review on the UK and
Governance Reforms by the
Department for Business and
Trade (formerly BEIS).
Committee Evaluation
The performance of the Committee was
reviewed as part of the internal facilitated
Board evaluation process aimed at
identifying any areas for improvement.
A small number of actions arose from
the process including strengthening
working relations with BDO. Overall the
Committee was deemed to be effective
and contributed strongly to the Group’s
overall governance framework.
Please see pages 84 to 85 for further information.
InternalProgressonDepartmentfor
BusinessandTrade–RestoringTrustin
Audit and Corporate Governance
The Committee recognises the importance
of the consultation and work by the
Department for Business and Trade
(formerly the Department for Business,
Energy & Industrial Strategy (BEIS)
regarding restoring trust in Audit and
Corporate Governance. A summary of the
Government’s response was presented to
the Board in July 2022 for discussion and,
whilst further guidance and clarity on key
matters is awaited, further internal work
in this area is continuing in anticipation
of likely changes that will require to be
implemented. Such work includes setting
up a working group to review scoping,
project planning and to test the operating
effectiveness of our internal controls,
scenario planning and stress testing for
resilience and strengthening the processes
already in place.
External audit
The Company’s external auditor is
BDO LLP and is led by the audit partner
Edward Goodworth who has been a partner
at BDO LLP for 11 years. The appointment
of BDO LLP followed an audit tender
process undertaken in the second half
of 2018 and was subsequently approved
by shareholders.
The audit plan is submitted annually and is
approved by the Committee. The Committee
meets privately with the auditor, and the
Chair of the Committee speaks regularly
with the audit partner throughout the year.
Each year, the Committee assesses the
independence and effectiveness of the
external audit process, which includes
discussing feedback from the members of
the Committee and key senior management
within the Group and from regulatory
sources. The Committee is satisfied that
the external audit relationship is effective
and that BDO LLP remained sufficiently
independent in accordance with the
relevant professional ethical standards.
A resolution is to be proposed at the
forthcoming AGM for the re-appointment of
BDO LLP as auditor of the Group, at a rate
of remuneration to be determined by the
Audit Committee.
Internal audit
Each year, the Committee reviews and
approves the scope of work of the Internal
Audit team, which includes assessing the
adequacy of the team’s resources.
During the financial year, the Internal Audit
team continued to deliver its agreed internal
audit annual plan and provided commercial
and risk management support across the
Group, at the request of the Committee, the
Executive Board and senior management.
Biannual status reports on commercial
health checks, based on a typical sample of
12 contracts from across the business, are
reported to the Audit Committee. Projects
included in commercial health checks
provide a representative mix of business
units, project values, current commercial
performance and stage of completion.
Review of Risks
The Executive Risk Committee reviews the
Group’s risks and reports to the Executive
Board and the plc Board. In addition, the
Executive Risk Committee has continued to
review the procedures in place to identify
emerging risks, as well as its disclosure
obligations. The Executive Risk Committee
has a standing agenda item at its meetings
to review and document emerging risk
themes that could have a significant
impact on our business. The Executive Risk
Committee has also reviewed the climate-
related risks and opportunities, in support of
our Task Force on Climate-Related Financial
Disclosures (TCFD). More information
about the Group’s principal risks, its process
of identifying and managing emerging
risks, its long-term viability and its risk
management systems can be found in the
Risk management section on pages 52 to 56.
In line with the Code’s requirements, the
Board carries out an annual assessment
of the effectiveness of the Group’s risk
management and internal control systems
prior to approving the full-year results. This
review covers material controls, including
financial, operational and compliance
controls. In addition, the Head of Internal
Audit provides an Internal Audit Report to
the Audit Committee at each Committee
meeting, which includes the status of audits
from the agreed internal audit plan and
implementation of agreed actions.
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Non-audit services
The Group has policies and review
mechanisms governing the provision
of material non-audit services and
safeguarding the objectivity and
independence of the external auditor.
These remained in force throughout the
financial year. The policy specifies: the
types of non-audit services for which the
use of the external auditor is pre-approved
(i.e. approval has been given in advance as
a matter of policy); the services for which
specific approval from the Committee is
required before the auditor is contracted;
and the services from which the external
auditor is excluded. In respect of pre-
approved services, a financial threshold
is in place of £75,000, applicable to
individual and aggregated services in any
year. Furthermore, should the total value
of non-audit service engagements exceed
the defined percentage of 50% of the total
Group audit fee for the previous financial
year, the Committee shall consider and give
specific prior approval for any subsequent
non-audit service engagements in excess
of £30,000.
Internal control framework
The day-to-day management of our principal
risks is supported by an internal control
framework which is embedded in our
management and operational processes.
The most significant elements of the
Group’s internal control framework include
the following:
+ Organisationalstructure:each business
unit is led by a managing director and
management team, providing a clear
hierarchy and accountabilities.
+ CodeofConduct:the Group promotes
a culture of acting ethically and with
demonstrable integrity. Our ethical
standards and approach are set out
in ‘Doing the right thing’, our Code of
Conduct. It is supported by training
modules and its themes and importance
are communicated to new starters as
part of their induction.
+ Contractualreviewandcommitments:
the Group has policies and procedures
for entering into contracts which apply
across its business units and operations
and are enforced through the Group’s
legal authorities matrix.
+ Operationalactivity:site operations
are performed in line with established
business management systems
and processes that incorporate all
operational activities, including health,
safety and environmental procedures,
regular performance monitoring,
quality management and external
accountability to stakeholders.
+ Financialplanningframework:a detailed
annual budget is prepared for each
financial year, which is approved by
the Board.
+ Operationalandfinancialreporting:
an exacting profit and cash reporting
and forecasting regime is in place across
the Group. This emphasises cash flow,
income and balance sheet reporting, as
well as health, safety and environmental
matters within monthly operational
reports.
+ Internalaudit:the Internal Audit
team develops and delivers an annual
programme of internal audits, which
includes business unit key control
reviews, audits of Group processes and
other specific risk areas and reviews of
significant change programmes.
+ Assurance provided by non-audit
functions:a number of other Group
functions provide assurance in
areas including, but not limited to,
health, safety and environment, legal
contract reviews and compliance, and
construction industry regulation.
Significant issues and other
accounting judgements
The Committee reviewed the integrity
of the Group’s financial statements and
all formal announcements relating to the
Group’s financial performance. This included
an assessment of each critical accounting
policy, as set out in note 1 to the financial
statements, as well as review and debate on
the following areas of significance:
+ Contractrevenueandprovisions: in
conjunction with the annual audit,
the Committee continued to review
key judgments in respect of revenue
recognition and contract provisions, in
relation to certain significant long-term
construction contracts.
+ Goingconcernandviability:the
Committee considered other commercial
and economic risks to the Group’s going
concern status and longer-term viability
and reported to the Board on its findings.
+ Significanttransactions:the Committee
has given particular consideration to
the accounting for and presentation of
individually significant transactions, and
areas where alternative performance
measures are required to ensure that
the financial statements give a fair,
balanced and understandable view of
the Group’s performance, and that
statutory measures are equally clear
and prominent. This specifically included
the presentation of the investment in
cloud-based commercial and accounting
systems, which has been reported as
an exceptional cost, and disclosure of
the settlement of a long-running
contract dispute.
+ PPPportfoliovaluation:the Committee
reviewed the discount rate used to
determine the fair value of each of the
Group’s PPP investments.
Audit Committee report continued
96
External legal advisors review the annual report Governance
Section draft to ensure compliance.
Fair, balanced and understandable consideration
The Board considers the Committee’s recommendation that the
Fair, Balanced and Understandable statement be applied to the
2023 Annual Report and financial statements.
The Audit Committee, once satisfied the requirements have been met,
recommends that the Fair, Balanced and Understandable review process
is recommended for approval at its September meeting.
Management prepare a paper to the Audit Committee setting out
key judgements in preparing the annual report, and how such matters
are disclosed.
The draft annual report, with details of any significant changes to the report
from previous years, are provided to the Audit Committee members in advance
for consideration and review.
The General Counsel & Company Secretary and Finance Director take responsibility
to ensure that the balance of information provided is consistent with the balance of
discussions at the plc Board.
Management consider key judgements and significant changes,
and how such matters should be disclosed.
Management prepare drafts of the annual report for internal consideration
by process owners and external advisors for comment and discussion.
The Board approved the Committee’s recommendation that the Fair, Balanced and Understandable statement could be applied to the
2023 Annual Report and financial statements and this can be found in the Director’s report on page 120.
Marisa Cassoni
Audit Committee Chair
As requested by the Board and in line with its terms of reference, the Committee has reviewed the 2023 Annual Report and financial
statements and considered whether, in terms of the form and content of the strategic, governance and financial information taken as a
whole, it is fair, balanced and understandable and enables current and prospective shareholders to assess the Company’s position with
respect to its performance, business model and strategy. The process which was followed was:
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Financial statementsGovernanceStrategic report
Galliford Try Annual Report and Financial Statements 2023
Remuneration Committee report
“ The Remuneration Committee has fully
reviewed the Group’s current Remuneration
Policy and considered shareholder views,
market analysis and best practice to develop
a new Policy which continues to support and
be aligned to Group strategy for proposing
to shareholders at the 2023 AGM.”
