Galliford Try - Building on Solid Foundations (GFRD)

Interim results out on Thursday.

I'm not going to go into this one in-depth as I've knocked it up quickly, will add to it later, info such as social housing booming due to government directives, etc (all of which can be read about in KBC Broker note)...

Put simply:

2003 EPS = 4.2p
2004 EPS = 6.8p (estimated)
2005 EPS = 7.4p (conservative estimate)

If you've read my thread on ROK Property Solutions ROK thread, you'll know all about the business that Galliford Try are in, except they have the useful addition of a booming housebuilding division. They've also had a recent restructuring in their high turnover construction services business and are now growing margins from a low level and this division is expected to break into profit this year.

ROK reported one month ago and has received numerous upgrades from brokers which has helped to propel the stock to new highs. I've bought into GFRD at 53p in anticipation of the same. (No investment advice intended, DYOR)

Broker recs:

KBC Broker NoteM

Momentum remains positive with a resilient private housing
market and the turnaround in Construction underpinned by reinvigorated
divisional management and a strong position in social
housing – both new build and refurbishment

Were Construction margins to
remain depressed, the current rating of 7x to June 2005 would be
in line with the comparables. However we see a doubling of
Construction margins, adding 15% to 2006 profits underlying
growth.

We also see scope to upgrade following the imminent full year
results announcement. Additionally, we consider
the housebuilders to be 15% too cheaply rated and so our longer
term target is 70p.

LONDON, September 3 (New Ratings) - Analysts at Arbuthnot issue a "buy" rating on Galliford Try (GFRD.ISE).

In a research note published this morning, the analysts mention that the company has not derived any benefit from the recent housebuilder price hike. The analysts expect Galliford Try’s interim results, scheduled to be reported on for September 9, to be encouraging. The takeover bid from Galliford Try’s rival, Rok Property Trust, has not materialized and is unlikely to resurface, the analysts add.



laf ;-)