REG - Galliford Try Hldgs - Half-year Report
08/03/2023 07:00
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RNS Number : 2072S Galliford Try Holdings PLC 08 March 2023
8 MARCH 2023
GALLIFORD TRY HOLDINGS PLC
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2022
Confident outlook and strong performance
· Profit before tax up 65% to £11.7m (H1 2022: £7.1m) before
exceptional costs(1,4).
· Revenue up 14% to £679m (H1 2022: £594m).
· Divisional operating margin increased to 2.3% (H1 2022: 2.2%)(2),
making good progress against the Sustainable Growth Strategy.
· Continued strong balance sheet, with average month-end cash for the
period of £154m (H1 2022: £180m) and a PPP asset portfolio of £46.1m
(June 2022: £47.5m).
· Interim dividend up 36% to 3.0p per share (H1 2022: 2.2p), with
established dividend cover policy of 2.0x annual earnings.
· Additional capital return of up to £15m through the Group's
ongoing share buyback programme.
· Environment business further enhanced by the acquisition of the
specialist businesses, MCS Control Systems and Ham Baker.
· Sustainable Growth Strategy on track to meet our carbon reduction
commitments and financial targets to 2026.
· Full year profit before tax expected to be at the upper end of
current analyst estimates(3).
· Confident outlook with £3.5bn high quality and focused order book
(H1 2022: £3.4bn) with 95% and 79% of projected FY23 and FY24 revenue
secured.
H1 2023 H1 2022 Change
Revenue £679m £594m +£85m
Operating profit before amortisation(1)(,4) £10.8m £6.9m +£3.9m
Divisional operating margin(2) 2.3% 2.2% 0.1ppt
Profit before tax(1)(,4) £11.7m £7.1m +£4.6m
Statutory profit/(loss) before tax £7.2m £(2.6)m +£9.8m
Earnings per share(1)(,4) 8.8p 5.9p +2.9p
Earnings/(loss) per share after exceptional items 5.5p (1.2)p +6.7p
Interim dividend per share 3.0p 2.2p +36%
Average month end cash £154m £180m £(26)m
Order book £3.5bn £3.4bn +£0.1bn
1. Stated before exceptional items. H1 2023 £4.5m exceptional items
relate to our investment in the implementation of cloud-based IT systems (H1
2022 £9.7m exceptional items relate to the acquisition of nmcn's water
business (£6.3m) and the implementation of cloud-based IT systems (£3.4m)).
2. Divisional operating margin is defined as pre-exceptional operating
profit before amortisation as a percentage of revenue. It is stated for the
combined Building and Infrastructure divisions.
3. The range of analysts' estimates for pre-exceptional profit before
tax for the year ending 30 June 2023 is £20.3m to £23.3m based on forecasts
at 1 March 2023.
4. Includes profit on disposal of £3.6m of our interest in a joint
venture arrangement.
Bill Hocking, Chief Executive, commented:
"I am pleased with the Group's performance in the first half of the financial
year, seeing increasing revenue and divisional operating margin, as we
continue to make good progress against our strategic objectives. Our strong
performance is a reflection of our excellent people and well established
relationships with our supply chain and clients.
In line with our Sustainable Growth Strategy, we acquired the specialist
businesses of MCS Control Systems and Ham Baker in the first six months of the
year, which further enhance our Environment business' off-site build and asset
optimisation offering to clients. The integration of these businesses is
progressing well.
Our strong and high quality order book, in our chosen sectors, provides
visibility and security of future workloads. Together with our excellent
people and our strong balance sheet, this gives confidence in our ability to
deliver our Sustainable Growth Strategy and continue to provide long-term
sustainable value for our stakeholders."
Enquiries to:
Galliford Try Bill Hocking, Chief Executive 01895 855001
Andrew Duxbury, Finance Director
Tulchan Communications James Macey White 020 7353 4200
Ed Cropley
This announcement contains inside information. The person responsible for
making this announcement on behalf of Galliford Try is Kevin Corbett, General
Counsel & Company Secretary.
Galliford Try's next Trading Update is scheduled for 12 July 2023.
Presentations
A conference call for analysts and institutional investors will be held at
09:30am GMT today, Wednesday 8 March 2023. To register for this event please
follow this link:
https://stream.brrmedia.co.uk/broadcast/63c0314bddbb3277238ea732
(https://stream.brrmedia.co.uk/broadcast/63c0314bddbb3277238ea732)
Should you wish to ask a question, please dial-in on +44 (0)330 551 0200
quoting 'Galliford Try Half Year' when prompted by an operator, as it will not
be possible to submit a question via the webcast link.
An open presentation and Q&A session for retail investors will be held on
Friday 10 March 2023 at 10:30am GMT. Investors can register for the event via
this
link https://www.investormeetcompany.com/galliford-try-holdings-plc/register-investor
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.investormeetcompany.com%2Fgalliford-try-holdings-plc%2Fregister-investor&data=04%7C01%7Clisa.ducasse%40gallifordtry.co.uk%7Cf9af7548856f4483fad908d8dcc54ccb%7C15813f7f44bc4e8fbab129b341c4f66f%7C1%7C0%7C637502087236467320%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=wTwEDDsMISu0RTaiWd7Qh0RU5J8aE0M%2BAe38YXyHFnA%3D&reserved=0)
SUSTAINABLE GROWTH STRATEGY
Our strategy is to deliver high-quality buildings and infrastructure, in a
socially responsible way, while also providing a sustainable return for our
shareholders. The Group's strategic priorities are a progressive culture,
socially responsible delivery, focus on quality and innovation, and
sustainable financial returns.
Our Sustainable Growth Strategy balances financial targets with wider
commitments and aspirations to create long term value for all our
stakeholders. We are making good progress against our financial targets to
2026, which we announced in September 2021:
Objective KPI Target (2026)
Earning a sustainable return on the value we deliver. Focus on bottom line margin growth Divisional operating margin growth to 3.0%
Disciplined contract selection and sustainable revenue growth Revenue growth towards £1.6bn
Maintain strong balance sheet Operating cash generation
Sustainable dividends Dividend cover of 2.0x
Our clear strategy will:
· retain our strong platform for sustainable growth, with a
particular focus on our progressive culture, robust risk management and
commercial discipline;
· improve our operational performance and drive margin
progression; and
· deliver strong predictable cash flows, margin growth and
sustainable returns.
Our financial targets will be achieved by continued selective bidding,
improving operating margins and disciplined revenue growth in our existing
markets of Highways, Environment and Building. We will target further growth
in complementary and adjacent markets, utilising our balance sheet strength to
deliver increased margins. These adjacent markets include co-development of
Private Rented Sector (PRS) schemes in Building; developing our green retrofit
offering within our Facilities Management team; and increasing our capital
maintenance and asset optimisation capabilities within the existing
Environment business.
RISK MANAGEMENT AND ORDER BOOK
The Group's strategy is founded on commercial discipline and robust risk
management. Our confidence in the Group's future performance is based on our
strong and high quality order book, underpinned by management's discipline and
focus, and robust future pipeline of opportunities. Our sector focus means
c87% of contracts are delivered through frameworks providing a reliable stream
of future work with relationship clients on known terms, conditions and risk
profile.
At 31 December 2022 the Group's order book was £3.5bn (H1 2022: £3.4bn) of
which 91% is in the public and regulated sectors and 9% is in the private
sector. 95% of projected revenue for the current financial year is secured,
and 79% is already secured for the next financial year (H1 2021: 95% and 81%
respectively).
OUTLOOK
We have a strong track record and focus on the public and regulated sectors
and are encouraged by the recent project wins and by the robust pipeline of
new opportunities across our chosen sectors. The UK's planned investment in
economic and social infrastructure supports growth in our core markets. Our
recent specialist acquisitions, of MCS Control Systems and Ham Baker, grow and
further enhance our Environment business' offering in the areas of off-site
build and asset optimisation and demonstrate the strategic benefits of
Galliford Try's strong balance sheet.
Our strong financial position and disciplined focus on risk management enabled
us to successfully manage, without any significant overall impact on trading,
the challenges around inflation and materials shortages, which are now
beginning to ease. During 2022 the length of time taken to enter new contracts
increased, initially in response to rising inflation and later due to delays
in public sector decision making. We are also beginning to see these factors
normalise, which provides further encouragement for the Group's future
outlook.
We continue to trade well, winning a number of key frameworks and contracts in
the period, as well as having sight of a strong future pipeline of projects.
The Group is well placed for the financial year to 30 June 2023, with the
Board anticipating that profit will be towards the upper end of the range of
analyst estimates and we continue to make good progress against our
Sustainable Growth Strategy.
DIVIDEND AND CAPITAL ALLOCATION
The directors have reviewed the Group's pre-exceptional results and outlook
for the current financial year and have declared an interim dividend of 3.0p
per share which will be paid on 14 April 2023 to shareholders on the register
at the close of business on 17 March 2023.
The Group's key capital allocation objectives are:
- Supporting operational requirements and strategic opportunities
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. Furthermore, and as demonstrated by the
acquisitions of the water businesses of nmcn, in October 2021, and more
recently MCS Control Systems and Ham Baker, a strong cash balance sheet
enables the Group to react quickly to such strategic opportunities, that
enhance our capabilities and increase future value.
- Mitigating the effect of future market downturns
The future outlook across our markets remains very encouraging and supports
our strategy. The Group will continue to ensure 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 recent inflationary pressures clearly
demonstrate the value and importance of the Group's risk management framework
and focus.