Terry Miller
Remuneration Committee Chair
Committee Chair’s annual
statement
This is my last year as Chair of the
Remuneration Committee (the Committee)
and, along with the rest of the Committee,
I am pleased to have overseen the
development of a new Policy to be
proposed at the 2023 AGM. During the year
I also worked closely with Sally Boyle, my
successor, to ensure a smooth transition
when I step down in October 2023. Sally’s
experience in executive management
remuneration will make her an excellent
Committee Chair.
On behalf of the Board, I am pleased to
present the Directors’ Remuneration Report
for the financial year ended 30 June 2023.
The Remuneration Report which sets out
the proposed 2023 Policy is divided into
three parts: this Annual Statement; the
Directors’ Remuneration Policy; and an
Annual Report on Remuneration, which
sets out how the 2023 Policy will be applied
during the year ending 30 June 2024 as
well as how the current Policy was applied
during the year ended 30 June 2023.
The background to the Remuneration
Report is that the Group has continued to
build on its Sustainable Growth Strategy,
including the acquisition of two businesses
during the year, and despite the macro-
economic headwinds, delivered another
year of improved operational and strong
financial performance. In line with the
rules of the Annual Bonus Plan (“ABP”)
the Committee has therefore approved
payments for the year ended 30 June 2023
at 70% of maximum. For the Long Term
Incentive Plan (“LTIP”), the Committee
has approved the vesting of awards
granted to Executives under the LTIP in
September 2020. Based on performance
up to the financial year ended 30 June
2023, 97% of the September 2020 LTIP
will vest on 23 September 2023, three
years after grant. All awards are fully in
accordance with the Remuneration Policy
approved by shareholders. Further details
of remuneration, in accordance with the
shareholder approved Remuneration Policy,
can be found overleaf.
During the year, the Committee primarily
focused on the review and development of
the new 2023 Policy, supported employees
during the high inflation period with an
average annual salary award of 5%, as well as
delivering support to circa 1,800 employees
through a one-off payment in October
2022. In addition, the Committee focused
on embedding ESG performance metrics
introduced last year in the annual bonus
plan, recognising the importance of ESG
factors to the fulfilment of the Company’s
strategic objectives and to all stakeholders
and continued to ensure compliance with
corporate governance practices.
The Committee has continued to apply the
recommendations of the UK Corporate
Governance Code and decisions relating
to remuneration matters are set out in the
relevant sections of this report. This report
has been prepared in accordance with
the relevant provisions of the Companies
Act 2006, The Companies (Director’s
Remuneration Policy and Directors’
Remuneration Report) Regulations 2019,
the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations
(Amended) 2013 and the Financial Conduct
Authority’s Listing Rules.
98
Calendar of 2022/23
Committee activities
and areas of focus
2022
July
+ Review of corporate governance
developments in executive
remuneration.
+ Proposal of performance metrics
for LTIP 2022 grant of awards.
+ Update on 2021/22 annual
bonus forecast, performance and
proposal of 2022/23 annual bonus
scheme.
+ Consideration of bonus discretion
and Committee guidance.
+ Long Term Bonus Plan (for roles
below Executive Board level) and
Interim Award 2022 proposals.
+ Review of draft 2022 Directors’
Remuneration Report.
September
+ Consideration of 2022 Long Term
Incentive and Bonus Plan awards.
+ Review of 2021/22 annual bonus
performance to 30 June 2022.
+ Approval of the 2022 Directors’
Remuneration Report.
+ Approval of Employee Share Trust
purchase programme.
2023
March
+ 2023 salary and benefits review
(effective 1 April 2023).
+ 2023 Policy Review.
+ Shareholder consultation for New
2023 Remuneration Policy.
+ Review of Terms of Reference.
+ Employee Share Trust update.
+ Briefing from the HR Director
on remuneration and other
considerations for the wider
workforce.
Board and Committee changes
As announced in September 2022, I will
be stepping down from the Board and
its Committees in October 2023 and am
delighted that Sally Boyle, Non-executive
Director, who brings a wealth of HR related
experience from previous positions, will be
my successor. Sally has been a member of
the Committee since 1 May 2022. To enable
a smooth and effective transition of this
key role, and as previously disclosed, I will
remain on the Board and Committee for a
short period past my nine year tenure and
the Board considers this does not affect my
independence and judgement in the role.
Michael Topham joined the Board and
Committee on 1 June 2023. Peter Ventress
ceased to be a member of the Committee
on 21 September 2022, when he stepped
down from the Board and on 31 March
2023, Gavin Slark, Non-executive Director,
resigned from the Board and Committee.
I would like to thank Peter and Gavin for
their commitment and contribution to the
Committee throughout their tenure.
Remuneration Policy Review
The Committee reviewed the Group’s
existing policy and formulation of the 2023
Policy. The review took into account market
and corporate governance best practices
and feedback from shareholders and other
key stakeholders. The Committee considers
the existing policy and structure comprising
of base salary, pension, benefits, annual
bonus and LTIP to remain appropriate
and, as previously designed, is already
aligned to recent developments with best
market practice. The Committee also took
into account that the existing policy was
approved by 99.66% of shareholders who
voted at the 2020 AGM. Accordingly,
there are no material changes or
recommendations to the 2023 Policy, which
will be subject to a binding vote at the AGM
on 10 November 2023. The full Policy is set
out on pages 102 to 108.
Application of Remuneration
Policy in 2023/24
The key elements of how the Policy is being
applied are set out below:
+ Basesalaries:The Committee continues
to monitor and review pay and
conditions across the Group and the
external market. Taking into account
the rising cost of living and external
market conditions, a budget of 5.0%
was approved for annual staff salary
increases across the Group from 1
April 2023. Bill Hocking and Andrew
Duxbury’s salaries were each increased
by 4.53% from 1 April 2023, an
adjustment below the average increase
awarded across the workforce.
+ AnnualBonusPlan(“ABP”):the
scorecard for the Annual Bonus Plan
for 2023/24 is in line with the 2022/23
scorecard and will continue to include
ESG metrics introduced last year. All
bonus awards will be subject to the
Committee’s discretion, taking into
account health and safety performance
and the underlying performance of the
Group. 2023/24 targets will be disclosed
as usual in the 2024 Annual Report.
+ LTIP:no changes to metrics or structure
are proposed for the 2023 awards.
The metrics will continue to comprise
earnings per share (“EPS”) and average
cash management.
As well as the vote on Policy, there will
be an advisory vote at the AGM in
November 2023, on the Directors’
Remuneration Report.
Cost of living
A one-off payment to provide support to
employees during the national cost of living
challenge of circa £1.0m in total to over
1,800 employees was made in October
2022 and was warmly welcomed by all staff.
Terry Miller
Remuneration Committee Chair
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Remuneration Committee report continued
Remuneration at a glance
The following is a summary of the Executive Directors’
remuneration in 2022/2023 and proposed application
of the approved Remuneration Policy (“Policy”).
Remuneration Policy and
framework
Our approach to remuneration and our
Policy are set out on pages 98 to 113 of
this report. The elements of executive
directors’ remuneration are:
+ Fixedelement:comprises base
salary, taxable benefits (such as a
company car or cash equivalent
allowance, private medical and
permanent health insurance, and
life assurance), and contribution to
a pension.
+ Variableelement:annual bonus,
which incentivises and rewards
the achievement of stretching
annual targets (both financial
and non-financial) that support
the Group’s annual and strategic
objectives, with two-thirds of any
bonus earned in excess of 50% of
salary required to be deferred into
restricted shares.
+ Long-termelement:the LTIP
incentivises the achievement of
sustained long-term financial and
operational performance over a
three-year performance period. Any
share awards that vest are subject
to a two-year holding period.
Actual remuneration in 2022/23
The following table summarises the executive directors’ remuneration in 2022/23:
Director Role
Fixed
remuneration
1
£000
Variable
remuneration
2
£000
Totalremuneration
£000
Bill Hocking Chief Executive 521 1,908 2,429
Andrew Duxbury Finance Director 416 1,496 1,912
1 Comprises base salary, taxable benefits and pension contributions. See page 109 for further information.
2 Comprises annual bonus awarded and LTIP vesting with reference to performance during the financial year.
See pages 110 to 111 for further information.
Variable pay outcomes
AnnualBonuspaymentsfor2022/23
The annual bonus payments made to the Executive Directors are summarised in the table
below.
Director
Maximumbonus
(%ofsalary)
1
Achieved bonus
(%ofsalary)
1
Cash£000 Shares£000
Bill Hocking 120% 84.5% £292 £109
Andrew Duxbury 100% 70.4% £219 £53
1 See page 110 for further information.
LTIP outcomes
Vestingsrelatingto2020to2023performance
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 in the final year to 30 June 2023. The estimated September
2023 vesting is summarised below:
StretchEPS
condition
ActualEPS
performance
Stretch
average
month-
end cash
1
condition
Actual
average
month-
end cash
1
performance %Vesting
Valueof
award
vesting
2
Bill Hocking 15.4p 16.6p 10% 9.7% 97. 2% 1,507
Andrew Duxbury 15.4p 16.6p 10% 9.7% 97.2% 1,224
1 As a percentage of annual turnover.
2 Estimated based on the average share price over the three months to 30 June 2023.
100
Application of the New 2023 Policy in 2023/2024
Element BillHocking Andrew Duxbury
Basesalary £496,500 £403,500
Pension 8% 6%
ABP Maximum bonus opportunity of 120% of salary for the Chief Executive and 100% of salary for other executive directors.
