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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Galliford Try Holdings Plc | LSE:GFRD | London | Ordinary Share | GB00BKY40Q38 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.00 | -0.82% | 242.00 | 240.00 | 243.00 | 245.00 | 239.00 | 243.00 | 575,564 | 15:44:53 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contr-single-family Home | 1.39B | 9.1M | 0.0886 | 27.31 | 248.45M |
From Apr 2019 to Apr 2024
TIDMGFRD
RNS Number : 7186J
Galliford Try PLC
14 September 2016
07:00 AM WEDNESDAY 14 SEPTEMBER 2016
GALLIFORD TRY PLC
ANNUAL RESULTS STATEMENT FOR THE YEARED 30 JUNE 2016
DELIVERING RESULTS THROUGH OUR DISCIPLINED GROWTH STRATEGY
Highlights
Hot Features
Premium
Financial 2016 2015 Change
* Revenue(1) (including joint ventures) GBP2,670m GBP2,431m +10%
* Group revenue(1) GBP2,495m GBP2,348m +6%
* Profit before tax GBP135.0m GBP114.0m +18%
* Earnings per share 132.5p 112.8p +17%
* Dividend per share 82.0p 68.0p +21%
GBP8.7m GBP17.3m -GBP8.6m
* Net debt
* Group return on net assets(2) 25.3% 23.3% +2.0 pts
* Profit before tax, pre-exceptional(3) GBP135.0m GBP117.7m +15%
* Earnings per share, pre-exceptional(3) 132.5p 116.3p +14%
Group
-- Record profit following another strong year with growth across the Group -- 21% increase in full year dividend payment to 82 pence -- Minimal net debt of GBP8.7 million at 30 June 2016 (2015: GBP17.3 million) -- Return on net assets improved to 25.3% from 23.3%
-- Management reorganised to continue to improve operational excellence in all three businesses
Linden Homes
-- 3,078 completions(4) (2015: 2,769) producing an 8% increase in revenue to GBP841 million (2015: GBP779 million)
-- Significant margin increase to 17.5% (2015: 16.0%)
-- Sales per outlet up 2% on last year, with 19% growth in sales reserved, contracted or completed to GBP510 million (2015: GBP427 million)
-- Linden Homes landbank of 11,700 plots(5) (2015: 13,550 plots) with a 14,500 total Group landbank (2015: 15,750)
-- 100% of land required for 2017 financial year in place and 85% of land secured for 2018 -- Restructuring implemented generating annualised savings of over GBP5 million from FY 2017
Partnerships and Regeneration
-- Growth in mixed-tenure revenue to GBP67 million from 526 completions(4) (2015: GBP56 million and 408 respectively)
-- Contracting revenue lower at GBP234 million (2015: GBP273 million), slightly constrained by procurement delays following the Government's rent reforms
-- Margin improving to 3.9% (2015: 2.9%) -- Growth in landbank to 2,800 (2015: 2,200) plots
-- New Bristol office opened in July 2016 and a new Central Southern office planned for the current year
-- Contracting order book of GBP865 million (2015: GBP850 million) and mixed-tenure sales reserved, contracted or completed of GBP73 million
-- Partnerships and Regeneration teams merged to enhance strategic and operational focus
Construction
-- Construction margin of 1.1% from revenue of GBP1,503 million (2015: 1.2% and GBP1,293 million respectively)
-- Order book of GBP3.5 billion (2015: GBP3.8 billion) -- 85% of this year's planned revenue secured (2015: 90%) -- Cash continues to be strong at GBP161 million (2015: GBP173 million)
Peter Truscott, Chief Executive, commented:
"I am delighted to announce excellent results for the year. We have achieved further progress on margins in Linden Homes, increased our mixed-tenure output in Partnerships and Regeneration, and continue to make progress in resolving older contracts in Construction, whilst building and delivering a reliable and high quality order book. We have reorganised management in all three businesses during the year, creating the right platform for future progress in both volume and margin. Reflecting the delivery of record results and our continuing confidence in the business, we are proposing an increase in our full year dividend of 21%.
The decision to leave the European Union inevitably creates a backdrop of uncertainty for the new financial year. However, we have been encouraged by visitor levels and sales rates at Linden Homes through the summer. The balance of our businesses and the strength of our order books mean that we are well-placed to manage the impact of this uncertainty."
This announcement contains inside information.
Enquiries:
Galliford Try plc Peter Truscott, Chief Executive 01895 855001
Graham Prothero, Finance Director 01895 855001
Tulchan Communications James Macey White / Martin Pengelley 020 7353 4200
(1) 'Revenue' includes share of joint ventures' revenue of GBP175.5 million (2015: GBP82.3 million). 'Group revenue' where stated excludes share of joint ventures.
(2) Group return on net assets represents profit before tax, exceptional items, finance costs and amortisation compared to average net assets.
(3) Exceptional costs in 2015 of GBP3.7 million related to the integration of Miller Construction. There were no exceptional costs in 2016.
(4) Completions net of joint venture partner share were 2,691 (2015: 2,566) for Linden Homes and 394 (2015: 308) for Partnerships and Regeneration.
(5) Linden Homes landbank includes 2,311 plots (2015: 1,967) held in joint ventures.
Galliford Try will hold its results presentation at 09:30 am on Wednesday 14 September 2016 at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS. A live audio webcast will be available at http://www.investis-live.com/galliford-try/57bd9fe674443c0b0037a664/9f523. Recorded interviews with Peter Truscott and Graham Prothero, regarding the full year results will be available on the Group's website: www.gallifordtry.co.uk from Wednesday 14 September 2016.
CURRENT TRADING AND OUTLOOK
The result of the EU referendum inevitably created a backdrop of uncertainty for the new financial year and we are monitoring market conditions and consumer confidence closely.
Although there is insufficient data to predict specific effects on our markets, customer interest in Linden Homes remains solid. After a short-term decline in visitor numbers and small increase in cancellation rates, broadly in line with normal seasonal patterns, we are encouraged to see a return to growth in sales rates and prices since the referendum. More broadly, the strength of underlying demand for new homes, the continuing availability of mortgage finance at low rates of interest, and the stimulus of Help-to-Buy give grounds for confidence in both Linden Homes and Partnerships.
We continue to pursue opportunities to acquire prime sites in good locations at attractive hurdle rates, while remaining disciplined in our expansion. In light of the current economic uncertainty, we are taking a more cautious approach to land acquisition, a stance we adopted in the period ahead of the referendum. We continue to maintain a strong landbank which supports 100% of our plans for the next financial year and 85% of our plans for 2018.