- Paying sustainable dividends to 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, with a dividend cover of 2.0 times annual earnings.
We continue to assess the cash requirements of the business to ensure the
Group remains well positioned to deliver on its Sustainable Growth Strategy.
Consistent with the framework set out above, 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 2,349,508 shares purchased
and cancelled during the six months to 31 December 2022, at a total cost of
£3.7m.
Environment, Social and Governance (ESG) commitments
Sustainability underpins our long-term success as it helps us to win work,
engages our employees, benefits communities and the environment, and makes us
more efficient. This is why our sustainability commitments are an integral
part of our strategy. We monitor progress against the six pillars of our
sustainability strategy, which are mapped to the UN Sustainable Development
Goals, as set out below:
Health and Safety
The health, safety and wellbeing of our staff, subcontractors, suppliers,
clients and the public remains the Group's top priority. During the period, we
held our Health, Safety and Environmental conference, supporting our 2022/23
'Focus Areas' of inductions, plant, environmental and occupational health.
We continue to focus on leading indicators in our pursuit of 'no harm' and our
behavioural safety programme, Challenging Beliefs, Affecting Behaviour, based
on awareness, training, coaching and visible leadership, forms the backbone of
our approach. This year, we launched our 'Choose the Safe Path' training
programme which involves employees determining the outcome of site based
scenarios to prevent incidents using immersive 3D technology.
People
We pride ourselves on creating a people-orientated, inclusive environment and,
in January 2023, we received Bronze status from The Clear Company, a global
diversity and inclusion specialist, for our commitment to embedding inclusive
practices across our organisation. Progress in this area includes the launch
of our first ever Menopause Policy, as well as a series of blogs and
interviews which put a spotlight on different communities aiming to break down
barriers in the workplace.
Early careers roles (apprentices, trainees and graduates) remain a key area of
focus for both recruitment and development as these roles help us grow our own
talent. We were pleased to have received a Gold Award through The 5% Club's
Employer Audit Scheme which reviews businesses' approaches to inclusion and
social mobility, and we continue to be recognised as a 'Top Graduate &
Apprentice Employer' by TheJobCrowd.
We recognise the rising cost of living that households across the UK are
facing and, in September 2022, we announced a one-off cost of living payment
of up to £750 for more than half our employees and became early adopters of
the new rate of Real Living Wage.
We are making progress with developing our employee value proposition, Grow
Together, which will support our plans to be a destination employer.
Environment and Climate Change
We recognise the urgency of the climate change agenda and the role we have to
play in decarbonising the economy for a greener, more sustainable future.
In June 2021, we pledged to achieve net zero carbon across our own operations
(Scope 1 and 2) by 2030 and to achieve net zero across all activities (Scope
1, 2 and 3) by 2045 at the latest. To provide a clear route to reduce
greenhouse gas emissions, we committed to achieving a verifiable science-based
target validated by the Science Based Targets initiative (SBTi). During 2022,
we performed a full inventory of our Scope 3 emissions, using external carbon
consultants and submitted our proposed reduction targets to the SBTi in
November for validation.
We also participated in CDP for the first time as a standalone construction
company, achieving a climate change score of 'C', which provides a baseline
against which we can monitor progress.
As well as driving down our own carbon footprint, we work with clients to
design and construct low carbon buildings and infrastructure, and share best
practice through our membership of the Construction Leadership Council's
ConstZero initiative.
We continue to deliver our Net Zero Partners programme, an initiative to
collaborate closely with our supply chain and design consultants to help reach
our net zero carbon targets.
Communities
Delivering a legacy of positive social value outcomes is the right thing to do
as a responsible business and is an increasingly important priority for our
clients. Since we began reporting in FY22, we have delivered over £300m in
social and local economic value through a combination of providing work for
the local supply chain, providing opportunities for training and
apprenticeships and job creation.
We recently took part in 'Unlocking Construction', which is developed by New
Futures Network - part of HM Prisons and Probation Service, to promote careers
and opportunities within the industry to prison leavers, aimed at helping
sectors like construction fill skills gaps, while promoting positive change to
prisoners, reducing the likelihood of repeat offending and benefiting wider
society.
We continue to take part in the Considerate Constructors Scheme (CCS), which
assesses sites on criteria including being considerate of local neighbourhoods
and the public and our average CCS audit score increased in the six months to
December 2022 from 41.8 to 43.2, which remains well above the industry average
of 39.8.
Clients
We aim to deliver excellence for our clients. We continue to drive
innovation in modern methods of construction, 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.
In our Building business, we are collaborating with partners from across
Europe to conduct the first UK field trials of an innovative new paint robot.
The AI-supported robot has been designed to carry out large scale decorating
tasks and laboratory testing suggests that deployment of the robot could lead
to productivity improvements of over 30% and cost savings of at least 20%
compared to traditional approaches.
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 (NZCBS), 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.
Our focus on building trusted relationships with our clients is reflected in
the fact that 92% of our order book is repeat business. We were also pleased
to receive the prize for Innovation at the Constructing Excellence National
Awards; Contractor of the Year at the Learning Places Scotland Awards and
Project of the Year at the Education Estates Awards.
Supply Chain
We continue to focus on developing collaborative, long-term relationships with
our supply chain partners through our Advantage through Alignment (AtA)
programme, with 60% of our core trades spend now with aligned subcontractors.
As a signatory of the Prompt Payment Code, we are committed to paying 95% of
supply chain invoices within 60 days. We have made further improvements in how
quickly we pay our suppliers, with 98% now paid within 60 days (FY22: 98%) and
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,
an award-winning collaboration designed to upskill its members through free
training and resources covering sustainability, off-site manufacturing,
Building Information Modelling (BIM), Lean and Management.
Examples of collaboration with our supply chain that drive improvement are the
launch of our Personal Protective Equipment (PPE) and packaging recycling
scheme and the adoption of green 'all-in-one' welfare units on our sites.
FINANCIAL REVIEW
During the first half of the year, the Group delivered a strong performance
resulting in increased revenue and divisional operating margin. Our operating
performance, strong financial position and high quality order book provide
confidence in our future performance.
Revenue for the half year to 31 December 2022 increased 14% to £679.2m (H1
2022: £594.0m), primarily reflecting disciplined growth in Infrastructure.
This includes the benefit of a full six months' trading from the nmcn water
business, acquired in Autumn 2021.
Pre-exceptional operating profit before amortisation increased by 57% to
£10.8m (H1 2022: £6.9m) including the profit on disposal of our interest in
a joint venture arrangement. The combined divisional operating margin was 2.3%
(H1 2022: 2.2%), with improvement in both Building and Infrastructure.
Building generated profit of £9.3m (H1 2021: £8.4m), representing an
operating margin of 2.3% (H1 2022: 2.2%), and Infrastructure generated profit
of £6.5m (H1 2022: £4.3m), representing an operating margin of 2.3% (H1
2022: 2.1%).
There was a £5.0m pre-exceptional operating cost in aggregate across PPP
Investments and Central Costs (H1 2022: £(5.8m)). PPP Investments includes
the £3.6m profit on disposal of an interest in a joint venture entity during
the period. Central Costs were slightly higher than H1 2022 reflecting
increased share-based payment costs and some timing differences. Net interest
income was £2.4m (H1 2022: £1.4m), the increase was largely a result of
improved interest rates.
Pre-exceptional profit before tax was £11.7m (H1 2022: £7.1m). Exceptional
items of £4.5m (H1 2022: £3.4m) have been incurred in the period in relation
to our investment in cloud-based digital finance and commercial systems, part
of our investment in our digital and data capabilities. Full details are set
out in note 6 to the financial information. Post-exceptional profit before
tax was £7.2m (H1 2022: loss £(2.6)m).
The pre-exceptional taxation charge of £2.3m reflects a forecast effective
tax rate of 19.6% (H1 2021: 8.9%) for the year to 30 June 2023, which compares
to the 'standard' effective tax rate of 20.5%.
Based on pre-exceptional earnings per share of 8.8p (H1 2022: 5.9p), and the
outlook for the remainder of the financial year, the Board has declared an
interim dividend of 3.0p per share (H1 2022: 2.2p).
As previously disclosed, the Group provided services in respect of three
contracts with entities owned by a major infrastructure fund of a blue-chip
listed company. Our work on these contracts formally ceased following their
termination in August 2018. Costs were significantly impacted by
client-driven scope changes and the Group has submitted claims and variations
to the value of circa £95m in respect of these costs (June 2022: £95m).
The Group has taken extensive legal advice on our entitlement, and we have
been successful in two adjudications supporting the validity of the Group's
position. The claim is progressing in line with the expected timetable, with
all associated legal and professional costs expensed or incurred. 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. At 31 December 2022, the Group
has reviewed its assessed recoverability in accordance with IFRS 15. Given the
progress, in line with expectations during the period, this is unchanged. The
Group has also reviewed its expected credit loss provision in accordance with
IFRS 9 for which there was no material change in the required provision since
the prior year end.
The Group is well capitalised, maintaining its focus on disciplined cash
management in line with the Board's key capital allocation objectives. The
Group operates with daily net cash, no debt facilities, and no defined benefit
pension liabilities. Average month end cash balances for the first half year
were strong at £154m. This is in line with the Board's expectations given
the recent acquisitions, our ongoing investment in cloud-based digital systems
as previously disclosed, and circa £10m of dividends and capital returns in
the half year. Given these factors, along with some delayed contract starts in
2022, the Board anticipates that average cash for the full year to 30 June
2023 will be at a similar level.