LTIP Award of up to 150% of salary, with three quarters based on earnings per share and one quarter on a cash performance metric,
measured as an average month-end cash as a percentage of revenue.
Performancetargets EPS: The target EPS to be achieved in the final year of the performance period (1 July 2025 to 30 June 2026) is 31.8p. Achieving
28.6p would generate 25% vesting and 34.5p would generate 100% vesting on a straight-line basis.
Cash: The target is average month-end cash in the final year of the performance period of 9% of annual turnover. Achieving 8% would
generate 25% vesting and 10% would generate 100% vesting on a straight-line basis.
Holding period Any vested LTIP shares must be held for two years after vesting (after payment of tax).
Malusandclawback Malus and clawback apply in circumstances of error, material misstatement, misconduct, reputational damage or corporate failure as a
result of poor risk management.
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Remuneration Committee report continued
Directors’ Remuneration Policy
The main objectives of the Group’s
Remuneration Policy are to:
+ ensure that remuneration packages are
appropriately positioned and structured
to promote a Sustainable Growth
Strategy for all stakeholders and which
takes into account pay and conditions
across the Group, current conditions and
market practice;
+ engender an inclusive and progressive
culture, which enables all individuals
to reach their potential and positions
Galliford Try as an employer of choice;
+ deliver a significant proportion of total
executive pay through performance-
related remuneration and in shares; and
+ ensure the achievement of strong
and sustained long-term financial and
operational performance with no reward
for failure.
This section of the report sets out the new Remuneration
Policy (New 2023 Policy) that will be proposed to
shareholders at the 2023 AGM, describing the framework
within which the Group remunerates its directors.
The increased importance of ESG and
climate-related factors to the strategy of
the Group and all its stakeholders means
the proposed New 2023 Policy continues
to take into account environmental, social
and governance factors, and includes the
ESG and climate-related performance
targets which were added to the Executive
team’s ABP from 1 July 2022 to encourage
responsible ESG behaviour. Furthermore,
recognising that even well-designed
incentives cannot cater for all eventualities,
should any unforeseen issues arise that
would make any payments unjustifiable,
the Committee may use its discretion to
address such outcomes by scaling back
payments. Any use of such discretion
would be fully disclosed in the Annual
report on remuneration.
The Committee operates clawback
provisions within both the ABP and
LTIP, which facilitate the retrieval of
payments made to directors and executive
management in circumstances of error,
material misstatement, misconduct, and
for awards from 2022/23 in respect of
reputational damage or corporate failure
as a result of poor risk management.
As part of the New 2023 Policy review,
the Committee consulted with our largest
shareholders and proxy voting agencies.
Strategy, culture and pay philosophy across
the Group, best practice and governance
developments were all taken into account
when formulating the proposed changes to
the current policy. After a comprehensive
and full review, and taking into account
changes implemented during the last three
years and the strong support (99.66%) for
the policy at the 2020 AGM, it was agreed
there were no key changes required to be
made to the previous policy to allow the
New 2023 Policy to be implemented.
A summary of the New 2023 Policy is
outlined below.
New 2023 Policy
The current policy was subject to a binding
shareholder vote at the 2020 AGM of
Galliford Try Holdings plc and was approved
by 99.66% of shareholders who voted.
The three-year life of that Policy will expire
at the 2023 AGM and we are required to
seek binding shareholder approval for a
new Policy.
102
The proposed New 2023 Policy is detailed in the table below and contains no significant changes to the Policy agreed in 2020:
Componentand
link to strategy Operation
Frameworktoassessperformance
andmaximumopportunity
Salary
To provide a competitive
and appropriate level of
basic fixed pay, sufficient
to attract, motivate
and retain executive
directors of high calibre,
able to develop and
execute the Group’s
strategy.
Normally reviewed annually, with any changes typically taking
effect from 1 April.
The Committee sets salaries at competitive rates, taking into
consideration pay and employment conditions across the
Group, the economic environment, the responsibilities and
accountabilities of each role, the experience of each individual,
his or her marketability and the Group’s key dependencies on
the individual.
Reference is also made to salary levels among relevant
construction peers and, other companies of broadly similar size
and complexity.
The Committee reserves the right to reduce salary levels (and
has done so in the past) if the circumstances warrant it.
When reviewing salaries, both Group and individual performance
are considered.
While there is no prescribed maximum, the Committee’s policy
on salary increases for executive directors is for increases to be
broadly in line with the average across the workforce, unless
there is a promotion or material change in role or business
circumstances in which case increases may be higher.
Salaries for the year ahead are set out in the Annual Report on
Remuneration.
Benefits
To provide cost-
effective and market-
competitive benefits.
Benefits provided to executive directors may include
entitlements to a Company car or cash equivalent allowance,
private medical and permanent health insurance, and life
assurance.
The benefits provided may be subject to minor amendment
from time to time by the Committee and Executive Directors
may be allowed to participate in any new benefit plan
introduced for the wider workforce on equivalent terms.
Where a director is asked to relocate, relocation allowances or
similar benefits may be provided.
Executives may also be reimbursed for any reasonable
expenses (and any income tax payable thereon) incurred in
performance of their duties.
The cost of benefit provision varies from year to year, depending
on the cost to the Group, and there is no prescribed maximum
limit. Benefit costs are monitored and controlled to ensure
they remain appropriate and represent a small element of total
remuneration costs.
Pension
To provide a
contribution towards
retirement.
The executive directors may each receive contributions to a
money purchase pension scheme or salary supplement in lieu
of Company pension contributions (or a combination of both).
The rate offered of 8% for the Chief Executive and 6% (increasing
to 8% at age 50) for the Finance Director is in line with that
offered across the employee population. Any new executive
director would also receive a pension contribution in line with the
wider workforce.
AnnualBonusScheme
Rewards the
achievement of
stretching annual goals
that support the Group’s
annual and strategic
objectives.
Compulsory deferral
of part of the bonus
into shares provides
alignment with
shareholders.
Executive directors and selected senior management, subject
to invitation and approval by the Committee, may participate
in the Annual Bonus Plan.
For executive directors, two thirds of any bonus earned
in excess of 50% of salary is required to be deferred
into restricted shares. Although beneficially held by the
participants, the restricted shares are legally retained by the
trustee of the Galliford Try Employee Benefit Trust (EBT) for
three years, 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.
The Committee operates recovery and withholding provisions
within the Annual Bonus Plan, which facilitate the retrieval
of payments made to directors and executive management in
circumstances of error, material misstatement, misconduct,
reputational damage or corporate failure as a result of poor
risk management.
The maximum opportunity is 120% of salary for the Chief
Executive and 100% of salary for other executive directors.
No more than half of the maximum opportunity is earned for
target performance. For financial elements, bonuses normally
start to be earned from 0% of salary for achieving threshold
performance. The Committee may apply a higher threshold where
this is appropriate given the nature of particular performance
objective, but this will not exceed 25% of the maximum bonus.
Vesting is dependent on achieving specified financial (no less than
50% of the bonus) and strategic or non-financial targets.
The Committee may, at its discretion, acting fairly and reasonably,
adjust bonus outcomes if it considers the payout is inconsistent
with the Company’s underlying performance during the year,
taking into account factors including safety and ESG.
The 22/23 bonus target for the first time incorporates a 12%
target for ESG factors which include: people, carbon emission,
community and supply chain metrics. For the avoidance of doubt
this can be zero and bonuses may not exceed the maximum levels
detailed above.
Any use of such discretion would be subject to shareholder
consultation if materially to the benefit of the executive
management and detailed in the Annual Report on Remuneration.
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Remuneration Committee report continued
Directors’ Remuneration Policy continued
Componentand
link to strategy Operation
Frameworktoassessperformance
andmaximumopportunity
LongTermIncentive
Plan(LTIP)
Rewards the
achievement of
sustained long-term
financial and operational
performance and is
therefore aligned with
the delivery of value to
shareholders.
Facilitates share
ownership to provide
further alignment with
shareholders.
Making of annual awards
aids retention.
Executive directors may be granted awards under the rules of
the LTIP approved by shareholders on 29 November 2019 and
adopted by the Company in January 2020. The LTIP provides
for awards of free shares in the form of nil or nominal cost
options or conditional awards which vest dependent on the
achievement of performance conditions and continued service.
Any share awards that vest (after allowing for sales to cover
any tax liabilities) are subject to a two-year holding period
during which time they cannot be sold (unless exceptional
circumstances apply).
The LTIP provides clawback and malus powers to the
Committee, which can facilitate the retrieval of payments
made to directors and executive management in circumstances
of error, material misstatement, misconduct, reputational
damage or corporate failure as a result of poor risk
management.
Dividends may accrue on LTIP awards over the vesting
and holding periods and, subject to the discretion of the
Committee, be paid out either as cash or shares on vesting, in
respect of the number of shares that have vested.
Performance metrics for FY23 comprise of 75% based on
earnings per share and 25% on a full year cash performance
metric based on average month end cash as a % of turnover.
The Committee may vary the measures and targets that are
included in the plan and the weightings between them from year
to year. Measures may be related to financial performance, share
price performance and ESG. Any material changes to the choice
of measures would be subject to consultation with the Company’s
major shareholders.