In Partnerships and Regeneration, affordable housing remains high on the political agenda with renewed emphasis on home ownership. Despite the challenges of welfare reform, the recent Government rent reforms and market uncertainty following the EU referendum, housing associations remain financially robust and are continuing to leverage their balance sheets to support mixed-tenure developments. Building on our experience and relationships with public sector commissioners, the prospects for our Partnerships business are considered to be excellent, with significant unmet demand for low-cost, intermediate and rented affordable homes. Further geographic expansion and increase in mixed-tenure revenues will drive growth in both the top line and margins.
The construction market remains positive, helped by the substantial infrastructure maintenance and improvement required in the UK. The late-cycle nature and public sector focus of our Construction business are key advantages for the Group, with the order book already 85% secured for the current financial year. The pipeline of opportunities in both Building and Infrastructure remains encouraging, although the speed of some work coming through the public sector remains slower than expected. Whilst there has undoubtedly been a cooling in demand for new private commercial buildings in the period leading up to and since the EU referendum, our focus on the public and regulated sectors, which represent 90% of our order book, give us a strong and reliable outlook. We will remain disciplined in our approach to securing work: whilst it is desirable to maintain a certain scale of operations, we will always prioritise quality of the order book over quantity.
Overall, the outlook remains positive for all three of our businesses. Strong demand in housebuilding, stable construction markets, an aggregate order book of GBP4.9 billion, and our balance sheet position give the Board continued confidence in the Group's prospects.
STRATEGY
The strategy we outlined in February 2014, which set out detailed Group and divisional targets to 2018, has provided an excellent plan for sustainable growth and we have delivered a strong performance each year, creating a platform for continuing sustainable and disciplined growth. Further detail around our longer-term strategy and objectives will be communicated at our capital markets day in February 2017.
DIVID
The directors are proposing a final dividend of 56 pence per share, an increase of 22%. Together with the interim dividend of 26 pence per share paid in April, this will result in a total dividend for 2016 of 82 pence per share, an increase of 21% over 2015. The total dividend is 1.6 times covered by earnings, in line with our guidance. Subject to shareholder approval at the AGM, the dividend will be paid on 23 November 2016 to shareholders on the register at 28 October 2016.
For 2017 we retain our target of 1.6 times cover. As part of our current review of strategy, and specifically considering our disciplined growth plans for Linden Homes and Partnerships and Regeneration, we are proposing to build cover, beginning in 2018, aiming in each year at least to maintain the absolute payment (subject as always to market conditions and profit performance).
FINANCIAL REVIEW
Galliford Try enjoyed another year of strong progress, delivering record profit before tax and earnings per share, and a further increase in return on net assets, whilst making significant strides against our strategic targets for 2018.
Revenue including our share of joint ventures rose 10% to GBP2,670 million (2015: GBP2,431 million). Group revenue, excluding joint ventures, was 6% higher at GBP2,495 million (2015: GBP2,348 million).
Profit from operations, which is stated before finance costs, exceptional items, tax and our share of joint ventures' interest and tax, rose 13% to GBP157.5 million (2015: GBP138.9 million). This resulted in profit before tax of GBP135.0 million, up 15% from GBP117.7 million (pre-exceptional) in 2015, principally reflecting revenue growth and improving margins in Linden Homes and Partnerships.
Earnings per share increased by 14% to 132.5 pence (2015: 116.3 pence pre-exceptional), with post-exceptional earnings per share up 17%.
Average net debt during the year was GBP204 million and year end net debt was GBP8.7 million, both of which were in line with our plans as we continue to invest in the growth of Linden Homes and Partnerships. We enjoy strong support from our syndicate banks, and during the year we agreed an increase in our bank facility by GBP50 million to GBP450 million, on the same terms, in particular to create comfortable headroom for the faster expansion of Partnerships and Regeneration.
We continue to purchase land on deferred payment terms where possible, in order to optimise our return on capital employed. As explained in note 1 of the financial information, we have reviewed our policy on land creditors to bring this into line with our sector peer companies. Under the new policy, land creditors declined to GBP202.8 million (2015: GBP224.8 million as restated, compared with GBP390.9 million on the previous basis).
Group return on net assets, which is profit before tax, finance costs and amortisation, divided by average net assets, increased to 25.3% from 23.3%, reflecting profit growth across the Group. This year we have enhanced our disclosure by providing a segmental split of our balance sheet, as shown in note 2 in the financial statements, enabling us to refine our estimation of divisional return on net assets.
OPERATIONAL REVIEW
LINDEN HOMES
2016 2015
Revenue (GBPm) 840.8 779.0
Profit from operations
(GBPm) 147.2 124.3
Operating profit
margin (%) 17.5 16.0
Completions 3,078 2,769
Linden Homes benefited from a robust housing market throughout the year, underpinned by supply shortages, an ample availability of low-cost mortgages, and a land market that remained positive. Underlying demand is strong and mortgage availability and affordability remains positive. We increased our revenue and margins, benefitting from a rigorous drive in efficiency, and maintained our landbank at an appropriate level, given our expansion plans and a good supply of new opportunities in all regions. We have restructured and strengthened senior management, and achieved significant overhead savings through process rationalisation.
Linden Homes revenue increased by GBP61.8 million to GBP840.8 million, with completions of 3,078 compared with 2,769 in 2015. Excluding our joint venture partners' share, completions were 2,691 against 2,566 in 2015. Private housing completions accounted for 2,487 of the total (2015: 2,059). The average selling price of these units rose by 2% to GBP335,000.
Average sales rates in the second half were strong, at 0.68 units per site per week from an increased average number of outlets of 84; for the full year we achieved 0.62 sales per site per week from an average of 80 outlets (2015: 0.61 sales pspw from 62 outlets).
Linden Homes achieved a gross margin of 23.8%, compared with 22.5% in 2015.
Profit from operations increased by 18% to GBP147.2 million (2015: GBP124.3 million). The operating margin rose significantly from 16.0% in 2015 to 17.5%. Following an operating margin in the first half of the year of 17.0%, the margin achieved in the second half of the year was 17.9%. Excluding land sales (which mainly represented transfers into strategic joint ventures), the operating margin for the year was 16.2% (2015: 14.7%). Return on net assets calculated under our updated segmental disclosure was 31.7%, compared with 27.9% in 2015, reflecting continued strong working capital management.
Linden Homes' landbank is 11,700 plots. Including 2,800 plots in Partnerships and Regeneration, our total housebuilding landbank is 14,500 plots (2015: 15,750 plots). The figure represents the number of plots we own and control, including sites under option but excluding longer-term strategic options.