The Group also benefits from a PPP asset portfolio of £46.1m, reflecting a
blended 7.1% discount rate and generating interest income.
The Group is able to adopt appropriate discipline and risk management when
sourcing new work supported by our strong balance sheet which is also
important in providing confidence to our clients and supply chain. We are
committed to pursuing a collaborative and open approach with our supply chain.
Our performance under the Prompt Payment Code remains very strong, with 98% of
invoices paid within 60 days in the period (H1 2022: 98%) and average payment
being made in 26 days (H1 2022: 26 days).
The acquisition of MCS Control Systems in July 2022 and Ham Baker in November
2022 have resulted in an increase in intangible assets of £0.3m and in
goodwill of £3.8m. The acquisitions further enhance the specialist offering
in our Environment business and further increase our operational capabilities.
OPERATIONAL REVIEW
Building
The Group's Building business operates through regional offices, serving a
range of public and commercial clients across the UK, with a focus on the
Education, Defence and Custodial, Health and Commercial sectors, where we
have core and proven strengths. Building also has a substantial presence in
Scotland operating as Morrison Construction. Our Facilities Management
business complements these operations by providing building maintenance
services and we continue to grow the capabilities of this operation, with a
specific focus on decarbonising existing buildings through retrofit and other
interventions.
H1 2023 H1 2022 Change
Revenue (£m) 399.7 386.2 3%
Operating profit before amortisation (£m) 9.3 8.4 11%
Operating margin (%) 2.3 2.2 0.1ppt
Order book (£bn) 2.1 2.0 5%
Building generated revenue of £399.7m (H1 2022: £386.2m). Revenue is in line
with the prior year as a result of some new contract starts delayed as a
result of increased length of public sector and some private client
procurement in 2022. Operating profit before amortisation was £9.3m (H1 2022:
£8.4m), resulting in an operating margin of 2.3% (H1 2022: 2.2%). We
continue to target margin progression reflecting the performance of projects
across the business and our strategy of focusing on bottom line growth.
Building currently has an order book of £2.1bn (H1 2022: £2.0bn), including
30% in Education, 25% in Defence and Custodial, 17% in Facilities Management
and 8% in Health.
Infrastructure
Our Infrastructure businesses, primarily Highways and Environment
(incorporating principally our activities in water and wastewater), carry out
civil engineering projects across the UK. This business has established
long-term relationships with customers where we have a strong track record on
delivery, focusing on public and regulated sector work and bids with early
contractor involvement.
H1 2023 H1 2022 Change
Revenue (£m) 276.6 204.4 35%
Operating profit before amortisation (£m) 6.5 4.3 51%
Operating margin (%) 2.3 2.1 0.2ppt
Order book (£bn) 1.4 1.4 -
Infrastructure revenue was up 35% to £276.6m (H1 2022: £204.4m). This
includes the benefit of the nmcn water business acquired in Autumn 2021, along
with high level of activity across our Environment operations. Operating
profit before amortisation and exceptional items was £6.5m (H1 2022:
£4.3m), with a 2.3% operating margin (H1 2022: 2.1%) showing good progress.
Our enlarged Environment business, including the recent acquisitions of MCS
Control Systems and Ham Baker, provides enhanced and specialist service
delivery across UK operations including water, engineering, off-site build and
asset optimisation, and asset security. The acquisitions, in the first half of
the financial year, have provided complementary and specialist capabilities in
the water sector. This enhanced capability puts the Environment business in
a strong position to support our clients, as shown by our recent collaboration
with Siemens to accelerate the integration of digital technologies across the
lifecycle of water and wastewater projects.
During the first six months of the year, Infrastructure won a number of
contracts and positions on frameworks including 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 (in October 2021).
Infrastructure currently has an order book of £1.4bn (H1 2022: £1.4bn)
comprising £550m in Highways and £840m in Environment.
PPP Investments
PPP Investments delivers major building and infrastructure projects through
public private partnerships, generating work for the wider Group in the
process.
PPP Investments has continued to move its focus towards co-development of
Private Rented Sector (PRS) projects. The business is working towards reaching
financial close on its first consented scheme, which will allow construction
to commence. At the period-end it was preferred bidder on two further PRS
schemes with a gross development value of c£200m and anticipates further
opportunities in the future.
H1 2023 H1 2022 Change
Revenue (£m) 2.9 3.4 (15)%
Operating profit/(loss) (£m) 1.5 (0.5) £2.0m
Asset valuation (£m) 46.1 48.3 £(2.2)m
Net interest income (£m) 2.0 2.0 -
For the first half of the financial year, revenue was £2.9m (H1 2022:
£3.4m), on which the operating profit was £1.5m (H1 2022: £(0.5)m loss).
This includes £3.6m relating to the profit on disposal of our interest in a
joint venture arrangement.
At 31 December 2022 the Group directors' valuation of our PPP portfolio was
£46.1m (H1 2022: £48.3m), reflecting a blended 7.1% discount rate (H1
2022: 7.0%). These assets contribute to our balance sheet strength and
generated interest income in the period of £2.0m (H1 2022: £2.0m).
PRINCIPAL RISKS AND UNCERTAINTIES
The directors consider that the principal risks and uncertainties which may
have a material impact on the Group's performance in the second half of the
financial year remain primarily the same as those outlined on pages 44 to 47
of the Group's annual report and financial statements for the year ended 30
June 2022. Those risks the Group considers to be of particular importance and
highlighted as the principal risks in focus within the 30 June 2022 annual
report are; work winning, project delivery, resources and regulatory
compliance.
BOARD
On 18 January 2023 the Group announced that Gavin Slark, Non-executive
Director, had decided to step down from the board on 31 March 2023, after over
seven years on the board. The Board is grateful for Gavin's contribution to
the Group over the years and wishes him every success in the future.
Condensed consolidated income statement
for the half year ended 31 December 2022 (unaudited)
Half year to Half year to Year to
31 December 2022 31 December 2021 30 June 2022 (audited)
Pre-exceptional items Exceptional items Total Pre-exceptional items Exceptional items Total Pre-exceptional items Exceptional items Total
(note 6) (note 6) (note 6)
Notes £m £m £m £m £m £m £m £m £m
Revenue 4 679.2 - 679.2 594.0 - 594.0 1,237.2 - 1,237.2
Cost of sales (634.0) - (634.0) (554.5) (5.2) (559.7) (1,151.5) (5.8) (1,157.3)
Gross profit/(loss) 45.2 - 45.2 39.5 (5.2) 34.3 85.7 (5.8) 79.9
Other income 5 3.6 - 3.6 - - - - - -
Administrative expenses (39.5) (4.5) (44.0) (33.8) (4.5) (38.3) (69.9) (7.9) (77.8)
Operating profit/(loss) 9.3 (4.5) 4.8 5.7 (9.7) (4.0) 15.8 (13.7) 2.1
Share of post-tax profit from joint ventures - - - - - - 0.4 - 0.4
Finance income 7 3.2 - 3.2 2.1 - 2.1 4.3 - 4.3
Finance costs 7 (0.8) - (0.8) (0.7) - (0.7) (1.4) - (1.4)
Profit/(loss) before income tax 11.7 (4.5) 7.2 7.1 (9.7) (2.6) 19.1 (13.7) 5.4
Income tax (expense)/ credit 8 (2.3) 1.0 (1.3) (0.6) 1.9 1.3 (1.7) 2.6 0.9
Profit/(loss) for the period from continuing operations 9.4 (3.5) 5.9 6.5 (7.8) (1.3) 17.4 (11.1) 6.3
Earnings /(loss) per share
Basic
- Profit/(loss) from continuing operations attributable to ordinary
shareholders
10 8.8p 5.5p 5.9p (1.2)p 16.0 5.8p
Diluted
- Profit/(loss) from continuing operations attributable to ordinary
shareholders
10 8.2p 5.1p 5.6p (1.2)p 15.0 5.5p
The notes are an integral part of the condensed consolidated half year
financial statements.
Condensed consolidated statement of comprehensive income
for the half year ended 31 December 2022 (unaudited)
Half year to Half year to Year to
31 December 31 December 30 June 2022
2022 2021 (audited)
Notes £m £m £m
Profit/(loss) for the period 5.9 (1.3) 6.3
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or loss
Movement in fair value of PPP and other investments - continuing operations 12 (1.0) (0.4) (0.9)
Other comprehensive expense for the period net of tax (1.0) (0.4) (0.9)
Total comprehensive income/(expense) for the period 4.9 (1.7) 5.4
The notes are an integral part of the condensed consolidated half year
financial statements.