The Committee may, at its discretion, acting fairly and reasonably,
adjust LTIP vesting outcomes if it considers the payout is
inconsistent with the Company’s underlying performance over
the performance period. For the avoidance of doubt this can
be to zero and vesting may not exceed the maximum levels
detailed below. Any use of such discretion would be subject
to shareholder consultation if to the benefit of the executive
management and detailed in the Annual Report on Remuneration.
Under the LTIP rules, the maximum value that may be granted in
any financial year to any individual is 150% of salary.
Up to 25% of the relevant part of the award may vest for
achieving threshold performance.
All-employeeschemes
To encourage employee
share participation.
The Group may from time to time operate tax-approved or
other share plans (such as an approved Save As You Earn
scheme for the benefit of all staff) for which executive
directors could be eligible on the same terms as other staff.
Schemes are generally subject to the limits set by HM Revenue &
Customs (HMRC) and may be further limited at the Committee’s
discretion.
Shareholding guidelines
To ensure the interests
of the executive
directors are aligned to
those of shareholders.
The Group’s share retention policy requires executive directors
to build and maintain a shareholding equivalent in value to at
least 200% of basic salary.
Executive directors are required to retain a minimum of half
the after tax number of vested share awards (deferred bonus
and LTIP) until the guideline is met.
On leaving the Company, executive directors are required to
retain the lesser of their in-post shareholding guideline and
their actual shareholding on departure for two years. This
requirement applies to shares earned from share awards
granted to executive directors following the 2020 AGM.
The Committee will assess the guideline annually and take
into account vesting levels and personal circumstances when
assessing progress against the guideline.
–
Non-executivefees
To provide a competitive
and appropriate level
of fees sufficient to
attract, motivate and
retain a Chair and Non-
executive directors of
high calibre.
The Chair is paid a single fixed fee. The remaining non-
executive directors are paid a basic fee. Non-executive
director’s chairing a Board Committee, the Senior Independent
Director and the Chair of the Employee Forum are paid an
additional fee to reflect their extra responsibilities.
The level of these fees is reviewed periodically by the
Committee and Chief Executive for the Chair, and by the Chair
and executive directors for the Non-executive directors.
Fees are set taking into consideration market levels in
comparably sized FTSE companies and relevant sector peers,
the time commitment and responsibilities of the role and the
experience and expertise required.
Non-executive directors, including the Chair, are entitled to
reimbursement of business expenses reasonably incurred in
performing their duties (and any personal tax that may
become payable).
Non-executive directors cannot participate in any of the
Group’s annual bonus or share plans and are not eligible for
any pension entitlements from the Group. The Chair is eligible
to participate in the Group’s medical assurance plan.
The Committee and the executive directors are guided by the
general pay increase for the broader employee population, but
on occasions may need to recognise, for example, changes in
responsibility or time commitments, whether on a permanent or
temporary basis.
Current fee levels are disclosed on page 116.
104
Notes to the policy table
Performancemeasureselectionand
approachtotargetsetting
Measures used under the ABP and LTIP are
reviewed annually to reflect the Group’s
main short- and long-term objectives and
reflect both financial and non-financial
priorities, as appropriate.
Targets applying to the ABP and LTIP
are also reviewed annually, based on a
number of internal and external reference
points. Performance targets are set to be
stretching but achievable, with regard to the
particular strategic priorities and economic
environment in a given year. Under the
bonus, target performance typically requires
meaningful improvement on the previous
year’s outturn, and, for financial measures,
targets are typically in line with market
consensus.
DiscretionsretainedbytheCommittee
inoperatingincentiveplans
The Committee may make minor
amendments to the New 2023 Policy
for regulatory, exchange control, tax or
administrative purposes or to take account
of a change in legislation without obtaining
shareholder approval.
How the New 2023 Policy aligns with the 2018 UK Corporate Governance Code
The 2018 Code sets out principles against which the Committee should determine the Policy for executives, as follows:
Principle Committeeapproach
Clarity – remuneration arrangements should be transparent and promote
effective engagement with shareholders and the workforce.
The Committee has operated a consistent approach which is well understood
internally and by investors. Consultation with shareholders on the revisions to
the Policy have been undertaken and there were no material concerns.
Simplicity–remuneration structures should avoid complexity and their
rationale and operation should be easy to understand.
The Committee has taken measures to ensure pay arrangements are balanced,
simple in their design with a small number of relevant performance measures,
and clearly linked to strategy.
Risk – remuneration arrangements to ensure reputational and other risks
from excessive rewards, and behavioural risks that can arise from target-
based incentive plans, are identified and mitigated.
Incentive plans are capped and are not high relative to those in comparable
companies. Incentive targets are be set which the Committee believes to
be stretching and achievable within the risk-appetite set by the Board. The
Committee has discretion to override any formulaic incentive outcomes if they
are not considered accurate or fairly reflect the underlying performance of the
Group. This ensures that malus and clawback provisions are sufficiently wide-
ranging and can be applied by the Committee if deemed appropriate to do so.
Predictability–the range of possible values of rewards to individual
directors and any other limits or discretions should be identified and
explained at the time of approving the policy.
The Committee maintains clear annual caps on incentive opportunities and has
used its discretion where necessary.
Proportionality–The link between individual awards, the delivery of
strategy and the long-term performance of the company should be clear.
Outcomes should not reward poor performance.
The Committee ensures performance metrics continue to be clearly aligned
with the Group’s strategy each year, maintaining an appropriate balance
between base pay, short- and long-term incentive opportunities.
Alignmenttoculture–Incentive schemes should drive behaviours
consistent with company purpose, values and strategy.
Bonus and incentive schemes are reviewed by the Committee to ensure
consistency with the Group’s purpose, values and strategy.
The Committee will operate the ABP and
LTIP according to their respective rules, the
Policy set out above and in accordance with
the Listing Rules and HMRC rules where
relevant. The Committee, consistent with
market practice, retains discretion over a
number of areas relating to the operation
and administration of these plans, subject
to any limitations set out in the rules of the
applicable plan or, in the case of executive
directors, in the Policy set out on pages 102
to 108.
These include (but are not limited to) the
following:
+ who participates in the plans;
+ the timing of grant of an award
and/or a payment;
+ the size of an award and/or a payment;
+ the choice of (and adjustment of)
performance measures, weightings
and targets for each incentive plan in
accordance with the Policy set out above
and the rules of each plan;
+ discretion relating to the measurement
of performance in the event of a change
of control or reconstruction;
+ determination of a good leaver (in
addition to any specified categories) for
incentive plan purposes based on the
rules of each plan and the appropriate
treatment under the plan rules; and
+ adjustments required in certain
circumstances (e.g. rights issues,
corporate restructuring, on a change of
control and special dividends).
Any use of the above discretions would,
where relevant, be explained in the Annual
Report on remuneration and may, as
appropriate, be the subject of consultation
with the Company’s major shareholders.
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Remuneration Committee report continued
Directors’ Remuneration Policy continued
Executive Director remuneration scenarios
IllustrationofapplicationofRemunerationPolicy
The individualised potential Executive
reward charts have been prepared using the
following assumptions:
+ For minimum remuneration: only fixed
salary, benefits and pensions payments
have been included.
+ For on-target remuneration: fixed salary,
benefits and pension plus 50% payout of
the ABP and 50% of the LTIP (face value)
awards have been included.
+ For maximum remuneration: fixed salary,
benefits and pension plus full payout
under the ABP and full vesting of
the LTIP (face value) awards have
been included.
+ For maximum plus share price growth:
same values as the maximum scenario
plus a 50% increase in the value of
the LTIP (face value) awards have
been included.
Salary levels are based on those applying
on 1 April 2023 and the value of taxable
benefits is estimated based on the cost of
supplying those benefits (as disclosed) for
the year ended 30 June 2023. Executive
directors can choose to participate in all
employee share schemes on the same basis
as other employees but, for simplicity,
the value that may be received from
participating in these schemes has
been excluded.
Policy on recruitment
In cases where the Group recruits a new
Executive Director, the Committee will
align the new Executive’s remuneration
with the approved Remuneration Policy.
In arriving at a value for individual
remuneration, the Committee will take into
account the skills and experience of the
candidate, the market rate for a candidate
of that experience and the importance of
securing the preferred candidate.
The Committee also has the discretion to
meet certain other incidental expenses
(for example, relocation costs and travel
and subsistence payments) to secure
recruitment of preferred candidates.
Further details of the Recruitment Policy
are set out in the table below.
Element General policy Specifics
Salary At a level required to attract the
most appropriate candidate.
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.
Pensionandbenefits In 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.
ABP In 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.
LTIP In 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.
Othershareawards The 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 pay Annual bonus Long-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 Miller 3 January 2020 6
Marisa Cassoni 3 January 2020 6
Alison Wood 1 April 2022 6
Sally Boyle 1 May 2022 6
Michael Topham 1 June 2023 6
Executivedirectors
Bill Hocking 3 January 2020 12
Andrew Duxbury 3 January 2020 12
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.