We continued to roll out the Linden Homes Layouts, which provide templates for the interiors of our homes and allow us to benefit from a more standardised procurement and construction process. A significant focus on rationalising our operating processes will generate annualised savings of over GBP5 million in FY 2017, while retaining capacity to grow unit numbers.
We opened a second business in Yorkshire in July 2016, building on our successful acquisition of Shepherd Homes in 2015.
Given the potential for margin enhancement we have increased our focus in strategic land.
In August we restructured the senior leadership of the business, creating two divisions led by Tom Nicholson (Divisional Chairman East) and Andrew Hammond (Divisional Chairman West). Peter Truscott will chair the board of Linden Homes, and Tom and Andrew have both joined the Group Executive Board.
PARTNERSHIPS AND REGENERATION
2016 2015
Revenue (GBPm) 300.6 329.4
Profit from operations
(GBPm) 11.7 9.4
Operating profit
margin (%) 3.9 2.9
Completions 526 408
Order book (GBPm) 865 850
Partnerships and Regeneration delivered strong growth in mixed-tenure revenues and margin increases.
There was some disruption to our registered provider clients' procurement activities in the first half of the year due to the Government's rent reforms, resulting in a small reduction in revenue from GBP329.4 million in 2015 to GBP300.6 million in 2016. Of this, GBP66.7 million came from mixed-tenure developments (up 19%) and GBP233.9 million from contracting (down 14%). We continue to be encouraged by our strong position in favourable markets in which we secured a number of major project wins.
The business continued its successful relationship with the ExtraCare Charitable Trust and was contracted to build a GBP45 million ExtraCare village in High Wycombe, and the GBP42 million Stoke Gifford Retirement Village. Partnerships was one of six contractors appointed to North Yorkshire County Council's Extra Care Housing Programme Framework, which has an anticipated value of up to GBP650 million over six years, and was also selected for five of the eight lots available under the Hyde Housing Group Main Contractor Framework Agreement. The framework is anticipated to be worth up to GBP1 billion.
Partnerships and Regeneration contributed profit from operations of GBP11.7 million, up from GBP9.4 million in 2015. This represented a blended operating margin of 3.9% (2015: 2.9%).
Net debt in the business stood at GBP12.1 million at 30 June 2016 (2015: GBP15 million cash), with the movement reflecting our investment of cash to fund mixed-tenure developments.
The contracting order book is GBP865 million (2015: GBP850 million). The business has GBP73 million of unit sales in hand.
We are setting ambitious growth plans for the business. Building on our experience and relationships with public sector commissioners, we will use our skills in housebuilding and place-making to deliver an increase in the number of new homes we provide. Geographical expansion is a key part of our growth strategy. We opened our new office in Bristol in July, giving us six offices across England and South Wales, and plan to open a new Central Southern office this year and further offices over the coming years.
In recognition of the size of the opportunity we perceive for this business, we have strengthened the strategic leadership with the appointment of Stephen Teagle as Chief Executive, Partnerships and Regeneration. Stuart Gibbons continues to lead the operating businesses and to deliver the planned organic growth. We have brought our Affordable Housing & Regeneration teams into a combined business, in order to build upon their respective and complementary knowledge and expertise. This will allow us to strengthen our strategic offering and leadership in this area whilst providing greater clarity to clients and external investors.
CONSTRUCTION
Construction 2016 2015 Revenue (GBPm) 1,503.4 1,293.2 Profit from operations (GBPm) 15.8 15.7 Operating profit margin (%) 1.1 1.2 Order book (GBPbn) 3.5 3.8
During the year, the UK construction market continued to generate an improving pipeline of projects at appropriate margins, supported by the substantial infrastructure renewal required in the UK. Build cost increases moderated, and the availability of skilled labour improved across all regions. The Government's pipeline of economic and social infrastructure work was positive, covering all the key sectors in which we operate, including the public and regulated sectors where over 90% of our order book is focused. We were pleased with a number of significant framework appointments and contract wins, although the speed of work coming through in the public sector remains overall slower than expected. We continue to follow our strategy of being selective about the work we bid for in order to protect our margins and maintain our focus on cash.
Revenue increased by 16% to GBP1,503.4 million (2015: GBP1,293.2 million) benefitting from new contract wins.
Construction achieved a margin of 1.1% compared with 1.2% in 2015. Margins continued to be constrained, in particular in Building, by contracts won in the more difficult economic climate. Due to the finalisation of these contracts and the settlement of their final accounts, these contracts are unlikely to achieve the levels of margin at which we are now winning work and will consequently hold back the reported figure in 2017.
Construction's result included the sale of our site accommodation portfolio to a third party equipment hirer, achieving a profit of GBP5.2 million on the disposal, and securing competitive rates going forward.
We continued to manage our cash carefully and had a cash balance in Construction of GBP161 million at the year-end (2015: GBP173 million) representing 11% of revenue.
Our order book is GBP3.5 billion (2015: GBP3.8 billion). Of the total order book, 74% is in the public sector (2015: 72%), 16% is in regulated industries (2015: 16%) and 10% is in the private sector (2015: 12%).
Importantly, 74% of our order book is in frameworks (2015: 69%), which is an unprecedented position for us. The level of work we generate through frameworks is a significant advantage, as they allow us to work collaboratively with clients, gain a deep understanding of their needs and build up expertise through delivering follow-on projects.
From 1 August 2016, as planned, Bill Hocking became Chief Executive of Construction.
Building
2016 2015
Revenue (GBPm) 1,013.8 906.9
Profit from operations
(GBPm) 9.0 8.0
Operating profit
margin (%) 0.9 0.9
Order book (GBPm) 2,340 2,570
During the year, Building secured a number of key projects and continued to implement its framework strategy. It won a place on the Ministry of Defence's South West and South East Next Generation Estate Contracts regional frameworks, which are worth up to GBP1 billion in total over four years. Building was also appointed to the YORbuild2 framework, which has a potential pipeline of approximately GBP1.9 billion over four years.
Education frameworks continue to provide a healthy pipeline of work and Building is now a key contractor to the Education Funding Agency (EFA), reaching financial close with the EFA for the GBP48.5 million North and North East Lincolnshire batch of schools and the GBP41.9 million Greenwich, Lewisham and Croydon batch. Other notable wins in the education sector included a contract with Birmingham City University to build the GBP46 million Conservatoire, a GBP62 million contract with Newcastle University to construct the Park View Student Village and a GBP40 million contract to provide student accommodation at Coventry University. The business also secured a place on the four-year GBP4.0 billion ProCure 22 framework for the Department of Health. The Scottish Hub operations are also busy in education and in healthcare, including the award of the GBP55 million Anderson High School in the Shetland Islands, the GBP43.3 million construction of the new Largs education campus for North Ayrshire Council and the GBP72 million East Lothian Community Hospital.