Condensed consolidated balance sheet
at 31 December 2022 (unaudited)
31 December 2022 31 December 2021 (restated - note 21) 30 June 2022
(audited)
Notes £m £m £m
Assets
Non-current assets
Intangible assets 19 7.6 10.3 8.8
Goodwill 11 92.9 88.2 88.2
Property, plant and equipment 7.0 3.6 7.1
Right of use assets 27.6 21.9 24.5
Investments in joint ventures 0.1 0.2 0.3
PPP and other investments 12 46.1 48.3 47.5
Deferred income tax assets 13.4 14.1 14.0
Total non-current assets 194.7 186.6 190.4
Current assets
Trade and other receivables 13 264.3 227.5 243.0
Current income tax assets 3.1 5.7 3.1
Cash and cash equivalents 195.8 211.1 218.9
Total current assets 463.2 444.3 465.0
Total assets 657.9 630.9 655.4
Liabilities
Current liabilities
Trade and other payables 14 (476.1) (444.6) (471.1)
Lease liabilities (11.2) (8.5) (9.9)
Provisions for other liabilities and charges 15 (26.6) (37.2) (27.4)
Total current liabilities (513.9) (490.3) (508.4)
Non-current liabilities
Lease liabilities (16.7) (13.4) (14.9)
Total non-current liabilities (16.7) (13.4) (14.9)
Total liabilities (530.6) (503.7) (523.3)
Net assets 127.3 127.2 132.1
Equity
Ordinary share capital 54.3 55.5 55.5
Other reserves 133.4 118.4 132.2
Retained earnings (60.4) (46.7) (55.6)
Total shareholders' equity 127.3 127.2 132.1
The notes are an integral part of the condensed consolidated interim financial
statements.
Condensed consolidated statement of changes in equity
for the half year ended 31 December 2022 (unaudited)
Notes Ordinary share capital Other reserves Retained earnings Total shareholders' equity
£m £m £m £m
As at 31 December 2022
At 30 June 2022 55.5 132.2 (55.6) 132.1
Profit for the period - - 5.9 5.9
Other comprehensive expense - - (1.0) (1.0)
Total comprehensive expense for the period - - 4.9 4.9
Transactions with owners:
Dividends 9 - - (6.4) (6.4)
Share-based payments - - 1.8 1.8
Purchase of own shares - - (5.1) (5.1)
Cancellation of shares 10 (1.2) 1.2 - -
At 31 December 2022 54.3 133.4 (60.4) 127.3
As at 31 December 2021
At 30 June 2021 55.5 118.4 (39.8) 134.1
Profit for the period - - (1.3) (1.3)
Other comprehensive income - - (0.4) (0.4)
Total comprehensive income for the period - - (1.7) (1.7)
Transactions with owners:
Dividends 9 - - (3.9) (3.9)
Share-based payments - - 0.7 0.7
Purchase of own shares - - (2.0) (2.0)
At 31 December 2021 55.5 118.4 (46.7) 127.2
As at 30 June 2022 (audited)
At 30 June 2021 55.5 118.4 (39.8) 134.1
Profit for the year - - 6.3 6.3
Other comprehensive income - - (0.9) (0.9)
Total comprehensive income for the year - - 5.4 5.4
Transactions with owners:
Dividends 9 - - (6.3) (6.3)
Purchase of shares - - (3.4) (3.4)
Share-based payments - - 2.3 2.3
Recycling of retained earnings to merger reserve on reversal of impairment of - 13.8 (13.8) -
investment in Galliford Try Limited
At 30 June 2022 55.5 132.2 (55.6) 132.1
The notes are an integral part of the condensed consolidated half year
financial statements.
Condensed consolidated statement of cash flows
for the half year ended 31 December 2022 (unaudited)
Half year to Half year to Year to
31 December 2022 31 December 2021 (restated - note 21) 30 June 2022 (audited)
£m
£m
£m
Cash flows from operating activities
Profit/(loss) for the period 5.9 (1.3) 6.3
Adjustments for:
Income tax expense/(credit) 1.3 (1.3) (0.9)
Net finance income (2.4) (1.4) (2.9)
Depreciation and amortisation 8.1 7.7 14.5
Profit on disposal of joint venture (3.6) - -
Share-based payments 1.8 0.8 2.3
Share of post-tax profits from joint ventures - - (0.4)
Net cash generated from operations before changes in working capital 11.1 4.5 18.9
(Increase)/decrease in trade and other receivables (16.0) 17.9 1.2
(Decrease)/increase in trade and other payables (1.7) (19.6) 6.7
Decrease in provisions (0.8) (1.5) (11.3)
Net cash (used in)/generated from operations (7.4) 1.3 15.5
Interest received 3.2 2.1 4.3
Interest paid (0.8) (0.7) (1.4)
Corporation tax (paid)/received (0.5) (0.2) 4.4
Net cash (used in)/generated from operating activities (5.5) 2.5 22.8
Cash flows from investing activities
Dividends received from joint ventures and associates - - 0.3
Increase in amounts due from joint ventures (1.8) - -
Decrease in amounts due from joint ventures - 3.9 5.0
PPP loan repayments 0.4 0.4 0.7
Proceeds from disposal of PPP and other investments 3.6 - -
Acquisition of business combination, net of cash/borrowings (1.0) (0.3) (0.3)
Proceeds from disposal of property, plant and equipment - - 0.1
Acquisition of property, plant and equipment (1.1) (0.6) (5.0)
Net cash generated from investing activities 0.1 3.4 0.8
Cash flows from financing activities
Repayment of lease liabilities (6.2) (5.1) (11.2)
Purchase of own shares (5.1) (2.0) (3.4)
Dividends paid to Company shareholders (6.4) (3.9) (6.3)
Net cash used in financing activities (17.7) (11.0) (20.9)
Net (decrease)/increase in cash and cash equivalents (23.1) (5.1) 2.7
Cash and cash equivalents at beginning of period 218.9 216.2 216.2
Cash and cash equivalents at end of period 195.8 211.1 218.9
Notes to the condensed consolidated half year financial statements
for the half year ended 31 December 2022 (unaudited)
1 Basis of preparation
Galliford Try Holdings plc is a public limited company incorporated in England
and Wales and domiciled in the UK. The address of its registered office is
Blake House, 3 Frayswater Place, Cowley, Uxbridge, Middlesex, UB8 2AD. The
Company has its listing on the London Stock Exchange. This condensed
consolidated half year financial information was approved for issue on 8 March
2023.
This condensed consolidated half year financial information does not comprise
statutory financial statements within the meaning of Section 434 of the
Companies Act 2006. Statutory financial statements for the year ended 30
June 2022 were approved by the board of directors on 21 September 2022 and
delivered to the Registrar of Companies. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under Section 498 of the Companies
Act 2006.This condensed consolidated half year financial information has been
reviewed, not audited. The auditors' review opinion is included in this
report.
This condensed consolidated half year financial information for the half year
ended 31 December 2022 has been prepared in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority and with UK
adopted International Accounting Standard 34, "Interim financial reporting".
The condensed consolidated half year financial information should be read in
conjunction with the annual financial statements for the year ended 30 June
2022, which have been prepared in accordance with UK adopted International
Accounting Standards.
The Group's activities, together with the factors likely to affect the future
development, performance and position of the business are set out in this half
year report. The annual financial statements for the year ended 30 June 2022
included the Group's objectives, policies and processes for managing capital,
its financial risk management objectives, details of its financial instruments
and hedging activities and its exposure to credit risk and liquidity risk.
After making enquiries, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for at least
twelve months from the date of signing the condensed consolidated half year
information, and accordingly continue to adopt the going concern basis of
preparation.
2 Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 30 June 2022. There are no new
standards effective for the first time in the period beginning 1 July 2022
which have a material impact on the Group's reported results.
Critical accounting estimates and judgements
The Group's principal judgements and key sources of estimation uncertainty
remain unchanged since the year-ended 30 June 2022. The principal judgements
and key sources of estimation uncertainty are set out in note 1 on pages 115 -
117 of the annual financial statements for the year ended 30 June 2022.
The Group's five largest unagreed variations and claims positions as at 31
December 2022 are summarised in aggregate below, the most significant of which
relates to three contracts with entities owned by a major infrastructure fund
of a blue-chip listed company (note 13).
£m
Overall contract value (including total estimated end of contract variations 347.0
and claims after IFRS 15 constraints)
Revenue in the period 23.8
Total estimated end of contract variations and claims before IFRS 15 150.6
constraints
Total estimated end of contract variations and claims after IFRS 15 79.3
constraints
These five positions represent the most significant estimates of revenue. The
revenue recognised in the period in relation to the subsequent five largest
unagreed variations and claims total £11.7m.
3 Segmental reporting
Segmental reporting is presented in the condensed consolidated half year
financial statements in respect of the Group's business segments, which are
the primary basis of segmental reporting. The business segmental reporting
reflects the Group's management and internal reporting structure. Segmental
results include items directly attributable to the segment as well as those
that can be allocated on a reasonable basis. As the Group has no material
activities outside the UK, segmental reporting is not required by geographical
region.
The chief operating decision-makers ("CODM") have been identified as the
Group's Chief Executive and Finance Director. The CODM review the Group's
internal reporting in order to assess performance and allocate resources.
Management has determined the operating segments of the resulting Group to
be Building, Infrastructure, PPP Investments and Central (primarily
representing central overheads).
The CODM assess the performance of the operating segments based on a measure
of adjusted earnings before finance costs, amortisation, exceptional items and
taxation. This measurement basis excludes the effects of non-recurring
expenditure from the operating segments, such as restructuring costs and
impairments when the impairment is the result of an isolated, non-recurring
event. Interest income and expenditure are included in the result for each
operating segment that is reviewed by the CODM. Other information provided
to them is measured in a manner consistent with that in the financial
statements.
Half year to 31 December 2022 Building Infrastructure PPP Central Total
£m £m Investments £m £m
£m
Revenue 399.7 276.6 2.9 - 679.2
Pre-exceptional operating profit/(loss) before amortisation of intangibles(1) 9.3 6.5 1.5 (6.5) 10.8
Finance income - 0.3 2.0 0.9 3.2
Finance costs (0.3) (0.3) - (0.2) (0.8)
Pre-exceptional profit/(loss) before amortisation and taxation 9.0 6.5 3.5 (5.8) 13.2
Exceptional items - - - (4.5) (4.5)
Amortisation of intangible assets (0.5) (0.5) - (0.5) (1.5)
Profit/(loss) before taxation 8.5 6.0 3.5 (10.8) 7.2
Income tax credit (1.3)
Profit for the period 5.9
(1) PPP Investments includes other income as detailed in note 5.