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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
2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
4
2023 2022 2023 2022 2023 2022
Executivedirectors
Bill Hocking 480 463 3 2 38 37 521 502 401 551 1,507 884 – – 1,908 1,435 2,429 1,937
Andrew
Duxbury 390 376 2 2 24 23 416 401 272 373 1,224 718 – – 1,496 1,091 1,912 1,492
Non-executivedirectors
Terry Miller 69 67 – – – – 69 67 – – – – – – – – 69 67
Marisa
Cassoni 56 54 – – – – 56 54 – – – – – – – – 56 54
Alison
Wood 149 12 – – – – 149 12 – – – – – – – – 149 12
Sally Boyle 47 8 – – – – 47 8 – – – – – – – – 47 8
Michael
Topham 4 – – – – – 4 – – – – – – – – – 4 –
Formerdirectors
Peter
Ventress 46 206 – 1 – – 46 207 – – – – – – – – 46 207
Gavin Slark 35 45 – – – – 35 45 – – – – – – – – 35 45
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.
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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 tax 45% £22.0m (0%) £23.2m (22.5%) £26.7m (45%)
2
£23.4m 24%
Pre-exceptional half year Group profit before tax 15% £8.1m (0%) £9.0m (7.5%) £10.3m (15%) £11.7m 15%
Group cash management 20% 95% of budget
(10%)
100% of budget
(10%)
110% of budget
(20%)
14% 14%
Construction order book 8% 83.0% secured
(0%)
85.0% secured
(4%)
87.0% secured
(8%)
92% secured 8%
ESG
1
:
Employee: based on employee advocacy 3% <80%
(0%)
>80%
(3%)
>80%
(3%)
86% 3
Carbon emission: based on annual reduction of
scope 1 and 2 emissions
3% 5% reduction
(0%)
7.5% reduction
(1.5%)
10% reduction
(3%)
5.6% reduction 0.4
Community: based on CCS score 3% <39
(0%)
>39
(3%)
>39
(3%)
43.4 3
Supply chain:
payment of supply chain invoices within 60 days
3% <95%
(0%)
>95%
(3%)
>95%
(3%)
98 3
Health and safety: based on discretionary
assessment of H&S performance
Underpin Discretional adjustment
Totalpayout(%ofmaximumbonus) 100.0% 10% 54.5% 100% 70.4%
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 Hocking 84.5% 120% 401 292 109
Andrew Duxbury 70.4% 100% 272 219 53
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 Hocking 12.6p 15.4p 16.6p 8% 10% 9.7% 97.2% 1,507 851
Andrew Duxbury 12.6p 15.4p 16.6p 8% 10% 9.7% 97.2% 1,224 691
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.
Director Plan Grant Date
Share price
at grant
Number
ofawards
outstanding
at1July
2022 Granted Vested Lapsed
Number
ofawards
outstanding
at30June
2023
Valueof
awards
vested during
financialyear
£000
Actual or
anticipated
vestingdate
Bill Hocking LTIP
1
13.03.20 £1.1554 584,213 – 519,949 64,264 – £883,913.30 13.03.23
LTIP 23.09.20 £0.80 843,750 – – – 843,750 – 23.09.23
LTIP 23.09.21 £1.788 385,067 – – – 385,067 – 23.09.24
ABP
3
23.09.21 £1.7694 118,684 – – – 118,684 – 23.09.24
LTIP 23.09.22 £1.61 – 442,546 – – 442,546 – 23.09.25
ABP
4
28.09. 22 £1.60 – 133,875 – – 133,875 – 28 .09.25
Andrew Duxbury LTIP
1
13.03.20 £1.1554 474,705 – 422,487 52,218 – £718,227.90 13.03.23
ABP
2
23.09.20 £0.8442 52,969 – – – 52,969 – 23.09.23
LTIP 23.09.20 £0.80 685,593 – – – 685,593 – 23.09.23
LTIP 23.09.21 £1.788 312,919 – – – 312,919 – 23.09.24
ABP
3
23.09.21 £1.7694 69,015 – – – 69,015 – 23.09.24
LTIP 23.09.22 £1.61 – 359,627 – – 359,627 – 23.09.25
ABP
4
28.09. 22 £1.60 – 77,708 – – 7 7,70 8 – 28.0 9.25
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.
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Awards granted during the year (audited)
On 23 September 2022, the following conditional LTIP awards were made to Bill Hocking and Andrew Duxbury.
Director Dateofgrant
Numberof
shares awarded Basisofaward
Share price used to
determinelevelofaward£ Facevalue£
Bill Hocking 23 September 2022 442,546 150% of base salary £1.61 712,500
Andrew Duxbury 23 September 2022 359,627 150% of base salary £1.61 579,000
The performance conditions attached to these awards made in September 2022 are as follows:
Dateofgrant Performanceconditions
September2022 Vesting 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
Measure 30.6.23 30.6.22 LTIP(unvested)
Deferredbonus
awards(unvested) 30.6.23
%ofsalaryheld
under share
ownership
guidelines
2
Executivedirectors
Bill Hocking 391,555 119,778 1,671,363 252,559 2,315,477 252%
Andrew Duxbury 245,788 24,955 1,358,139 199,692 1,803,619 215%
Non-executivedirectors
Terry Miller 3,566 2,066 – – 3,566 n/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.
2014 2015
1
2016 2017 2018 2019
2
2020
3
2021 2022 2023
2023 Chair ChiefExecutive
Total remuneration (£000) 3,212 2,811 1,262 1,461 1,043 1,448 824 660 1,027 1,937 2,429
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
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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.
Year Method CEOsinglefigure AllUKemployees Lowerquartile Median Upperquartile
2019/20 Option B £660,587 Ratio 24:1 15:1 9:1
Total pay £27,4 07 £43,165 £74,351
Salary £25,500 £35,249 £61,057
2020/21 Option B £1,026,671 Ratio 27:1 19:1 14:1
Total pay £37, 399 £54,374 £73,385
Salary £36,134 £43,781 £66,927
2021/22 Option B £1,936,788 Ratio 62:1 36:1 26:1
Total pay £31,128 £53,976 £73,920
Salary £ 27,875 £44,720 £62,275
2022/23 Option B £2,428,970 Ratio 66:1 45:1 31:1
Total Pay £36,562 £54,444 £79,638
Salary £29,411 £48,003 £65,950
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
2023 2022 2021
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 Hocking 3.7% 50.0% (27. 2)% 2.9% 203.3% 2.0% 119.5% (85.5)% 4 49.8%
Andrew Duxbury 3.7% 0.0% (27.1)% 2.6% (70.0)% 1.9% 4.9% (70.9)% 46.5%
Non-executivedirectors
Terry Miller 3.0% n/a n/a 7.5% n/a n/a 15.3% n/a n/a
Marisa Cassoni 3.7% n/a n/a 3.0% n/a n/a (1.1)% n/a n/a
Alison Wood
3
n/a n/a n/a n/a n/a n/a n/a n/a n/a
Sally Boyle
3
n/a n/a n/a n/a n/a n/a n/a n/a n/a
Michael Topham
5
n/a n/a n/a n/a n/a n/a n/a n/a n/a
Formerdirectors
Peter Ventress (77.7)% n/a n/a 1.9% n/a n/a 5.0% n/a n/a
Gavin Slark (22.2)% n/a n/a 3.0% n/a n/a 5.0% n/a n/a
P50 median employee 7.3% 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
2021/22 2022/23 Change
Total overall spend on pay (£m) 213.0 256.7 43.7m
Dividends (£m) 6.3 9.6 3.3m
Share buyback (£m) – 10.6 10.6m
Group corporation tax charge (£m)
1
1.7 3.1 £1.4m
Effective tax rate (%) 8.9 15.1 6.2 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.
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Financial statementsGovernanceStrategic report
99.89%
64.43%
85.73%86.03%
13.97% 14.27% 35. 57% 0.11%
99.86%
0.14%
2021 2022202020192018
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:
2023 2022 Increase/Change%
Chair
1
£182,875 £206,128
2
(11.3%)
1,2
Non-executivedirectors
Base fee £48,803 £46,701 4.5%
Additional fees:
Senior Independent Director £4,870 £4,660 4.5%
Chairs of Board Committees £9,178 £8,783 4.5%
Chair of Employee Forum and Stakeholder Steering Committee
3
£9,178 £8,783 4.5%
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
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.
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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:
Shareholder Interest % capital
Premier Miton Group plc 11,370,288 10.96
Aberforth Partners LLP 12,525,816 12.02
Standard Life Aberdeen plc 6,436,890 5.80
J O Hambro Capital Management Limited 5,738,929 5.17
Dimensional Fund Advisors LP 5,552,697 4.97
Ameriprise Financial Inc. 5,496,847 4.95
Brewin Dolphin Ltd 5,169, 266 4.66
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 12,525,816 12.02
Premier Miton Group plc 11,370,288 10.96
J O Hambro Capital Management Ltd 10,348,874 10.01
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.
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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
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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
Coverage 97% (2022: 94%) of Group profit before tax
97% (2022: 99%) of Group revenue
95% (2022: 92%) of Group total assets
Key audit
matters
2023 2022
Revenue and profit recognition
for construction contracts X X
Recognition and recoverability of
claims and variations X X
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.
Materiality Group 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
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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.
Keyauditmatter Howthescopeofourauditaddressedthekeyauditmatter
Revenueandprofit
recognitionfor
constructioncontracts
Note 1 on page 136 to
the financial statements
gives further detail
regarding the estimates
and judgements made by
the Group in this regard.
Note 1 on page 136 to
the financial statements
provides the accounting
policies for construction
contracts.
For long term construction
contracts, the Group
recognises revenue over
time and measures progress
based on the input method
by considering the costs
incurred to date, relative to
the total estimated forecast
costs applied to the estimated
forecast revenue.