In the Commercial building sector, Building won a GBP66 million contract to construct the 2 Arena Central building in Birmingham, which will include 210,000 sq ft of office space. Building was also awarded a GBP40 million contract to construct 185,000 sq ft of office space in the Forbury Place development in Reading.
Building delivered profit from operations of GBP9.0 million (2015: GBP8.0 million), with a margin of 0.9% (2015: 0.9%).
Infrastructure
2016 2015
Revenue (GBPm) 489.6 386.3
Profit from operations
(GBPm) 6.8 7.7
Operating profit
margin (%) 1.4 2.0
Order book (GBPm) 1,160 1,230
Infrastructure secured several significant wins during the year. Our joint venture with Costain was appointed as a delivery partner by Highways England for its Smart Motorways programme, which is worth a total of GBP1.5 billion. The joint venture has been allocated three construction packages, with a value to Galliford Try of more than GBP180 million. We are working on three of the AMP5 water frameworks in England, Scotland and Wales and we have been awarded a GBP75 million package of biomass energy plants. In addition, the Manchester Airports Group, Network Rail and Environment Agency frameworks all continue to provide good workstreams.
Infrastructure's profit from operations was GBP6.8 million (2015: GBP7.7 million), representing a margin of 1.4% (2015: 2.0%).
PPP Investments
2016 2015
Revenue (GBPm) 25.0 28.8
(Loss)/Profit from
operations (GBPm) (1.4) 3.7
Directors Valuation
(GBPm) 21.5 18.1
During the year, PPP Investments invested GBP6.6 million in equity and disposed of investments generating an aggregate profit on disposal of GBP0.5 million compared to a GBP6.6 million profit on disposal in 2015.
In addition to making its own investments, PPP Investments continued to provide good opportunities for our Construction and facilities management businesses, with projects closed during the year adding over GBP300 million to the order books for these divisions.
There were delays to closing a number of PPP contracts in Scotland in the first half of the financial year while a public sector accounting classification issue was resolved. We took the opportunity to review opportunities in other markets and have developed new models for the student housing, energy service company and private rented sectors, which see us well positioned for the future.
HEALTH, SAFETY AND ENVIRONMENT
Keeping our people safe and healthy is our number one priority.
Our centralised Health, Safety and Sustainability (HS&S) function is independent of our business units and reports directly to the Executive Board. Across the business we retain around 65 HS&S professionals and a BS OHSAS 18001 certified management system that covers the entire Group. Every site is subject to a monthly HS&S review, which covers on-site performance and - crucially - planning for safety in the next four weeks. Our behavioural safety programme, 'Challenging Beliefs, Affecting Behaviour', is central to our approach.
Strong business growth and employee churn mean that we continue to manage the challenge of inducting large numbers of new people on our sites. We believe that continued training and effective supervision, along with initiatives such as our 'Golden Rules' and our new health and safety database, will help us to achieve continuing improvement. We will also focus increasingly on health and wellbeing, building on initiatives we are currently trialling in our business.
BOARD
Peter Truscott was appointed as Chief Executive with effect from 1 October 2015 with Greg Fitzgerald becoming Non-Executive Chairman on 1 January 2016.
Further to his previous announcement in 2014, Greg Fitzgerald announced his decision to retire from the Board following conclusion of the 2016 AGM on 11 November 2016. Following Greg Fitzgerald stepping down, Peter Ventress, the current Deputy Chairman and Senior Independent Director, will assume the role of Non-Executive Chairman.
As previously announced, Ken Gillespie retired from the Board on 31 July 2016 and will step down from the Group in February 2017.
EXECUTIVE BOARD
From 6 September 2016 Stephen Teagle, Chief Executive of Partnerships and Regeneration, Tom Nicholson, Linden Homes Divisional Chairman East, and Andrew Hammond, Linden Homes Divisional Chairman West, joined the Executive Board.
Consolidated income statement
for the year ended 30 June 2016
2016 2015
---------------------------------- ----- --------- ---------------------------------------
Pre-exceptional Exceptional
Total items items Total
Notes GBPm GBPm GBPm GBPm
---------------------------------- ----- --------- --------------- ----------- ---------
Group revenue 2 2,494.9 2,348.4 - 2,348.4
Cost of sales (2,223.2) (2,081.2) - (2,081.2)
---------------------------------- ----- --------- --------------- ----------- ---------
Gross profit 271.7 267.2 - 267.2
Administrative expenses (152.3) (144.2) (3.7) (147.9)
Profit on disposal of property
plant and equipment 5.2 - - -
Share of post tax profits from
joint ventures 19.2 5.0 - 5.0
---------------------------------- ----- --------- --------------- ----------- --------- Profit before finance costs 143.8 128.0 (3.7) 124.3 Profit from operations 2 157.5 138.9 (3.7) 135.2 Share of joint ventures' interest and tax (9.4) (6.6) - (6.6) Amortisation of intangibles (4.3) (4.3) - (4.3) ---------------------------------- ----- --------- --------------- ----------- --------- Profit before finance costs 143.8 128.0 (3.7) 124.3 ---------------------------------- ----- --------- --------------- ----------- --------- Finance income 3 7.6 4.6 - 4.6 Finance costs 3 (16.4) (14.9) - (14.9) Profit before income tax 135.0 117.7 (3.7) 114.0 Income tax expense 4 (26.1) (22.5) 0.8 (21.7) ---------------------------------- ----- --------- --------------- ----------- --------- Profit for the year 108.9 95.2 (2.9) 92.3 ---------------------------------- ----- --------- --------------- ----------- --------- Earnings per share - Basic 6 132.5p 116.3p 112.8p - Diluted 6 131.3p 114.4p 110.9p ---------------------------------- ----- --------- --------------- ----------- ---------
Consolidated statement of comprehensive income
for the year ended 30 June 2016
2016 2015
GBPm GBPm
------------------------------------------------------------ ------ -----
Profit for the year 108.9 92.3
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or
loss
Actuarial (losses) recognised on retirement benefit
obligations (11.9) (5.8)
Deferred tax on items recognised in equity that will
not be reclassified 1.0 1.2
Current tax through equity 2.3 0.5
------ -----
Total items that will not be reclassified to profit
or loss (8.6) (4.1)
Items that may be reclassified subsequently to profit
or loss
Movement in fair value of derivative financial instruments:
- Movement arising during the financial year (5.4) (0.4)
- Reclassification adjustments for amounts included
in profit or loss 1.2 0.1
Deferred tax on items recognised in equity that may
be reclassified (1.0) 1.0
------ -----
Total items that may be reclassified subsequently
to profit or loss (5.2) 0.7
Other comprehensive (expense) for the year net of
tax (13.8) (3.4)
------------------------------------------------------------- ------ -----
Total comprehensive income for the year 95.1 88.9
------------------------------------------------------------- ------ -----
Balance sheet
at 30 June 2016
2015
GBPm
2016 (Restated
Notes GBPm - note 1)
------------------------------------ ----- --------- ----------
Assets
Non-current assets
Intangible assets 16.7 20.9
Goodwill 7 135.5 135.5