Half year to 31 December 2021 Building Infrastructure PPP Central Total
£m £m Investments £m £m
£m
Revenue 386.2 204.4 3.4 - 594.0
Pre-exceptional operating profit/(loss) before amortisation of intangibles 8.4 4.3 (0.5) (5.3) 6.9
Finance income - 0.1 2.0 - 2.1
Finance costs (0.2) (0.3) - (0.2) (0.7)
Pre-exceptional profit/(loss) before amortisation and taxation 8.2 4.1 1.5 (5.5) 8.3
Exceptional items - (6.3) - (3.4) (9.7)
Amortisation of intangible assets (0.5) (0.2) - (0.5) (1.2)
Profit/(loss) before taxation 7.7 (2.4) 1.5 (9.4) (2.6)
Income tax credit 1.3
Loss for the period (1.3)
Year ended 30 June 2022 (audited) Building Infrastructure PPP Central Total
£m £m Investments £m £m
£m
Revenue 789.1 441.9 6.2 - 1,237.2
Pre-exceptional operating profit/(loss) before amortisation of intangibles 18.9 10.8 (0.9) (10.3) 18.5
Share of post tax profits from joint ventures - - 0.4 - 0.4
Finance income - - 3.9 0.4 4.3
Finance costs (0.3) (0.7) - (0.4) (1.4)
Profit/(loss) before amortisation and taxation 18.6 10.1 3.4 (10.3) 21.8
Exceptional items - (7.7) - (6.0) (13.7)
Amortisation of intangible assets (1.0) (0.7) - (1.0) (2.7)
Profit/(loss) before taxation 17.6 1.7 3.4 (17.3) 5.4
Income tax credit 0.9
Profit for the year 6.3
Inter-segment revenue, which is priced on an arm's length basis, is eliminated
from revenue above. In the half year to 31 December 2022 this amounted to
£26.7m (31 December 2021: £18.2m; 30 June 2022: £38.8m) for continuing
operations, of which £0.1m (31 December 2020: £0.1m; 30 June 2022: £nil)
was in Building, £16.2m (31 December 2021: £10.8m; 30 June 2022: £21.7m)
was in Infrastructure and £10.4m (31 December 2021: £7.3m; 30 June 2022:
£17.1m) was in Central costs.
Half year to 31 December 2022 Building Infrastructure PPP Central Total
£m £m Investments £m £m
£m
Balance Sheet
Goodwill and intangible assets 41.5 57.8 - 1.2 100.5
Working capital employed (57.2) (160.4) 43.0 5.6 (169.0)
Net cash 127.1 20.0 (8.8) 57.5 195.8
Net assets/(liabilities) 111.4 (82.6) 34.2 64.3 127.3
Total Group liabilities (530.6)
Total Group assets 657.9
Half year to 31 December 2021 Building Infrastructure (restated - note 21) PPP Central Total
£m £m Investments £m £m
£m
Balance Sheet
Goodwill and intangible assets 42.4 53.9 - 2.2 98.5
Working capital employed (65.5) (164.1) 42.2 5.0 (182.4)
Net cash 77.6 55.9 (11.2) 88.8 211.1
Net assets/(liabilities) 54.5 (54.3) 31.0 96.0 127.2
Total Group liabilities (restated) (503.7)
Total Group assets (restated) 630.9
Year ended 30 June 2022 (audited) Infrastructure PPP Central Total
£m Investments £m £m
Building £m
£m
Balance Sheet
Goodwill and intangible assets 42.0 53.3 - 1.7 97.0
Working capital employed (92.8) (139.5) 41.9 6.6 (183.8)
Net cash 154.9 (1.4) (9.6) 75.0 218.9
Net assets/(liabilities) 104.1 (87.6) 32.3 83.3 132.1
Total Group liabilities (523.3)
Total Group assets 655.4
4 Revenue
Nature of revenue streams
(i) Building & Infrastructure segments
Our Construction business operates nationwide, working with clients
predominantly in the public and regulated sectors. Projects include the
construction of assets (with services including design and build, construction
only and refurbishment) in addition to the maintenance, renewal, upgrading and
managing of services across utility and infrastructure assets.
Revenue stream Nature, timing of satisfaction of performance obligations and significant
payment terms
Fixed price A number of projects within these segments are undertaken using fixed-price
contracts.
Contracts are typically accounted for as a single performance obligation; even
when a contract (or multiple combined contracts) includes both design and
build elements, they are considered to form a single performance obligation as
the two elements are not distinct in the context of the contract given that
each is highly interdependent on the other.
The Group typically receives payments from the customer based on a contractual
schedule of value that reflects the timing and performance of service
delivery. Revenue is therefore recognised over time (the period of
construction) based on an input model (reference to costs incurred to date).
Un-invoiced amounts are presented as contract assets.
No significant financing component typically exists in these contracts.
Cost-reimbursable A number of projects within these segments are undertaken using
open-book/cost-plus/target-price (possibly with a pain/gain share mechanism)
contracts.
Contracts are typically accounted for as a single performance obligation with
the majority of these contracts including a build phase only.
The Group typically receives payments from the customer based on actual costs
incurred. Revenue is therefore recognised over time (the period of
construction) based on an input model (reference to costs incurred to date).
Un-invoiced amounts are presented as contract assets.
No significant financing component typically exists in these contracts.
Facilities management Contracts undertaken within the Building segment that provide full life-cycle
solutions to clients, are accounted for as a single performance obligation,
with revenue recognised over time and typically on a straight-line basis.
(ii) Investments segment
Through public private partnerships, the business leads bid consortia and
arranges finance, makes debt and equity investments (which are recycled) and
manages construction through to operations.
Revenue stream Nature, timing of satisfaction of performance obligations and significant
payment terms
PPP Investments The Group has investments in a number of PPP Special Purpose Vehicles (SPVs),
delivering major building and infrastructure projects.
The business additionally provides management services to the SPVs under
Management Service Agreements (MSA). Revenue for these services is typically
recognised over time as and when the service is delivered to the customer.
Revenue for reaching project financial close (such as success fees) is
recognised at a point in time, at financial close (when control is deemed to
pass to the customer).
Disaggregation of revenue
The Group considers the split of revenue by operating segment to be the most
appropriate disaggregation. All revenue has been derived from performance
obligations settled over time.
5 Other income
The Group disposed of its 60% interest in Community Ventures Partnerships
Limited on 11 November 2022, recognising a gain on disposal of £3.6m.
6 Exceptional items
Half year to Half year to Year to 30 June 2022
31 December 2022 31 December 2021 (audited)
£m £m £m
Acquisition and integration related costs(1)- cost of sales - 5.2 5.8
Acquisition and integration related costs(1)- administrative expenses - 1.1 1.9
Implementation costs of cloud based arrangements(2) 4.5 3.4 6.0
Exceptional items 4.5 9.7 13.7
An associated tax credit of £1.0m (31 December 2021: £1.9m, 30 June 2022
£2.6m) has been recognised.
(1 ) The Group acquired the Water business of nmcn plc (in
administration) on 7 October 2021 and incurred acquisition and integration
related costs during the half year to 31 December 2021 and the year to 30
June 2022. This was predominantly made up of legal, professional, integration
and restructuring costs recognised in administrative expenses, and specific
staff costs incurred during the period of site closures following nmcn plc
entering administration that were recognised in cost of sales. No further
costs of this nature are anticipated relating to the nmcn acquisition. In the
half year to 31 December 2022, the Group did not recognise any exceptional
costs in relation to the acquisition of MCS Control Systems Limited or Ham
Baker.
(2 ) The Group incurred customisation and configuration costs
associated with the move to a cloud-based computing arrangement during the
period. Taking into account the IFRIC Agenda Decision issued by the IFRS IC in
March 2021, the Group has analysed the costs and concluded that these costs
should be expensed in the period. In accordance with the Group's existing
accounting policy, management considers that the costs should be separately
disclosed as exceptional because they are significant and irregular. The
implementation of the new system is ongoing and further costs are expected to
be incurred up to its implementation date.
7 Net finance income
Group Half year to Half year to Year to 30 June 2022
31 December 2022 31 December 2021 (audited)
£m £m £m
Interest receivable on bank deposits 0.9 0.1 0.4
Interest receivable from PPP investments and joint ventures 2.0 2.0 3.9
Other 0.3 - -
Finance income 3.2 2.1 4.3
Other (including interest on lease liabilities) (0.8) (0.7) (1.4)
Finance costs (0.8) (0.7) (1.4)
Net finance income 2.4 1.4 2.9
8 Income tax expenses
The taxation expense on profit for pre-exceptional operations for the period
of 19.6% (31 December 2021: 8.9%, 30 June 2022: 8.9%) reflects the expected
pre-exceptional effective tax rate for the year to 30 June 2023. The
substantially lower than standard rates applicable to 31 December 2021 and 30
June 2022 reflect the recognition of previously unrecognised tax losses.
