REG - Galliford Try Hldgs - Trading Statement

Galliford Try HoldingsAnnouncement

11/07/2023 07:00

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RNS Number : 5647F  Galliford Try Holdings PLC  11 July 2023

 

 

 

GALLIFORD TRY HOLDINGS PLC TRADING UPDATE

TUESDAY 11 JULY 2023

 

STRONG PERFORMANCE AND CONFIDENT OUTLOOK

 

Galliford Try Holdings plc, the UK construction group, today provides an
update on trading for the year ended 30 June 2023.  The Group expects to
announce its results for the full year on 20 September 2023.

 

Highlights

 

·    Good progress in the year against our strategic targets, including
the successful integration of two acquisitions.

·    Full year pre-exceptional profit before tax expected to be at the
upper end of current analyst forecasts(1).

·    Strong performance across all operations with increased revenue and
profit before tax.

·    Special dividend to shareholders of 12p per share following
resolution of a long running dispute, to be paid in October 2023.

·    Balance sheet strength, with circa £220m of cash at 30 June 2023
(2022: £219m) and average month-end cash during the financial year of circa
£135m (2022: £174m).

·    Achieved UN-backed Science Based Target validation of our near-term
target to reduce carbon emissions.

·    Strong outlook, with a high-quality order book of £3.7bn (2022:
£3.4bn) including recent major framework wins.  92% of revenue for the new
financial year secured (2022: 90%).

 

(1) The range of analysts' forecasts for pre-exceptional profit before tax for
the year ended 30 June 2023 is £22.1m to £23.3m based on forecasts at 1 July
2023. This is stated excluding the c£3m contract settlement write-off
previously announced and exceptional costs related to our investment in
cloud-based computer software (as previously disclosed).

 

Current Trading

 

The Group continues to make good operational progress in line with our
Sustainable Growth Strategy. This performance has been achieved against a
backdrop of macroeconomic challenges, including delays in signing new
contracts during calendar year 2022, which are now easing.

 

We have successfully integrated our acquisitions of nmcn's water businesses,
in October 2021, and more recently MCS Control Systems and Ham Baker and we
are starting to see the positive impact of these specialist teams in our
Environment business and across significant AMP 8 opportunities.

 

We were pleased to report the resolution of a long running, complex and
challenging multi-contract dispute, which resulted in settlement via a cash
payment to the Group of £26m, generating an initial cash distribution by way
of special dividend to shareholders in October 2023.

 

We continue to maintain close engagement with our supply chain and clients,
successfully managing and mitigating the risks of material shortages and
inflation, which are now subsiding.  The UN-backed Science Based Targets
initiative (SBTi) recently validated our near-term target to reduce carbon
emissions and have confirmed that our scope 1 and 2 target is aligned with
limiting global warming to 1.5°C, the most ambitious designation available
through the SBTi process.

 

As a result of the strong performance in the financial year-to-date, the Group
expects to report full year pre-exceptional profit before tax at the upper end
of current analyst forecasts(1).

 

Balance Sheet

 

The year-end cash at 30 June 2023 was circa £220m and, in addition, the Group
has a portfolio of PPP assets, no pensions liabilities and no debt or
associated covenants.  Average month-end cash for the year ended 30 June 2023
was circa £135m (year to 30 June 2022: £174m), in line with the Board's
expectations given the recent acquisitions, previous delays in starting new
contracts in 2022, our ongoing investment in cloud-based digital systems as
previously disclosed, and circa £20m of dividends and other capital returns
in the year.  As at 7 July 2023 the Group has purchased a total of 6,437,148
shares, for an aggregate consideration of £11.1m.

 

During the year, and supported by our strong balance sheet, the Group has been
successful in winning a number of high quality contracts as well as
participation in key sector frameworks. The Group's strong balance sheet is
considered to be a real differentiator for our clients and suppliers.

 

Order Book and Outlook

 

The Group's operations are predominantly in the public and regulated sectors
and we are well placed to deliver on local and national commitments to improve
the UK's economic and social infrastructure.

 

Our strategy is founded on a disciplined approach to bidding and overall risk
management.

 

In addition to project and framework wins we continue to see a strong pipeline
of new opportunities across our chosen sectors.  Since January 2023 we have
been successful in winning a number of key projects and participation on major
frameworks including:

 

-       the £5.1bn Defence Estate Optimisation Portfolio.

-       the £4.5bn Southern Construction Framework.

-       the £2.5bn Ministry of Justice Constructor Services Framework.

-       the £600m Southern Water AMP8 Framework.

-       the £140m Carlisle Southern Link Road.

the £81m Melton Mowbray distributor road.

-       the £75m Brent Cross Residential Project.

 

The delays to new contract awards seen during 2022 have now eased,
contributing to a very strong orderbook at 30 June 2023 and increased level of
revenue secured for the new financial year.

 

 

Bill Hocking, Chief Executive, commented:

 

"The Group expects to report another year of strong performance across all its
operations with increased revenue and profit before tax and we continue to
progress our Sustainable Growth Strategy, supporting our financial targets to
2026.

 

An important differentiator for our clients and suppliers is the Group's
ability to maintain its balance sheet strength and continue our success in
maintaining a high-quality order book in our chosen public and regulated
sectors.

 

The Group prides itself on a progressive culture that invests in and supports
its staff and I am grateful to all our people for their professionalism and
work ethic which delivered the performance of the Group during the year.

 

During the year we resolved a major dispute enabling a significant initial
cash distribution, by way of special dividend, to our shareholders.

 

We are excited about new financial year and the opportunity to deliver further
strong future performance and long-term sustainable value for all
stakeholders."

 

 

A conference call for Analysts and Investors will be held at 09:00am BST
today, Tuesday 11 July 2023:

 

Dial-in: +44 800 358 1035 (Toll Free) or +44 20 3936 2999

 

Access code: 023565

 

 

For further enquiries please contact:

 

 Galliford Try  Bill Hocking, Chief Executive      01895 855001

                Andrew Duxbury, Finance Director

 Teneo          James Macey White                  020 7353 4200

 

 

 

Note to Editors

 

Galliford Try is a leading UK construction group listed on the London Stock
Exchange.  Operating as Galliford Try and Morrison Construction, the Group
carries out building and infrastructure projects with clients in the public,
private and regulated sectors across the UK.

 

 

 

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