Property, plant and equipment 19.1 20.8
Investments in joint ventures 24.8 9.2
Financial assets
- Available for sale financial
assets 16.9 11.0
Trade and other receivables 10 75.8 28.3
Retirement benefit asset 13 - 1.2
Deferred income tax assets 2.2 3.0
------------------------------------ ----- --------- ----------
Total non-current assets 291.0 229.9
Current assets
Inventories 0.1 0.3
Developments 9 820.8 813.3
Trade and other receivables 10 718.0 711.5
Cash and cash equivalents 8 166.3 164.9
------------------------------------ ----- --------- ----------
Total current assets 1,705.2 1,690.0
------------------------------------ ----- --------- ----------
Total assets 1,996.2 1,919.9
------------------------------------ ----- --------- ----------
Liabilities
Current liabilities
Financial liabilities
- Borrowings 8 (0.3) (0.3)
Trade and other payables 11 (1,059.2) (984.2)
Current income tax liabilities (12.2) (14.5)
Provisions for other liabilities
and charges (0.3) (0.4)
------------------------------------ ----- --------- ----------
Total current liabilities (1,072.0) (999.4)
------------------------------------ ----- --------- ----------
Net current assets 633.2 690.6
------------------------------------ ----- --------- ----------
Non-current liabilities
Financial liabilities
- Borrowings 8 (174.7) (181.9)
- Derivative financial liabilities (4.5) (0.3)
Retirement benefit obligations 13 (4.3) -
Other non-current liabilities 12 (139.1) (167.2)
Provisions for other liabilities
and charges (1.6) (1.9)
------------------------------------ ----- --------- ----------
Total non-current liabilities (324.2) (351.3)
------------------------------------ ----- --------- ----------
Total liabilities (1,396.2) (1,350.7)
------------------------------------ ----- --------- ----------
Net assets 600.0 569.2
------------------------------------ ----- --------- ----------
Equity
Ordinary shares 41.4 41.1
Share premium 194.4 191.8
Other reserves 4.8 4.8
Retained earnings 359.4 331.5
------------------------------------ ----- --------- ----------
Total equity attributable to owners
of the Company 600.0 569.2
------------------------------------ ----- --------- ----------
Consolidated statement of changes in equity
for the year ended 30 June 2016
Total
Ordinary Share Other Retained shareholders'
shares premium reserves earnings equity
Notes GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ----- -------- -------- --------- --------- --------------
Consolidated statement
At 1 July 2014 41.1 191.8 4.8 296.5 534.2
Profit for the year - - - 92.3 92.3
Other comprehensive (expense) - - - (3.4) (3.4)
---------------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for the year - - - 88.9 88.9
Transactions with owners:
Dividends 5 - - - (49.3) (49.3)
Share-based payments - - - 3.9 3.9
Purchase of own shares - - - (8.5) (8.5)
At 1 July 2015 41.1 191.8 4.8 331.5 569.2
Profit for the year - - - 108.9 108.9
Other comprehensive (expense) - - - (13.8) (13.8)
---------------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for the year - - - 95.1 95.1
Transactions with owners:
Dividends 5 - - - (59.3) (59.3)
Share-based payments - - - 4.0 4.0
Purchase of own shares - - - (11.9) (11.9)
Issue of shares 0.3 2.6 - - 2.9 At 30 June 2016 41.4 194.4 4.8 359.4 600.0 ---------------------------------------- ----- -------- -------- --------- --------- --------------
Statement of cash flows
for the year ended 30 June 2016
2016 2015
Notes GBPm GBPm
------------------------------------------ ----- ------ -------
Cash flows from operating activities
Continuing operations
Profit before finance costs 143.8 124.3
Adjustments for:
Depreciation and amortisation 8.6 8.4
Profit on sale of property, plant
and equipment (5.2) -
Profit on sale of available for
sale financial assets (0.5) (7.0)
Share-based payments 4.0 3.9
Share of post-tax profits from
joint ventures (19.2) (5.0)
Movement on provisions (0.4) (0.6)
Other non-cash movements 0.4 0.7
------------------------------------------ ----- ------ -------
Net cash generated from/(used in)
operations before pension deficit
payments and changes in working
capital 131.5 124.7
Deficit funding payments to pension
schemes (6.6) (6.2)
------------------------------------------ ----- ------ -------
Net cash generated from/(used in)
operations before changes in working
capital 124.9 118.5
Decrease in inventories 0.2 -
(Increase) in developments (7.5) (101.6)
(Increase) in trade and other receivables (54.0) (190.0)
Increase/(decrease) in trade and
other payables 46.1 240.9
------------------------------------------ ----- ------ -------
Net cash generated from/(used in)
operations 109.7 67.8
Interest received 7.6 3.6
Interest paid (14.6) (11.7)
Income tax (paid)/received (25.3) (20.1)
------------------------------------------ ----- ------ -------
Net cash generated from operating
activities 77.4 39.6
------------------------------------------ ----- ------ -------
Cash flows from investing activities
Dividends received from joint ventures 3.6 0.4
Acquisition of available for sale
financial assets (6.6) (1.4)
Proceeds from available for sale
financial assets 1.2 12.8
Purchase of intangible assets (0.1) -
Business combinations - (21.6)
Cash acquired with acquired subsidiary
undertakings - 23.6
Acquisition of property, plant
and equipment (7.8) (6.7)
Proceeds from sale of property,
plant and equipment 10.4 0.1
------------------------------------------ ----- ------ -------
Net cash generated from investing
activities 0.7 7.2
------------------------------------------ ----- ------ -------
Cash flows from financing activities
Net proceeds from issue of ordinary
share capital 2.9 -
Purchase of own shares (11.9) (8.5)
Increase in borrowings (8.4) 35.5
Dividends paid to Company shareholders (59.3) (49.3)
------------------------------------------ ----- ------ -------
Net cash (used in) financing activities (76.7) (22.3)
------------------------------------------ ----- ------ -------
Net increase in cash and cash equivalents 1.4 24.5
------------------------------------------ ----- ------ -------
Cash and cash equivalents at 1
July 164.9 140.4
------------------------------------------ ----- ------ -------
Cash and cash equivalents at 30
June 8 166.3 164.9
------------------------------------------ ----- ------ -------
Notes to the consolidated financial statements
1. Basis of preparation
This consolidated financial information has been prepared in accordance with the Listing Rules of the Financial Conduct Authority and uses EU adopted International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs), IFRS Interpretations committee and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies adopted are consistent with those described in the Annual Report and Financial Statements 2015 which have not changed significantly, other than updating the Group's policy on timing of recognition of conditional land acquisitions as set out in the inventories and developments policy below. The financial information set out in this document does not constitute statutory accounts for the years ended 30 June 2015 or 30 June 2016 but is derived from the Annual Report and Financial Statements 2016. The Annual Report and Financial Statements for 2015 have been delivered to the Registrar of Companies and the Annual Report and Financial Statements for 2016 will be delivered to the Registrar of Companies in due course. The auditors have reported on those accounts and have given an unqualified report which does not contain a statement under Chapter 3 of Part 16 of the Companies Act 2006.