9 Dividends
The following dividends were paid and recognised by the Company in each
accounting period presented:
Half year to 31 December 2022 Half year to 31 December 2021 Year to 30 June 2022 (audited)
£m pence per share £m pence per share £m pence per share
Previous year net final 6.4 5.8 3.9 3.5 3.9 3.5
Current period interim - - - - 2.4 2.2
Dividend recognised in the year 6.4 5.8 3.9 3.5 6.3 5.7
The following dividends were declared by the Company in respect of each
accounting period presented:
Half year to 31 December 2022 Half year to 31 December 2021 Year to 30 June 2022 (audited)
£m pence per share £m pence per share £m pence per share
Interim 3.2 3.0 2.4 2.2 2.4 2.2
Final - - - - 6.4 5.8
Dividend relating to the year 3.2 3.0 2.4 2.2 8.8 8.0
The interim dividend for 2023 of 3.0p per share was approved by the board on 8
March 2023 and has not been included as a liability as at 31 December 2022.
This interim dividend will be paid on 14 April 2023 to shareholders who are on
the register at the close of business on 17 March 2023.
10 Earnings per share
Basic and diluted earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year, excluding those held by the Employee Share Trust,
which are treated as cancelled.
The average number of shares is diluted by reference to the average number of
potential ordinary shares held under option in the period. The dilutive
effects amounts to the number of ordinary shares which would be purchased
using the aggregate difference in value between the market value of shares and
the share option price. Only shares that have met their cumulative
performance criteria are included in the dilution calculation. The Group has
two classes of potentially dilutive ordinary shares: those share options
granted to employees where the exercise price is less than the average market
price of the Company's ordinary shares during the year and the contingently
issuable shares under the Group's long term incentive plans. A loss per
share cannot be reduced through dilution, hence this dilution is only applied
where the Group has reported a profit.
The earnings and weighted average number of shares used in the calculations
are set put below.
Half year to 31 December 2022 Half year to 31 December 2021 Year to 30 June 2022 (audited)
Earnings Weighted average number of shares Per share amount pence Earnings £m Weighted average number of shares Per share amount pence Earnings £m Weighted average number of shares Per share amount pence
£m
Total operations
Basic EPS - pre-exceptional
Pre-exceptional earnings attributable to ordinary shareholders 9.4 107,218,581 8.8 6.5 109,654,473 5.9 17.4 109,016,667 16.0
Basic EPS
Earnings attributable to ordinary shareholders post exceptional items 5.9 107,218,581 5.5 (1.3) 109,654,473 (1.2) 6.3 109,016,667 5.8
Effect of dilutive securities:
Options n/a 8,070,133 n/a n/a 6,033,488 n/a n/a 6,627,132 n/a
Diluted EPS - pre-exceptional 9.4 115,288,713 8.2 6.5 115,687,961 5.6 17.4 115,643,799 15.0
Diluted EPS 5.9 115,288,713 5.1 (1.3) 115,687,961 (1.2) 6.3 115,643,799 5.5
During the period to 31 December 2022, the Group purchased and cancelled
2,349,508 shares at a total cost of £3.7m, as part of the share buyback
programme announced in September 2022. This has resulted in a capital
redemption reserve recorded within "other reserves" totalling £1.2m,
representing the nominal value of the shares cancelled.
11 Goodwill
Goodwill is allocated to the Group's cash-generating units (CGUs) identified
according to business segment. The goodwill is attributable to the following
business segments:
31 December 2022 31 December 2021 (restated - note 21) 30 June 2022
(audited)
£m £m £m
Building 40.0 40.0 40.0
Infrastructure 52.9 48.2 48.2
92.9 88.2 88.2
As stated in the annual financial statements for the year ended 30 June 2022,
detailed impairment reviews were carried out for all business segments.
Consideration has been given as to whether any events have occurred since
the year ended 30 June 2022 which could give rise to an impairment. No
impairments have been identified from these reviews.
The increase in goodwill relates to acquisitions in the period (note 19) and
the finalisation of the acquisition accounting of nmcn in accordance with IFRS
3.
12 PPP and other investments
31 December 2022 31 December 2021 30 June 2022
£m £m (audited)
£m
At 1 July 47.5 49.1 49.1
Disposals and subordinated loan repayments (0.4) (0.4) (0.7)
Movement in fair value (1.0) (0.4) (0.9)
At 31 December and 30 June 46.1 48.3 47.5
The portfolio reflects a blended discount rate of 7.1% (31 December 2021:
7.0%; 30 June 2022: 7.0%), with the discount rates applied ranging from 6.0%
to 7.8% (31 December 2021: 6.0% to 7.5%; 30 June 2022: 6.0% to 7.5%). An
increase/reduction of 0.5% (which is considered an appropriate range given the
relatively low risk associated with the portfolio) would result in a
corresponding decrease/increase in the fair value of approximately £1.7m (31
December 2021: £1.9m; 30 June 2022: £1.9m).
13 Trade and other receivables
31 December 2022 31 December 2021 (restated - note 21) 30 June 2022
(audited)
£m £m £m
Amounts falling due within one year:
Trade receivables 42.3 53.9 46.0
Less: Provision for impairment of receivables (0.1) (0.1) (0.1)
Trade receivables - net 42.2 53.8 45.9
Contract assets 193.8 145.9 173.4
Amounts due from joint venture undertakings 2.9 2.2 1.1
Research and development expenditure credits 4.3 2.3 4.5
Prepayments and other receivables 21.1 23.3 18.1
264.3 227.5 243.0
As previously disclosed, the Group provided services in respect of three
contracts with entities owned by a major infrastructure fund of a blue-chip
listed company. Costs were significantly impacted by client-driven scope
changes and the Group has submitted claims to the value of £95m in respect of
these costs. Our work on these contracts formally ceased on their termination
in August 2018. The Group has taken extensive advice on our entitlement and we
have been successful in two adjudications supporting the validity of the
Group's position. The claim is progressing in line with the original expected
timetable. The Group has incurred significant legal and professional costs and
may continue to do so, with all associated legal and professional costs
expensed as incurred.
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. While the Group has
submitted a total claim value of £95m in respect of these costs within the
Statement of Case, revenue has been constrained. We have constrained the
revenue to a percentage recoverable that is lower than that successfully
recovered from the adjudications and variations previously agreed on this
contract. The underlying principle supporting the validity and recovery of the
claims and variations is not considered to be impacted by the passage of time,
which is driven by the nature of dispute resolution in this sector. Given the
progress, in line with expectations during the period, this is unchanged. It
is possible that the process of the arbitration may not be concluded within
the coming financial year.
Whilst the entities are owned by a major infrastructure fund of a blue-chip
listed company, and we expect that the amounts will be repaid, we have
assessed any expected credit loss provision in accordance with IFRS 9 to take
into account their investment structure. Our assessment of the credit
worthiness of the underlying contracting entities includes reviewing their
latest audited financial statements to 31 December 2021 (as well as their
immediate parent and investor whose latest filed financial statements are to
31 December 2021), for which the audit opinion includes a disclaimer of
opinion in relation to material uncertainties in respect of claims and the
potential impact on going concern. The Group does not consider there to be a
change in credit risk over the course of the period to 31 December 2022 and
consequently, there has been no material change to the expected credit loss
provision since 30 June 2022, which is discussed further in note 1 accounting
policies of the Group's annual report and financial statements for the year
ended 30 June 2022.
There has been no change to our assessment of the constrained revenue under
IFRS 15 or the expected credit loss under IFRS 9 in the period to 31 December
2022. The Group continues to vigorously defend the counterclaims made by the
counterparty, that we consider are without merit, and as such no amounts have
been provided on the basis the Group considers the possibility of an outflow
of resources to be remote.
14 Trade and other payables
31 December 2022 31 December 2021 (restated - note 21) 30 June 2022
(audited)
£m £m £m
Trade payables 106.8 73.4 102.3
Contract liabilities 116.7 127.3 104.4
Other taxation and social security payable 43.3 34.7 29.9
Accruals and other payables 209.3 209.2 234.5
476.1 444.6 471.1
15 Provisions for other liabilities and charges
Group Onerous contracts Rectification Total
£m
At 1 July 2022 (4.6) (22.8) (27.4)
Utilised 2.2 1.7 3.9
Additions (2.2) (0.9) (3.1)
At 31 December 2022 (4.6) (22.0) (26.6)
Group Onerous contracts Rectification Total
£m
At 1 July 2021 (0.8) (24.2) (25.0)
Utilised 1.7 3.9 5.6
Additions(1) (13.8) (4.0) (17.8)
At 31 December 2021 (restated)(2) (12.9) (24.3) (37.2)
Group Onerous contracts Rectification Total
£m
At 1 July 2021 (0.8) (24.2) (25.0)
Utilised 10.2 3.7 13.9
Additions(1) (14.0) (2.3) (16.3)
At 30 June 2022 (4.6) (22.8) (27.4)
(1) Additions include £13.7m acquired as part of the nmcn business
combination.
(2) Onerous contract and rectification provisions were previously reported
within accruals but should have been presented as provisions (see note 21).
Onerous contract provisions are made on loss-making contracts the Group is
obliged to complete.
Rectification provisions are made for potential claims and defects for
remedial works against work completed by the Group.
Due to the nature of the provisions, the timing of any potential future
outflows is uncertain, however they are expected to be utilised within the
Group's normal operating cycle, and accordingly are classified as current
liabilities. Of the total provisions, £18.2m (31 December 2021: £18.8m; 30
June 2022: £18.8m) is likely to be utilised in 1-3 years with the remainder
utilised within 12 months.