This is considered a
significant risk as the stage
of completion, forecast
revenue and forecast costs
on contracts are areas of
significant judgement.
These judgements have
a consequential impact
on a number of contract
balances, including trade
receivables, contract assets,
trade payables, accruals and
contract liabilities within the
financial statements including
the related judgements and
estimates disclosures. There is
also a risk that the accounting
policies are not in accordance
with – IFRS 15 Revenue from
contracts with customers
(‘IFRS 15’)
Having considered the
above we determined that
construction contract revenue
and other related contract
balances have an inherent
high degree of estimation
uncertainty with a range of
possible outcomes and hence
we have treated these areas
and the associated disclosures
as a KAM.
We obtained an understanding of and evaluated management’s processes
and controls for ensuring construction contracts with customers meet the
requirements of IFRS 15.
We have tested the design and operating effectiveness of the key controls over
the revenue, margin, costs to complete and stage of completion on construction
contracts.
We focused our work on those contracts with the greatest estimation uncertainty,
based on the information included in the contract schedule (e.g. significant
movement from tender/prior year or large unagreed variations or claims) and
challenged the judgements made with the project teams as well as senior
operational, legal, commercial and financial management. On each contract
selected, we specifically challenged and critically assessed the explanations
provided by management and carried out the following detailed testing;
+ obtained an understanding of the contract and its particulars by obtaining the
initial contract with the customer and holding discussions with commercial
teams and management.
+ agreeing forecast revenue to contractual agreements, supplemental agreements
and agreed variations. The procedures to test the judgements in forecast
revenue are included in the key audit matter on recognition and recovery of
claims and variations.
+ reconciling revenue recognised with amounts applied for and amounts certified
by clients, agreeing the amounts received to bank. Where the balance has not
been received into bank, we have considered recoverability of the balance by
reviewing correspondence with the customer.
+ re-performing the key calculations behind the margin applied, the profit taken
and the stage of completion, as well contract assets and liabilities.
+ testing a sample of accrued subcontractor costs to the year-end subcontractor
application and a sample of other accrued costs to applicable supporting
documentation
+ corroborated a sample of forecast costs for significant subcontractor packages
to documentary evidence. Where the subcontractor projected final accounts
significantly differed from the amount included in the contract forecast we
challenged management and obtained supporting evidence for the differences
as applicable.
+ performed a review of forecast costs by type included within the CVR and
performed analysis to determine the stage of completion of each cost type
to determine where costs are progressing in line with the overall stage of
completion. We challenged management where costs were not in line with our
expectations and obtained supporting documentation as applicable.
+ challenged commercial Directors on variances between the stage of completion
(internal) with external certified completion, judgements made in determining
forecast costs and the remaining contingency on a project for the possibility of a
material misstatement.
124
Keyauditmatter Howthescopeofourauditaddressedthekeyauditmatter
Revenueandprofit
recognitionfor
constructioncontracts
(continued)
+ compared the percentage of forecasts costs that have been procured to the
overall forecast costs and challenged management where there are substantial
costs yet to procure as this presents a greater risk. We corroborated a sample of
un-procured subcontractor costs to documentary evidence.
+ assessing the recoverability of contract assets by comparing to the post year
end external certification of the value of work performed, and the receipt of
post year end funds.
+ holding discussions with management to understand and challenge other areas
of judgement taken including anticipated completion date and impact of any
delays, whether there are any disputes with third parties on the contract and the
reason for any movements in forecasts from tender and prior year to 30 June
2023. We obtained corroborating evidence for the explanations provided.
+ tested a sample of costs incurred in the year and ensured that they had been
correctly allocated to the relevant project.
+ where appropriate, reviewing legal correspondence and expert advice obtained
in respect of the judgements and where necessary speaking directly with
management’s experts who had provided this advice.
+ remained alert for any contradictory evidence or indicators of understatement
of forecast costs while carrying out testing, including site visits, cost testing and
payments testing.
+ performed a stand back review on the key judgements and estimates on each
contract to ensure that sufficient assurance has been obtained and that we have
sufficient coverage over the costs to complete.
+ compared the positions from the latest available contract schedule and
compared the positions across all contracts to the audited year end schedule.
We challenged management on any significant movements.
We carried out targeted testing on the remaining of contracts which includes
comparing the revenue recognised to amounts certified or final accounts where
applicable. From the specific contract information reviewed for these contracts,
we considered whether there was an indication of risks within the contract
including delays, significant unagreed variations and un-procured costs for which
we then performed additional procedures to address the risk.
We visited a sample of sites across the business. We inspected the physical
progress of the sites and discussed progress with personnel working on the
specific sites. Where sites were selected for audit testing, we considered whether
the information obtained from the site visit was consistent with the information
obtained from audit testing.
We assessed the reliability of management’s estimates by reviewing the
fluctuations in budgeted end of life margin from 30 June 2022 to 30 June 2023 for
projects that are substantially completed at the year-end as well as from tender to
the 30 June 2023 for all contracts.
We considered the adequacy of the disclosures in the financial statements in
relation to specific contracts and also the disclosures in respect of significant
judgements and estimates.
Keyobservations:
We consider that the estimates and judgements made by management in respect
of construction contract revenue recognition and the associated disclosures are
appropriate.
Governance
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Independent auditor’s report continued
Keyauditmatter Howthescopeofourauditaddressedthekeyauditmatter
Recognitionand
recoverabilityofclaims
andvariations
Note 1 on page 138 to
the financial statements
gives further detail
regarding the estimates
and judgements made by
the Group in this regard.
Note 1 on page 136 to
the financial statements
provides the accounting
policy for construction
services.
In a number of the Group’s
construction contracts
there are assumptions of
amounts contractually due
from customers, and contract
assets can include variations
and claims which are not yet
certified or formally agreed
but have been assessed
by management as highly
probable of not reversing
under IFRS 15.
The assessment of revenue
that is highly probable that
there will not be a significant
reversal requires judgement.
Similarly, the assessment
of the expected credit loss
as regards contract assets
is judgemental. There also
is a risk these significant
judgements and estimates are
not adequately disclosed in
the financial statements.
In addition, there are some
downstream claims against
subcontractors, designers,
and insurers other than
customers which are only
recognised once they are
considered to be virtually
certain of recoverability,
in accordance with IAS 37
– Provisions, Contingent
Liabilities and Contingent
Assets. Once the recognition
criteria is considered to be
met, significant judgement
is required to determine the
amounts to be recognised.
These assumptions impact
revenue recognised on these
contracts, as well as contracts
assets balances and hence is
considered to be a key audit
matter.
We challenged management’s assessment of the expected recovery of variations,
claims and compensation events from clients, to determine the basis on which the
associated revenue was considered to be highly probable of not reversing. We
obtained evidence of historic success rates and evidence of amounts agreed post
year end to support management’s assessment as applicable.
We challenged the assumptions made by management in respect of estimated
recoveries from subcontractors, designers, and insurers included in the forecast,
to determine whether these could be considered virtually certain of recoverability.
We also considered the existence of any contradictory evidence.
We assessed the evidence provided by management regarding recovery of claims
amounts to evidence of agreement with customers or insurance reserves provided
by the insurers.
We obtained and reviewed any legal correspondence relating to these claims and
variations results and where necessary discussed the progress of legal disputes
with the Group’s external legal advisors.
Keyobservations:
We consider that the estimates and judgements and associated disclosures
made by management in respect of recognition and recoverability of claims and
variations are reasonable.
Keyauditmatters continued
126
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as
follows:
Groupfinancialstatements ParentCompanyfinancialstatements
2023
£m
2022
£m
2023
£m
2022
£m
Materiality 3.5 1.9 3.0 1.8
Basisfordetermining
materiality 0.26% of revenue 0.15% of revenue 1% of total assets 95% of Group materiality
Rationaleforthe
benchmarkapplied
As the Group continues to return to profitability,
we have considered what would be a stable basis
of operations and have benchmarked to peers’
materiality as a proportion of revenue.
Based on this we have set Group materiality at
0.26% (2022: 0.15%) of Group revenue.
In the current year we have set Parent Company
materiality at lower of 1% of total assets and 95% of Group
materiality.
We chose total assets as the benchmark as we believe
this to be of most interest to the users of the financial
statements.
Performancemateriality
(£) 2.3 1.2 2.0 1.1
Basisfordetermining
performancemateriality
On the basis of our risk assessment, together with our assessment of the Group’s overall control environment
and history of adjustments, our judgement was that overall performance materiality of the Group and Parent
Company should be 65% of materiality.
Componentmateriality
We set materiality for each significant component of the Group based on a percentage of between 19% and 86% (2022: 5% and 95%)
of Group materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component
materiality ranged from £0.65m to £3m (2022: £0.1m to £1.8m). In the audit of each component, we further applied performance
materiality levels of 65% (2022: 65%) of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reportingthreshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £70,000 (2022: £38,000).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Governance
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Independent auditor’s report continued
Other information
The Directors are responsible for the other information. The other
information comprises the information included in the Annual
Report and Financial Statements 2023 other than the financial
statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Parent Company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit.
Going concern and
longer-termviability
+ The Directors’ statement with regards
to the appropriateness of adopting the
going concern basis of accounting and
any material uncertainties identified set
out on page 119 and
+ The Directors’ explanation as to their
assessment of the Group’s prospects,
the period this assessment covers and
why the period is appropriate set out on
page 69.