Land inventory is recognised at the time a liability is recognised. Previously the Group generally recognised land inventory after the exchange of conditional contracts, when it was considered virtually certain the contract would be completed. Having completed a review of the policy in the year, and a comparison of our sector peer group, the Group has determined it is more appropriate to recognise land inventory on unconditional exchange of contract or once the acquisition has completed. This had the effect of reducing land inventory and development land payables at 30 June 2016 by GBP105 million, and reducing the interest charge on discounted payables by GBP0.6 million in the year. The Group has restated its 30 June 2015 land inventory and development land payables gures accordingly, by GBP166 million, but determined that the impact on previous period results and reserves was not material.
Full financial statements that comply with IFRS are included in the Annual Report and Financial Statements 2016 which will be made available to shareholders in October 2016 and will be available at www.gallifordtry.co.uk.
2. Segmental reporting
Segmental reporting is presented in the consolidated financial statements in respect of the Group's business segments, which are the primary basis of segmental reporting. The business segmental reporting reflects the Group's management and internal reporting structure. Segmental results include items directly attributable to the segment as well as those that can be allocated on a reasonable basis. As the Group has no material activities outside the UK, segment reporting is not required by geographical region.
The chief operating decision-makers (CODM) have been identified as the Group's Chief Executive and Finance Director. The CODM review the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments as Linden Homes; Partnerships & Regeneration; Construction, including Building and Infrastructure; and PPP Investments. The business of each segment is described in the Strategic Report.
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.
Primary reporting format - business segments
Construction
------------------------- ------- --------------- --------------------------------- ------------ ------- -------
Linden Partnerships PPP Central
Homes & Regeneration Building Infrastructure Total Investments costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Year ended 30 June 2016
Group revenue and share
of joint ventures'
revenue 840.8 300.6 1,013.8 489.6 1,503.4 25.0 0.6 2,670.4
Share of joint ventures'
revenue (132.3) (15.5) (0.7) (9.8) (10.5) (17.2) - (175.5)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Group revenue 708.5 285.1 1,013.1 479.8 1,492.9 7.8 0.6 2,494.9 ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Segment result: Profit/(loss) from operations before share of joint ventures' profit 120.8 9.6 8.9 6.8 15.7 (1.4) (15.8) 128.9 Share of joint ventures' profit 26.4 2.1 0.1 - 0.1 - - 28.6 ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit/(loss) from operations * 147.2 11.7 9.0 6.8 15.8 (1.4) (15.8) 157.5 Share of joint ventures' interest and tax (8.7) (0.7) - - - - - (9.4) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit/(loss) before finance costs, amortisation and taxation 138.5 11.0 9.0 6.8 15.8 (1.4) (15.8) 148.1 Finance income 6.4 0.3 - 0.5 0.5 0.8 (0.4) 7.6 Finance (costs) (46.6) (0.8) (0.2) - (0.2) (1.1) 32.3 (16.4) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit/(loss) before amortisation and taxation 98.3 10.5 8.8 7.3 16.1 (1.7) 16.1 139.3 Amortisation of intangibles (1.0) - (2.2) - (2.2) - (1.1) (4.3) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit before taxation 97.3 10.5 6.6 7.3 13.9 (1.7) 15.0 135.0 Income tax expense (26.1) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit for the year 108.9 ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Year ended 30 June 2015 Group revenue and share of joint ventures' revenue 779.0 329.4 906.9 386.3 1,293.2 28.8 0.3 2,430.7 Share of joint ventures' revenue (47.4) (10.8) (1.1) (9.9) (11.0) (13.1) - (82.3) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Group revenue 731.6 318.6 905.8 376.4 1,282.2 15.7 0.3 2,348.4 ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Segment result: Profit/(loss) from operations before share of joint ventures' profit 113.9 8.5 7.7 7.7 15.4 3.7 (14.2) 127.3 Share of joint ventures' profit 10.4 0.9 0.3 - 0.3 - - 11.6 ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit/(loss) from operations * 124.3 9.4 8.0 7.7 15.7 3.7 (14.2) 138.9 Exceptional items - - (3.7) - (3.7) - - (3.7) Share of joint ventures' interest and tax (6.0) (0.5) - - - (0.1) - (6.6) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit/(loss) before finance costs, amortisation and taxation 118.3 8.9 4.3 7.7 12.0 3.6 (14.2) 128.6 Finance income 4.2 - - 0.8 0.8 - (0.4) 4.6 Finance (costs) (42.7) (0.3) (0.8) - (0.8) (0.6) 29.5 (14.9) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit/(loss) before amortisation and taxation 79.8 8.6 3.5 8.5 12.0 3.0 14.9 118.3 Amortisation of intangibles (1.0) - (2.2) - (2.2) - (1.1) (4.3) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit before taxation 78.8 8.6 1.3 8.5 9.8 3.0 13.8 114.0 Income tax expense (21.7) ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- ------- Profit for the year 92.3 ------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
* Profit from operations is stated before finance costs, amortisation, exceptional items, share of joint ventures' interest and tax and taxation.