16 Financial instruments
The Group's activities expose it to a variety of financial risks. The
condensed consolidated half year financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements; they should be read in conjunction with the Group's
financial statements for the year ended 30 June 2022.
There have been no significant changes in the risk management policies since
the year end.
Fair value estimation
Specific valuation techniques used to value financial instruments are defined
as:
i. Level 1 - Quoted market prices or dealer quotes in active markets
for similar instruments.
ii. Level 2 - The fair value of equity securities and interest rate
swaps is calculated as the present value of the estimated future cash flows
based on observable yield curves.
iii. Level 3 - Other techniques, such as discounted cash flow analysis,
are used to determine fair value for the remaining financial instruments.
The following table presents the Group's assets that are measured at fair
value:
31 December 2022 31 December 2021 30 June 2022 (audited)
Level 3 Total Level 3 Total Level 3 Total
£m £m £m £m £m £m
Assets
Other investments
- PPP and other investments 46.1 46.1 48.3 48.3 47.5 47.5
Total 46.1 46.1 48.3 48.3 47.5 47.5
There were no transfers between levels during the period. The valuation
techniques used to derive Level 2 and 3 fair values are consistent with those
set out in the 30 June 2022 financial statements. Level 3 fair values are
determined using valuation techniques that include inputs not based on
observable market data. For all other financial instruments, the fair value is
materially in line with the carrying value. The key assumptions used in Level
3 valuations include the expected timing of receipts, credit risk and discount
rates. The typical repayment period is 10-15 years and the timing of receipts
is based on historical data.
During the period, government gilts have increased, but the underlying assets
have remained low risk and insulated from short term changes to the macro
economic environment. The fair value of the portfolio reflects a blended
discount rate of 7.1% (31 December 2021: 7.0%; 30 June 2022: 7.0%) and is
based on current market conditions. The sensitivity to discount rates is set
out in note 12. If receipts were to occur earlier than expected, the fair
value could increase.
17 Guarantees and contingent liabilities
Galliford Try Holdings plc has entered into financial guarantees and counter
indemnities in respect of bank and performance bonds issued in the normal
course of business on behalf of Group undertakings, including joint
arrangements, amounting to £148.5m (31 December 2021: £131.9m; 30 June 2022
£127.1m). Disputes arise in the normal course of business, some of which lead
to litigation or arbitration procedures. The directors make proper provision
in the financial statements when they believe a liability exists. While the
outcome of disputes and arbitration is never certain, the directors believe
that the resolution of all existing actions will not have a material adverse
effect on the Group's financial position.
18 Related party transactions
Since the last Group annual financial statements for the year ended 30 June
2022, there have been no significant changes to the nature of related party
transactions.
19 Business combinations
During the six months to 31 December 2022, the Group acquired (i) 100% of the
share capital MCS Control Systems Limited and (ii) certain contracts and
assets of Ham Baker Limited (in administration). The Group has also finalised
the acquisition accounting of nmcn having previously reported the balances as
provisional in accordance IFRS 3.
(i) MCS Control Systems Limited
On 8 July 2022, the Group acquired 100% of the share capital of MCS Control
Systems Limited ("MCS"), a leading systems integrator to the industrial and
utilities sectors for consideration of £1 settled in cash. The addition of
MCS's capabilities is complementary to the operations of Galliford Try's
expanding Environment business. In particular, MCS provides additional
competencies that complement those acquired in October 2021 with nmcn's Water
business and Lintott Control Systems Limited and will accelerate the growth of
Galliford Try Environment's asset optimisation and capital maintenance
strategy.
The goodwill of £3.2m arising from the acquisition is significantly
attributable to the acquired workforce and their technical expertise and the
opportunity to leverage this expertise across the Group to enhance the asset
optimisation and capital maintenance strategy.
The following table summarises the consideration paid and the provisional fair
value of the assets acquired and liabilities assumed.
£m
Recognised amounts of identifiable assets acquired and liabilities assumed
Property plant and equipment 0.1
Intangible assets 0.2
Right-of-use assets 0.6
Trade and other receivables 3.2
Trade and other payables (5.9)
Bank and other borrowings (0.8)
Lease liabilities (0.6)
Total identifiable net liabilities (3.2)
Goodwill 3.2
Total -
Consideration
Cash -
Total -
The acquisition contributed £2.3m of turnover and £0.2m loss before tax and
amortisation in the period to 31 December 2022, which is similar to the
contribution it would have made if acquired at the start of the financial
year.
(ii) Ham Baker
On 18 November 2022, the Group acquired certain contracts and assets from Ham
Baker Limited (in administration) for £225,000 settled in cash. The Group has
acquired the asset inspection, maintenance and screens and distributor
operations. The acquired business produces a variety of engineered products
for the water industry, which the Group will use as a basis to develop a low
carbon engineering offering, enabling products and raw materials to be as
reused if possible, and reducing waste. The acquisition brings complementary
capabilities to the Group's growing Environment business and will give it a
further advantage in preparing for the water industry's AMP8 cycle, in
particular addressing storm overflow challenges. It also plays into Galliford
Try's role in decarbonising the industry for a greener, more sustainable
future.
Similar to the MCS Control Systems Limited acquisition, the goodwill of £0.6m
arising from the acquisition is significantly attributable to the acquired
workforce and their technical expertise and the opportunity to leverage this
expertise across the Group to enhance the asset optimisation and capital
maintenance strategy.
The following table summarises the consideration paid and the provisional fair
value of the assets acquired and liabilities assumed.
£m
Recognised amounts of identifiable assets acquired and liabilities assumed
Intangible assets 0.1
Trade and other receivables 0.3
Trade and other payables (0.8)
Total identifiable net liabilities (0.4)
Goodwill 0.6
Total 0.2
Consideration
Cash 0.2
Total 0.2
The acquisition contributed a loss before tax and amortisation of £0.4m in
the period to 31 December 2022.
The performance of the business preceding the acquisition was impacted by Ham
Baker Limited entering administration, and accordingly it is impracticable to
assess the contribution it would have made to the Group if acquired at the
start of reporting period.
(iii) nmcn
On 7 October 2021, the Group acquired the water business of nmcn plc (which
had been placed into administration) for £1.0m settled in cash.
This expanded the Group's geographical presence on key frameworks across the
UK, and its capabilities in the water sector, in line with the Group's
strategy. Full details are included in the Group's 30 June 2022 Annual Report.
The provisional balances at 31 December 2021 have been restated to reflect
those reported at 30 June 2022, resulting in an increase to goodwill from
£6.5m previously recorded at 31 December 2021 to £11.0m as reported at 30
June 2022. See note 21 for further details.
In accordance with IFRS 3, the Group has assessed the acquisition accounting
during the measurement period and has identified the need to reflect a final
adjustment to the reported acquisition note in the 30 June 2022 annual report.
The change reflects an increase to the onerous contract provisions and net
unfavourable contracts acquired by £0.8m with an offsetting increase in
goodwill by £0.8m. As this is not material, the adjustment has been recorded
in the six-month period to 31 December 2022.
20 Alternative performance measures
Throughout the Interim statement, the Group has presented financial
performance measures which are used to manage the Group's performance. These
financial performance measures are chosen to provide a balanced view of the
Group's operations and are considered useful to investors as they provide
relevant information on the Group's performance. They are also aligned to
measures used internally to assess business performance in the Group's
budgeting process and when determining compensation. An explanation of the
Group's financial performance measures and appropriate reconciliations to its
statutory measures are provided below.
Measuring the Group's performance
The following measures are referred to in this report:
Statutory measures
Statutory measures are derived from the Group's reported financial statements,
which are prepared in accordance with UK adopted International Accounting
Standards and in line with the Group's accounting policies. The Group's
statutory measures take into account all of the factors, including exceptional
items which do not reflect the ongoing underlying performance of the Group.
Alternative performance measures
In assessing its performance, the Group has adopted certain non-statutory
measures that more appropriately reflect the underlying performance of the
Group. These typically cannot be directly extracted from its financial
statements but are reconciled to statutory measures below:
a) Pre-exceptional performance
The Group adjusts for certain material items which the Board believes assist
in understanding the performance achieved by the Group as this better reflects
the underlying and ongoing performance of the business.
b) Pre-exceptional operating profit/(loss) before amortisation and operating
margin
The Group uses an operating profit measure excluding amortisation and
exceptional items.
Operating margin reflects the ratio of pre-exceptional operating profit before
amortisation and pre-exceptional revenue. This differs from the statutory
measure of profit before finance costs which includes the share of joint
ventures' interest and tax and amortisation of intangible assets. Divisional
operating margin represents the combined Building and Infrastructure operating
margins.