OtherCodeprovisions + Directors’ statement on fair, balanced
and understandable set out on page 97;
+ Board’s confirmation that it has
carried out a robust assessment of the
emerging and principal risks set out on
page 52;
+ The section of the annual report that
describes the review of effectiveness of
risk management and internal control
systems set out on page 52; and
+ The section describing the work of the
audit committee set out on page 94.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions
and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work
undertaken in the course of the audit:
+ the information given in the Strategic
report and the Directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
+ the Strategic report and the Directors’
report have been prepared in
accordance with applicable legal
requirements.
In the light of the knowledge and
understanding of the Group and Parent
Company and its environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’
remuneration report to be audited has
been properly prepared in accordance
with the Companies Act 2006.
Mattersonwhichwe
are required to report
byexception
We have nothing to report in respect of
the following matters in relation to which
the Companies Act 2006 requires us to
report to you if, in our opinion:
+ adequate accounting records have not
been kept by the Parent Company, or
returns adequate for our audit have not
been received from branches not visited
by us; or
+ the Parent Company financial
statements and the part of the
Directors’ remuneration report to be
audited are not in agreement with the
accounting records and returns; or
+ certain disclosures of Directors’
remuneration specified by law are not
made; or
+ we have not received all the information
and explanations we require for our
audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’
responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the Directors are responsible
for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group
or the Parent Company or to cease operations, or have no realistic
alternative but to do so.
128
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Extenttowhichtheauditwascapableofdetecting
irregularities,includingfraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is
detailed below:
Non-compliancewithlawsandregulations
Based on:
+ Our understanding of the Group and the industry in which it
operates;
+ Discussion with management and those charged with
governance; and
+ Obtaining and understanding of the Group’s policies and
procedures regarding compliance with laws and regulations;
we considered the significant laws and regulations to be, but not
limited to, the Companies Act 2006, the UK Listing Rules and tax
legislation.
The Group is also subject to laws and regulations where the
consequence of non-compliance could have a material effect on
the amount or disclosures in the financial statements, for example
through the imposition of fines or litigations. We identified such
laws and regulations to be the health and safety legislation etc.
Our procedures in respect of the above included:
+ Review of minutes of meeting of those charged with governance
for any instances of non-compliance with laws and regulations;
+ Review of correspondence with regulatory and tax authorities
for any instances of non-compliance with laws and regulations;
+ Review of financial statement disclosures and agreeing to
supporting documentation;
+ Involvement of tax specialists in the audit; and
+ Testing operating effectiveness of controls around procurement
and tendering process.
Fraud
We assessed the susceptibility of the financial statements to
material misstatement, including fraud. Our risk assessment
procedures included:
+ Enquiry with management and those charged with governance
also considered Audit Committee, internal audit regarding any
known or suspected instances of fraud;
+ Obtaining an understanding of the Group’s policies and
procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks related to fraud.
+ Review of minutes of meeting of those charged with governance
for any known or suspected instances of fraud;
+ Discussion amongst the engagement team as to how and where
fraud might occur in the financial statements; and
+ Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud.
Based on our risk assessment, we considered the areas most
susceptible to fraud to be management override of controls that are
otherwise operating effectively.
Our procedures in respect of the above included:
+ Testing a sample of journal entries throughout the year, which
met a defined risk criteria and considered whether there
was evidence of bias by the Directors within the significant
judgements and estimates by agreeing to supporting
documentation;
+ Involvement of internal forensic specialists in the fraud risk
assessment procedures; and
+ Assessing significant estimates made by management for bias.
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members who were
all deemed to have appropriate competence and capabilities and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk
of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the
less likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Thomas Edward Goodworth (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
20 September 2023
BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).
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Consolidated income statement
for the year ended 30 June 2023
2023 2022
Notes
Pre-
Exceptional
items
£m
Exceptional
items(note4)
£m
Total
£m
Pre-
Exceptional
items
£m
Exceptional
items(note4)
£m
Total
£m
Revenue 3 1 ,3 93.7 – 1 ,39 3.7 1 , 2 3 7. 2 – 1 , 2 3 7. 2
Cost of sales (1,29 2.3 ) – (1,2 9 2.3 ) (1 , 1 51 . 5 ) (5. 8 ) (1 , 1 5 7. 3 )
Grossprofit/(loss) 101 .4 – 101 . 4 85.7 (5. 8 ) 7 9. 9
Other income 3.6 – 3.6 – – –
Administrative expenses (8 6. 1 ) (10. 5 ) (96. 6 ) (69 .9 ) (7. 9 ) (7 7. 8 )
Impairment of financial assets 17 (2 .8 ) – (2 .8 ) – – –
Operatingprofit/(loss) 16 .1 (10 . 5 ) 5.6 15. 8 (1 3. 7 ) 2 .1
Share of post-tax profits from joint ventures – – – 0.4 – 0.4
Finance income 6 6.3 – 6.3 4.3 – 4. 3
Finance costs 6 (1 . 8 ) – (1 . 8 ) (1 . 4 ) – (1 .4 )
Profit/(loss)beforeincometax 7 20.6 (1 0. 5 ) 10. 1 1 9.1 (13 .7 ) 5.4
Income tax (expense)/credit 8 (3 .1 ) 2 .1 (1 . 0 ) (1 .7 ) 2 .6 0.9
Profit/(loss)fortheyear 1 7. 5 (8.4 ) 9. 1 1 7. 4 (11. 1 ) 6.3
Earnings per share
Basic
Profitattributabletoordinaryshareholders 10 16.6 p 8 .7 p 16 . 0 p 5. 8 p
Diluted
Profitattributabletoordinaryshareholders 10 15.6 p 8.1 p 15.0 p 5.5 p
The notes are an integral part of the consolidated financial statements.
130
Consolidated statement of comprehensive income
for the year ended 30 June 2023
Notes
2023
£m
2022
£m
Profitfortheyear 9. 1 6.3
Othercomprehensiveexpense:
Items that may be reclassified subsequently to profit or loss
Movement in fair value of PPP and other investments 16 (2 .4 ) (0.9 )
Total items that may be reclassified subsequently to profit or loss (2 .4 ) (0.9 )
Othercomprehensiveexpensefortheyearnetoftax (2 .4 ) (0.9 )
Totalcomprehensiveincomefortheyear 6.7 5 .4
The notes are an integral part of the consolidated financial statements.
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Balance sheets
Group Company
Notes
30June2023
£m
30June2022
£m
30June2023
£m
30June2022
£m
Assets
Non-current assets
Intangible assets 11 5. 6 8.8 – –
Goodwill 12 92 .7 88.2 – –
Property, plant and equipment 13 7. 2 7. 1 – –
Right-of-use assets 14 38.6 24 . 5 – –
Investments in subsidiaries 15 – – 188.5 188.0
Investments in joint ventures – 0.3 – –
PPP and other investments 16 4 4.6 4 7. 5 – –
Deferred income tax assets 22 15 .5 14 . 0 – –
Total non-current assets 204. 2 19 0 . 4 188.5 188.0
Current assets
Trade and other receivables 17 286. 5 24 3 . 0 – –
Current income tax assets 1.8 3 .1 – –
Cash and cash equivalents 18 22 0.2 218 .9 114.2 109.4
Total current assets 508. 5 4 65. 0 114.2 109.4
Total assets 712 .7 6 55. 4 302.7 297.4
Liabilities
Currentliabilities
Trade and other payables 19 (52 5. 1 ) (471 .1 ) – –
Lease liabilities 14 (14 .9 ) (9. 9 ) – –
Provisions for other liabilities and charges 20 (2 9. 9 ) (27 .4 ) – –
Total current liabilities (5 6 9. 9 ) (50 8 .4 ) – –
Non-currentliabilities
Lease liabilities 14 (24. 2 ) (14 .9 ) – –
Total non-current liabilities (24 . 2 ) (14 .9 ) – –
Total liabilities (594 .1 ) (52 3. 3 ) – –
Net assets 118 . 6 132 .1 302.7 2 97.4
Equity
Ordinary shares 24 52 . 4 55. 5 52.4 55.5
Other reserves 26 135 .3 132 . 2 135.3 132.2
Retained earnings 26 (6 9. 1 ) (55 .6 ) 115.0 109.7
TotalequityattributabletoownersoftheCompany 118 . 6 132 .1 302.7 2 97.4
The profit for the Parent Company for the year was £25.0m (2022: £28.8m).
The notes are an integral part of the consolidated financial statements.