Inter-segment revenue, which is priced on an arm's length basis, is eliminated from Group revenue above. In the year to 30 June 2016 this amounted to GBP79.9 million (2015: GBP97.9 million) of which GBP35.7 million (2015: GBP43.1 million) was in Building, GBP42.9 million (2015: GBP53.5 million) was in Infrastructure and GBP1.3 million (2015: GBP1.3 million) was in central costs.
Balance Sheet
Construction
---------------- ----- ------- --------------- --------------------------------- ------------ ------- ---------
Linden Partnerships PPP
Homes & Regeneration Building Infrastructure Total Investments Central Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
30 June 2016
Goodwill
& intangible
assets 53.4 6.0 47.7 37.2 84.9 - 7.9 152.2
Working capital
employed 601.7 38.0 (81.6) (74.0) (155.6) 15.4 (43.0) 456.5
Net cash/(debt) 8 (525.0) (12.1) 90.1 71.0 161.1 (7.8) 375.1 (8.7)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Net assets 130.1 31.9 56.2 34.2 90.4 7.6 340.0 600.0
Total Group
liabilities (1,396.2)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Total Group
assets 1,996.2
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
30 June 2015
Goodwill
& intangible
assets 54.4 6.0 49.9 37.2 87.1 - 8.9 156.4
Working capital
employed 615.5 2.4 (126.6) (54.0) (180.6) 8.0 (15.2) 430.1
Net cash/(debt) 8 (560.1) 15.0 127.6 45.1 172.7 1.0 354.1 (17.3)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Net assets 109.8 23.4 50.9 28.3 79.2 9.0 347.8 569.2
Total Group
liabilities (1,350.7)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Total Group
assets 1,919.9
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Return on net assets for Linden Homes is calculated as Linden Homes EBITA divided by average of the aggregate of Linden Homes and Central net assets.
3. Net finance costs
2016 2015
GBPm GBPm
----------------------------------------------------- ------ ------
Interest receivable on bank deposits 0.1 0.1
Interest receivable from joint ventures 7.0 3.5
Net finance income on retirement benefit obligations 0.2 0.2
Unwind of discount on shared equity receivables - 0.8
Other 0.3 -
----------------------------------------------------- ------ ------
Finance income 7.6 4.6
Interest payable on borrowings (15.5) (12.3)
Unwind of discounted payables (0.8) (2.0)
Other (0.1) (0.6)
----------------------------------------------------- ------ ------
Finance costs (16.4) (14.9)
Net finance costs (8.8) (10.3)
----------------------------------------------------- ------ ------
4. Income tax expense
2016 2015
GBPm GBPm
---------------------------------------------------------- ----- -----
Analysis of expense in year
Current year's income tax
Current tax 24.4 26.2
Deferred tax - (3.4)
Adjustments in respect of prior years
Current tax 0.9 (3.5)
Deferred tax 0.8 2.4
----------------------------------------------------------- ----- -----
Income tax expense 26.1 21.7
----------------------------------------------------------- ----- -----
Tax on items recognised in other comprehensive income
Deferred tax expense/(credit) for share-based payments 1.8 (1.0)
Current tax (credit) for retirement benefit obligations (1.3) -
Current tax (credit) for share-based payments (1.0) (0.5)
Deferred tax (credit) on derivative financial instruments (0.8) -
Deferred tax (credit) on retirement benefit obligations (1.0) (1.2)
----------------------------------------------------------- ----- -----
Tax recognised in other comprehensive income (2.3) (2.7)
----------------------------------------------------------- ----- -----
Total taxation 23.8 19.0
----------------------------------------------------------- ----- -----
The standard rate of Corporation Tax in the UK changed from 21% to 20% with effect from 1 April 2015. Accordingly, the Group's profits for the accounting period to 30 June 2015 were taxed at a blended standard rate of 20.75%; and for the period to 30 June 2016 are taxed at the standard rate of 20.0%.
5. Dividends
2016 2015
-------------------------------- --------------- ---------------
pence per pence per
GBPm share GBPm share
-------------------------------- ---- --------- ---- ---------
Previous year final 37.8 46.0 31.3 38.0
Current period interim 21.5 26.0 18.0 22.0
-------------------------------- ---- --------- ---- ---------
Dividend recognised in the year 59.3 72.0 49.3 60.0
-------------------------------- ---- --------- ---- ---------
The following dividends were declared by the Company in respect of each accounting period presented:
2016 2015
------------------------------ --------------- ---------------
pence per pence per
GBPm share GBPm share
------------------------------ ---- --------- ---- ---------
Interim 21.5 26.0 18.0 22.0
Final 46.4 56.0 37.8 46.0
------------------------------ ---- --------- ---- ---------
Dividend relating to the year 67.9 82.0 55.8 68.0
------------------------------ ---- --------- ---- ---------
The directors are proposing a final dividend in respect of the financial year ended 30 June 2016 of 56 pence per share, bringing the total dividend in respect of 2016 to 82 pence per share (2015: 68 pence). The final dividend will absorb approximately GBP46.4 million of equity. Subject to shareholder approval at the AGM to be held on 11 November 2016, the dividend will be paid on 23 November 2016 to shareholders who are on the register of members on 28 October 2016.
6. Earnings Per Share
Basic and diluted earnings per share (EPS)
Basic EPS is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding those held by the Trust, which are treated as cancelled.
Under normal circumstances, the average number of shares is diluted by reference to the average number of potential ordinary shares held under option in the period. The dilutive effect amounts to the number of ordinary shares which would be purchased using the aggregate difference in value between the market value of shares and the share option price. Only shares that have met their cumulative performance criteria are included in the dilution calculation. The Group has two classes of potentially dilutive ordinary shares: those share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year and the contingently issuable shares under the Group's long-term incentive plans. A loss per share cannot be reduced through dilution, hence this dilution is only applied where the Group has reported a profit.
The earnings and weighted average number of shares used in the calculations are set out below.