A reconciliation of the statutory measure to the Group's performance measure
is shown below, based on continuing operations:
Building Infrastructure PPP Investments Central Total
£m
£m
£m
£m
£m
Half year ended 31 December 2022
Statutory operating profit/(loss) 8.8 6.0 1.5 (11.5) 4.8
Exclude: amortisation of intangible assets 0.5 0.5 - 0.5 1.5
Exclude: exceptional items (note 6) - - - 4.5 4.5
Pre-exceptional operating profit/(loss) before amortisation 9.3 6.5 1.5 (6.5) 10.8
Revenue 399.7 276.6 2.9 - 679.2
Operating margin 2.3% 2.3% n/a n/a 1.6%
Half year ended 31 December 2021
Statutory operating profit/(loss) 7.9 (2.2) (0.5) (9.2) (4.0)
Exclude: amortisation of intangible assets 0.5 0.2 - 0.5 1.2
Exclude: exceptional items (note 6) - 6.3 - 3.4 9.7
Pre-exceptional operating profit/(loss) before amortisation 8.4 4.3 (0.5) (5.3) 6.9
Revenue 386.2 204.4 3.4 - 594.0
Operating margin 2.2% 2.1% n/a n/a 1.2%
Year ended 30 June 2022 (audited)
Statutory operating profit/(loss) 17.9 2.4 (0.9) (17.3) 2.1
Exclude: amortisation of intangible assets 1.0 0.7 - 1.0 2.7
Exclude: exceptional items (note 6) - 7.7 - 6.0 13.7
Pre-exceptional operating profit/(loss) before amortisation 18.9 10.8 (0.9) (10.3) 18.5
Revenue 789.1 441.9 6.2 - 1,237.2
Operating margin 2.4% 2.4% n/a n/a 1.5%
c) Pre-exceptional profit before tax
The Group uses a profit before tax measure which excludes exceptional items as
noted above, whereas the statutory measure includes exceptional items.
A reconciliation of the statutory measure to the Group's performance measure
is shown below, based on continuing operations:
Half year to 31 December 2022 Half year to 31 December 2021 Year to 30 June 2022 (audited)
£m £m £m
Statutory (loss)/profit before tax 7.2 (2.6) 5.4
Exclude: exceptional items (note 6) 4.5 9.7 13.7
Pre-exceptional profit before tax 11.7 7.1 19.1
d) Pre-exceptional earnings per share
In line with the Group's measurement of pre-exceptional performance, the Group
also presents its earnings per share on a pre-exceptional basis. This differs
from the statutory measure of earnings per share which includes exceptional
items.
A reconciliation of the statutory measure to the Group's performance measure
is shown below, based on continuing operations:
Half year to 31 December 2022
Earnings Ave number of shares EPS
£m
pence
Statutory results 5.9 107,218,581 5.5
Exclude: exceptional loss (note 6) 3.5 n/a n/a
Pre-exceptional earnings per share 9.4 107,218,581 8.8
Half year to 31 December 2021
Earnings Ave number of shares EPS
£m
pence
Statutory results (1.3) 109,654,473 (1.2)
Exclude: exceptional earnings (note 6) 7.8 n/a n/a
Pre-exceptional earnings per share 6.5 109,654,473 5.9
Year ended 30 June 2022 (audited)
Earnings Ave number of shares EPS
£m
pence
Statutory results 6.3 109,016,667 5.8
Exclude: exceptional earnings (note 6) 11.1 n/a n/a
Pre-exceptional earnings per share 17.4 109,016,667 16.0
21 Prior period adjustments
Consistent with the adjustments made in the 30 June 2022 Annual Report, the
Group has restated certain balance sheet items at 31 December 2021.
i) The balance sheet at 31 December 2021 has been restated
due to the incorrect presentation of trade receivables, contract assets and
contract liabilities in relation to one combined contract. At 31 December
2021, no trade receivable should have been recognised as there was not an
unconditional right to payment, the amount should have instead been recognised
as a contract asset. Additionally, the contract position across different
performance obligations within the combined contract should have been
presented as one net balance whereas it was previously presented on a gross
basis.
ii) The provisions and accruals balance has been restated,
reflecting a reclassification between the two line items. Onerous contract and
rectification provisions were previously reported within accruals but should
have been presented as provisions.
iii) Other receivables and current income tax assets have
been restated reflecting a reclassification of research and development
expenditure credits from current income tax assets to other receivables.
To correct the presentation of these balances in the prior period, the Group
has restated the balance sheet and associated note disclosures as at 31
December 2021 and statement of cash flows for the year then ended as outlined
below. There is no overall effect of the restatements on net assets at 31
December 2021 nor profit for the period then ending.
In addition, and as required by IFRS 3, the acquisition accounting in respect
of the group's acquisition of nmcn was finalised during the measurement
period. As a result, the fair values of assets and liabilities acquired, and
goodwill, at 31 December 2021 were restated to reflect the final fair values -
see note 19(iii) for more details. These adjustments are shown in column (iv)
in the tables that follow:
Balance Sheet
31 December 2021
Originally reported Adjustment i) Adjustment ii) Adjustment iii) Adjustment iv)
£m
Restated
£m
Assets
Non-current assets
Intangible assets 10.3 - - - - 10.3
Goodwill 83.7 - - - 4.5 88.2
Property, plant and equipment 3.6 - - - - 3.6
Right-of-use assets 21.9 - - - - 21.9
Investments in joint ventures 0.2 - - - - 0.2
PPP and other investments 48.3 - - - - 48.3
Deferred income tax assets 14.1 - - - - 14.1
Total non-current assets 182.1 - - - 4.5 186.6
Current assets
Trade and other receivables 235.1 (7.4) - 2.3 (2.5) 227.5
Current income tax assets 8.0 - - (2.3) - 5.7
Cash and cash equivalents 211.1 - - - - 211.1
Total current assets 454.2 (7.4) - - (2.5) 444.3
Total assets 636.3 (7.4) - - 2.0 630.9
Liabilities
Current liabilities
Trade and other payables (487.2) 7.4 36.5 - (1.3) (444.6)
Lease liabilities (8.5) - - - - (8.5)
Provisions for other liabilities and charges - - (36.5) - (0.7) (37.2)
Total current liabilities (495.7) 7.4 - - (2.0) (490.3)
Non-current liabilities
Lease liabilities (13.4) - - - - (13.4)
Total non-current liabilities (13.4) - - - - (13.4)
Total liabilities (509.1) 7.4 - - (2.0) (503.7)
Net assets 127.2 - - - - 127.2
Equity
Ordinary shares 55.5 - - - - 55.5
Other reserves 118.4 - - - - 118.4
Retained earnings (46.7) - - - - (46.7)
Total equity attributable to owners of the Company 127.2 - - - - 127.2
Statements of cash flows
As a result of the restatements to the balance sheet, the following working
capital movements have also been restated. The impact of the change in
presentation of research and development expenditure tax credits has resulted
in a change to the income tax cash flow, being a payment of £0.2m (previously
a receipt of £2.0m).
31 December 2021
2021 Adjustment i) Adjustment ii) Adjustment iii) Adjustment iv) 2021
originally reported restated
£m
£m
Net cash generated from operations before changes in working capital 4.5 4.5
- - - -
(Increase)/decrease in trade and other receivables 14.7 1.0 - 2.2 - 17.9
Increase/(decrease) in trade and other payables (20.1) (1.0) 1.5 - - (19.6)
(Decrease)/increase in provisions - - (1.5) - - (1.5)
Net cash generated from operations (0.9) - - 2.2 - 1.3
Trade and other receivables
31 December 2021
2021 Adjustment i) Adjustment ii) Adjustment iii) Adjustment iv) 2021
originally reported restated
£m
£m
Trade receivables 56.2 (2.3) - - - 53.9
Less: provision for impairment of receivables (0.1) - - - - (0.1)
Trade receivables - net 56.1 (2.3) - - - 53.8
Contract assets 153.5 (5.1) - - (2.5) 145.9
Amounts due from joint ventures 2.2 - - - - 2.2
Research and development expenditure credits - 2.3 2.3
Prepayments and other receivables 23.3 - - - - 23.3
235.1 (7.4) - 2.3 (2.5) 227.5
Trade and other payables
31 December 2021
2021 Adjustment i) Adjustment ii) Adjustment iii) Adjustment iv) 2021
originally reported restated
£m
£m
Trade payables 73.4 - - - - 73.4
Contract liabilities 133.4 (7.4) - - 1.3 127.3
Other taxation and social security payable 34.7 - - - - 34.7
Accruals and other payables 245.7 - (36.5) - - 209.2
487.2 (7.4) (36.5) - 1.3 444.6
The impact on provisions for other liabilities and charges is stated in note
15.
Forward looking statements
Certain statements in this half year report are forward looking. Such
statements should be treated with caution as they are based on current
information and expectations and are subject to a number of risks and
uncertainties that could cause actual events of outcomes to differ materially
from expectations.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
The condensed set of financial statements has been prepared in accordance with
International Accounting Standard 34, 'Interim Financial Reporting' as adopted
by the UK.
The directors confirm that these condensed consolidated half year financial
statements have been prepared in accordance with IAS 34 as adopted by the UK;
and that the interim management report herein gives a true and fair view of
the assets, liabilities, financial position and profit of the Group as
required by DTR 4.2.4 and includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8 namely:
· an indication of important events that have occurred during the
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
· material related party transactions in the first six months and
any material changes in the related party transactions described in the last
annual report.
The directors of Galliford Try Holdings plc are:
Alison Wood Non-executive Chair
Bill Hocking Chief Executive
Andrew Duxbury Finance Director
Terry Miller Senior Independent
Director
Gavin Slark Non-executive Director
Marisa Cassoni Non-executive Director
Sally Boyle Non-executive
Director
( )
Peter Ventress resigned as a Non-executive Director on 21 September 2022.
Signed on behalf of the Board.
Bill Hocking
Chief Executive
Andrew Duxbury
Finance Director
8 March 2023
Independent review report to Galliford Try Holdings plc
Report on the condensed consolidated interim financial statements
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 December 2022 is not prepared, in
all material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2022 which comprises the condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated statement of changes in
equity and the condensed consolidated statement of cash flows.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the group to
cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the 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 company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
8 March 2023
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
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