The financial statements on pages 130 to 173 were approved and authorised for issue by the Board on 20 September 2023 and signed on
its behalf by:
Bill Hocking Andrew Duxbury Galliford Try Holdings plc
Chief Executive Finance Director Registered number: 12216008
132
Consolidated and Company statements of changes in equity
for the year ended 30 June 2023
Notes
Ordinary
shares
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
shareholders’
equity
£m
Consolidatedstatement
At 30 June 2021 55. 5 – 11 8 . 4 (39 .8 ) 13 4 .1
Profit for the year – – – 6.3 6.3
Other comprehensive expense – – – (0 .9 ) (0 .9 )
Total comprehensive income for the year – – – 5.4 5.4
Transactionswithowners:
Dividends 9 – – – (6 . 3 ) (6 . 3 )
Purchase of shares – – – (3. 4 ) (3.4 )
Share-based payments 25 – – – 2.3 2.3
Recycling of retained earnings to merger reserve
on reversal of impairment of investment in
Galliford Try Limited 26 – – 13 . 8 (13 . 8 ) –
At 30 June 2022 55. 5 – 132 . 2 (55. 6 ) 132 .1
Profit for the year – – – 9. 1 9. 1
Other comprehensive expense – – – (2 .4 ) (2 .4 )
Total comprehensive income for the year – – – 6 .7 6.7
Transactionswithowners:
Dividends 9 – – – (9.6 ) (9 .6 )
Purchase of shares – – – (14 . 0 ) (14 .0 )
Share-based payments 25 – – – 3.4 3.4
Cancellation of shares 24, 26 (3. 1 ) – 3.1 – –
At30June2023 52 .4 – 135 .3 (6 9. 1 ) 11 8 . 6
Companystatement
At 30 June 2021 55.5 – 118.4 100.7 274.6
Profit for the year – – – 28.8 28.8
Total comprehensive income – – – 28.8 28.8
Transactionswithowners:
Dividends 9 – – – (6.3) (6.3)
Share-based payments 25 – – – 0.3 0.3
Recycling of retained earnings to merger reserve
on reversal of impairment of investment in
Galliford Try Limited 26 – – 13.8 (13.8) –
At 30 June 2022 55.5 – 132.2 109.7 297.4
Profit for the year – – – 25.0 25.0
Total comprehensive income – – – 25.0 25.0
Transactionswithowners:
Dividends 9 – – – (9.6) (9.6)
Share-based payments 25 – – – 0.5 0.5
Purchase of shares – – – (10.6) (10.6)
Cancellation of shares 26 (3.1) – 3.1 – –
At30June2023 52.4 – 135.3 115.0 302.7
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Statements of cash flows
for the year ended 30 June 2023
Group Company
Notes
2023
£m
2022
£m
2023
£m
2022
£m
Cashflowsfromoperatingactivities
Profit for the year 9. 1 6.3 25.0 28.8
Adjustments for:
Income tax expense/(credit) – continuing operations 8 1 .0 (0 .9 ) – –
Net finance income – continuing operations 6 (4 . 5 ) (2 .9 ) – –
Profit before finance costs for continuing operations 5.6 2.5 25.0 28.8
Depreciation, amortisation and
impairment of non-current assets 11, 13 & 14 1 7. 1 14 . 5 – –
Reversal of impairment of investment in subsidiary undertaking 15 – – – (13.8)
Dividends received from subsidiary undertakings – – (25.0) (15.0)
Profit on disposal of joint venture 16 (3 .6 ) – – –
Share-based payments 25 3.4 2.3 – –
Share of post-tax losses/(profits) from joint ventures – (0 .4 ) – –
Impairment of financial asset 2.8 – – –
Other non-cash movements (0.2 ) – – –
Netcashgeneratedfromoperationsbeforechangesinworkingcapital 25.1 18 .9 – –
(Increase)/decrease in trade and other receivables 17 (4 3. 3 ) 1.2 – –
Increase in trade and other payables 19 4 7. 7 6 .7 – –
Increase/(decrease) increase in provisions 20 2.5 (11 . 3 ) – –
Netcashgeneratedfromoperations 32 .0 15. 5 – –
Interest received 6.3 4. 3 – –
Interest paid (1 . 8 ) (1 . 4 ) – –
Income tax (paid)/received (1 .0 ) 4.4 – –
Netcashgeneratedfromoperatingactivities 35. 5 22.8 – –
Cashflowsfrominvestingactivities
Dividends received from joint ventures and associates 0.3 0.3 – –
Decrease in amounts due from joint ventures 0.2 5.0 – –
Proceeds from disposal of joint venture 3.6 – – –
PPP loan repayments 16 0.5 0 .7 – –
Acquisition of business combinations, net of cash acquired 30 (1 . 0 ) (0.3 ) – –
Dividends received from subsidiary undertakings – – 25.0 15.0
Proceeds from disposal of property, plant and equipment – 0 .1 – –
Acquisition of property, plant and equipment 13 (2 . 2 ) (5 .0 ) – –
Netcashgeneratedfrominvestingactivities 1.4 0.8 25.0 15.0
Cashflowsfromfinancingactivities
Repayment of lease liabilities 14 (12 . 0 ) (11 . 2 ) – –
Purchase of own shares 26 (14 . 0 ) (3.4 ) (10.6) –
Dividends paid to Company shareholders 9 (9.6 ) (6 .3 ) (9.6) (6.3)
Netcashusedinfinancingactivities (35.6 ) (20 .9 ) (20.2) (6.3)
Net increase in cash and cash equivalents 1.3 2.7 4.8 8.7
Cash and cash equivalents at 1 July 18 218.9 216 . 2 109.4 100.7
Cashandcashequivalentsat30June 18 22 0.2 218 .9 114.2 109.4
134
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Notes to the consolidated financial statements continued
1 Accounting policies continued
136
1 Accounting policies continued
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Notes to the consolidated financial statements continued
1 Accounting policies continued
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1 Accounting policies continued
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Notes to the consolidated financial statements continued
1 Accounting policies continued
140
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Notes to the consolidated financial statements continued
2 Segmental reporting continued
142
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Notes to the consolidated financial statements continued
3 Revenue continued
144
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Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
12 Goodwill continued
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Notes to the consolidated financial statements continued
152
14 Leases continued
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Notes to the consolidated financial statements continued
15 Investments in subsidiaries continued
154
16 PPP and other investments continued
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Notes to the consolidated financial statements continued
156
17 Trade and other receivables continued
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Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
22 Deferred income tax continued
160
23 Financial instruments continued
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Notes to the consolidated financial statements continued
23 Financial instruments continued
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Notes to the consolidated financial statements continued
25 Share-based payments continued
164
26 Other reserves and retained earnings continued
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Notes to the consolidated financial statements continued
166
30 Business combinations continued
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Notes to the consolidated financial statements continued
30 Business combinations continued
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Notes to the consolidated financial statements continued
32 Alternative performance measures continued
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Notes to the consolidated financial statements continued
33 Group undertakings continued
(i)Subsidiaryundertakings continued
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33 Group undertakings continued
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Five-year record (unaudited)
2019
£m
2020
1
£m
2021
1
£m
2022
1
£m
2023
1
£m
Revenue 1,400.1 1,121.6 1,124.8 1 ,237. 2 1,393.7
Profit/(loss) before exceptional items (17.2) (59.7) 11.4 19.1 20.6
Exceptional items (47.3) 25.1 – (13.7) (10.5)
Profit/(loss) before taxation (64.5) (34.6) 11.4 5.4 10.1
Tax 15.0 2.0 (1.0) 0.9 (1.0)
Profit/(loss) after taxation attributable to shareholders (49.5) (32.6) 10.4 6.3 9.1
Fixed assets (including IFRS 16 right-of-use assets), investments in
joint ventures, PPP and other investments 124.8 67.5 73.2 79.4 90.4
Intangible assets and goodwill 171.4 85.0 82.9 97.0 98.3
Net current assets/(liabilities) 340.2 (14.4) (24.4) (43.4) (61.4)
Other long-term assets 246.7 5.3 14.3 14.0 15.5
Long-term payables and provisions (203.8) (22.9) (11.9) (14.9) (24.2)
Net assets 679.3 120.5 134.1 132.1 118.6
Share capital 55.5 55.5 55.5 55.5 52.4
Reserves 623.8 65.0 78.6 76.6 66.2
Shareholders’ funds 679.3 120.5 134.1 132.1 118.6
Dividends per share (pence) 58.0 – 4.7 8.0 22.5
Basic earnings per share (pence)
2
(10.7) (47.7) 9.5 16.0 16.6
Diluted earnings per share (pence)
2
(10.6) (47.7) 9.1 15.0 15.6
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 announced 3 March
Full year results announced 20 September
Ex dividend date – special dividend 5 October
Special dividend record date 6 October
Special dividend 27 October
Ex dividend date – final dividend 9 November
Final dividend record date 10 November
Annual General Meeting 10 November
Final dividend payment 8 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
shareholders regarding unsolicited boiler room frauds.
Company contact
Contact with existing and prospective shareholders is welcomed by
the Company. If you have any questions please contact the General
Counsel & Company Secretary, either at the registered office or via
email (kevin.corbett@gallifordtry.co.uk).
Analysis of shareholdings at 30 June 2023
Sizeofshareholding
%of
holders
Number
ofholders
%of
shares
Number
ofshares
1–10,000 92.21% 2,795 2.70% 2,836,690
10,001–50,000 3.93% 119 2.53% 2,655,396
50,001–500,000 2.71% 82 13.46% 14,112,013
500,001 – highest 1.15% 35 81.31% 85,265,095
Total 100.00% 3,031 100.00% 104,869,194
Registered office
Galliford Try Holdings plc
Blake House
3 Frayswater Place
Cowley
Uxbridge
Middlesex
UB8 2AD
Stockbrokers
Peel Hunt LLP
Panmure Gordon (UK) Limited
Bankers
Barclays Bank PLC
HSBC Bank PLC
Registration
England and Wales 12216008
Independent auditor
BDO LLP
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Notes
176
Galliford Try
Blake House, 3 Frayswater Place,
Cowley, Uxbridge,
Middlesex UB8 2AD
gallifordtry.co.uk