2016 2015
------------------------------- -------------------------------- -------------------------------
Weighted Weighted
average Per share average Per share
Earnings number of amount Earnings number of amount
GBPm shares pence GBPm shares pence
------------------------------- -------- ----------- --------- -------- ---------- ---------
Basic EPS - pre-exceptional
Earnings attributable
to ordinary shareholders
pre-exceptional items 108.9 82,166,065 132.5 95.2 81,833,586 116.3
Basic EPS
Earnings attributable
to ordinary shareholders
post-exceptional items 108.9 82,166,065 132.5 92.3 81,833,586 112.8
Effect of dilutive securities:
Options 748,016 1,400,331
Diluted EPS 108.9 82,914,081 131.3 92.3 83,233,917 110.9
------------------------------- -------- ----------- --------- -------- ---------- ---------
7. Goodwill
GBPm
------------------------------------------------------------------ -----
Cost
At 1 July 2014 115.7
Additions in year to 30 June 2015 20.5
------------------------------------------------------------------ -----
At 30 June 2015 and 30 June 2016 136.2
------------------------------------------------------------------ -----
Aggregate impairment at 1 July 2014, 1 July 2015 and 30 June 2016 (0.7)
------------------------------------------------------------------ -----
Net book amount
At 30 June 2015 and 30 June 2016 135.5
------------------------------------------------------------------ -----
30 June 2014 115.0
------------------------------------------------------------------ -----
The increase in goodwill in the year to 30 June 2015 arose from the acquisition of Miller Construction and Shepherd Homes. This was allocated to the Building and Linden Homes segments respectively.
Goodwill is allocated to the Group's CGUs identified according to business segment. The goodwill is attributable to the following business segments:
2016 2015
GBPm GBPm
---------------------------- ----- -----
Linden Homes 52.5 52.5
Partnerships & Regeneration 5.8 5.8
Building 40.0 40.0
Infrastructure 37.2 37.2
---------------------------- ----- -----
135.5 135.5
---------------------------- ----- -----
Goodwill is tested for impairment at least annually. The recoverable amount of a CGU is determined based on value in use calculations. These calculations use pre-tax cash flow projections based on future financial budgets approved by the Board, based on past performance and its expectation of market developments. The key assumptions within these budgets relate to revenue and the future profit margin achievable, in line with our strategy as set out in the Strategic Report. Future budgeted revenue is based on management's knowledge of actual results from prior years and latest forecasts for the current year, along with the existing secured works, management's expectation of the future level of work available within the market sector and expected changes in selling volumes and prices for completed houses. In establishing future profit margins, the margins currently being achieved are considered in conjunction with expected inflation rates in each cost category and to reflect the current market value of land being acquired.
8. Cash and cash equivalents
2016 2015
GBPm GBPm
---------------------------------------------------- ------- -------
Net (debt)
Cash and cash equivalents excluding bank overdrafts 166.3 164.9
Current borrowings (0.3) (0.3)
Non-current borrowings (174.7) (181.9)
Net (debt) (8.7) (17.3)
---------------------------------------------------- ------- -------
9. Developments
2015
GBPm
2016 (Restated
GBPm - note 1)
----------------- ----- ----------
Land 538.7 579.3
Work in progress 282.1 234.0
----------------- ----- ----------
820.8 813.3
----------------- ----- ----------
10. Trade and other receivables
2016 2015
GBPm GBPm
---------------------------------------------- ----- -----
Amounts falling due within one year:
Trade receivables 162.6 178.2
Less: provision for impairment of receivables (0.8) (1.6)
---------------------------------------------- ----- -----
Trade receivables - net 161.8 176.6
Amounts recoverable on construction contracts 283.7 260.4
Amounts due from joint ventures 125.3 161.2
Other receivables 49.6 46.4
Prepayments and accrued income 97.6 66.9
---------------------------------------------- ----- -----
718.0 711.5
---------------------------------------------- ----- -----
2016 2015
GBPm GBPm
------------------------------------------- ----- -----
Amounts falling due in more than one year:
Amounts due from joint ventures 75.4 27.8
Other receivables 0.4 0.5
------------------------------------------- ----- -----
75.8 28.3
------------------------------------------- ----- -----
11. Trade and other payables
2015
GBPm
2016 (Restated
GBPm - note 1)
------------------------------------------------------- ------- ----------
Payments received on account on construction contracts 77.8 32.1
Trade payables 296.6 270.6
Development land payables 104.2 94.6
Amounts due to joint ventures 31.9 15.9
Other taxation and social security payable 17.0 25.2
Other payables 7.0 3.3
Accruals and deferred income 524.7 542.5
------------------------------------------------------- ------- ----------
1,059.2 984.2
------------------------------------------------------- ------- ----------
12. Other non-current liabilities
2015
GBPm
2016 (Restated
GBPm - note 1)
----------------------------- ----- ----------
Development land payables 98.6 130.2
Other payables 0.6 3.4
Accruals and deferred income 39.9 33.6
----------------------------- ----- ----------
139.1 167.2
----------------------------- ----- ----------
13. Retirement benefit obligations
All employees are entitled to join the Galliford Try Pension Scheme, a defined contribution scheme established as a stakeholder plan, with a company contribution based on a scale dependent on the employee's age and the amount they choose to contribute. The Group also operates three defined benefit pension schemes, all of which are closed to future service accrual.
Pension costs for the schemes were as follows:
2016 2015
GBPm GBPm
----------------------------------------------------------- ----- -----
Defined benefit schemes - expense recognised in the income
statement 0.2 0.2
Defined contribution schemes 17.1 14.2
----------------------------------------------------------- ----- -----
Total included within employee benefit expenses 17.3 14.4
----------------------------------------------------------- ----- -----
The principal actuarial assumptions used in the calculation of the defined benefit schemes are as follows:
2016 2015
----------------------------------------- ----- -----
Rate of increase in pensionable salaries n/a n/a
Rate of increase in pensions in payment 2.90% 3.25%
Discount rate 3.00% 3.75%
Retail price inflation 3.00% 3.35%
Consumer price inflation 2.00% 2.35%
----------------------------------------- ----- -----
The fair value of the assets and present value of the obligations at 30 June of the Group's defined benefit arrangements are as follows:
2016 2015
GBPm GBPm
--------------------------------------------- ------- -------
Fair value of plan assets 231.4 220.1
Present value of defined benefit obligations (235.7) (218.9)
--------------------------------------------- ------- -------
(Deficit)/surplus in scheme recognised as
non-current (liability)/asset (4.3) 1.2
--------------------------------------------- ------- -------
14. Share-based payments
The Company operates performance-related share incentive plans for executives. The Company also operates sharesave schemes. The total charge for the year relating to employee share-based payment plans was GBP4.0 million (2015: GBP3.9 million), all of which related to equity-settled share-based payment transactions. After deferred tax, the total charge was GBP1.4 million (2015: GBP4.9 million).
15. Guarantees and contingent liabilities
Galliford Try 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 and joint ventures, amounting to GBP313.8 million (2015: GBP312.3 million).
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.
16. Post balance sheet events
No matters have arisen since the year end that require disclosure in the financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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