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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -4.00 | -1.61% | 244.00 | 244.00 | 245.00 | 249.00 | 244.00 | 245.00 | 94,041 | 15:48:55 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contr-single-family Home | 1.39B | 9.1M | 0.0886 | 27.54 | 250.5M |
From Apr 2019 to Apr 2024
TIDMGFRD
RNS Number : 3679X
Galliford Try PLC
21 February 2017
GALLIFORD TRY PLC - HALF YEAR REPORT FOR THE SIX MONTHSED 31 DECEMBER 2016
STRENGTHENING OUR FOUNDATIONS TO SUPPORT STRATEGY FOR GROWTH; NEW TARGETS TO 2021
Financial H1 2017 H1 2016 Change Revenue (1) GBP1,308m GBP1,265m + 3% Group revenue (1) GBP1,235m GBP1,182m + 4% Profit before tax GBP63.0m GBP52.9m + 19% Earnings per share 61.9p 52.2p + 19% Dividend per share 32.0p 26.0p + 23% Net debt GBP113.8m GBP95.7m - GBP18m Group return on net assets (2) 24.9% 23.1% + 1.8%ppts
Group
-- Strong first half performance with profit before tax up 19% to GBP63.0 million, EPS up 19% to 61.9p and interim dividend up 23% to 32.0p reflecting confidence in the full year outlook.
-- Net debt of GBP113.8 million (H1 2016: GBP95.7 million), in line with expectation.
-- Balance sheet further strengthened with GBP450 million bank facility extended to 2022 on same terms; debt private placement of GBP100 million 10 year fixed-rate notes, adding flexibility and diversity of lenders.
-- Strategy to 2021 targeting sustainable growth and strong returns across all three businesses. Targets include 60% growth in profit before tax to FY 2021, a five year CAGR(3) on dividend of at least 5% and a return on net assets(2) in FY 2021 of at least 25%.
Linden Homes
-- Continued significant progress with operating margin rising to 18.2% (H1 2016: 17.0%).
-- Revenue up 12% to GBP407.6 million (H1 2016: GBP362.7 million) from 1,491 unit completions, 1,319 units net of joint venture partner share (H1 2016: 1,357 and 1,171 respectively).
-- Total sales currently reserved, contracted and completed increased by 8% to GBP857 million (H1 2016: GBP793 million).
-- 2021 financial targets include 4,750 - 5,000 units per annum, revenue of GBP1.25 billion - GBP1.35 billion and operating margin of 19% - 20%.
Partnerships and Regeneration
-- Operating margin of 3.4% (H1 2016: 3.0%), driven by planned increase in proportion of higher margin mixed tenure revenue.
-- Total revenue of GBP144.3 million (H1 2016: GBP150.2 million) reflecting expected lower contracting revenue in the first half, partially offset by higher revenue from mixed tenure sales. Full year growth expectations unchanged.
-- 16% increase in total sales currently reserved, contracted and completed at GBP92 million (H1 2016: GBP79 million) with contracting order book up 6% at GBP925 million (H1 2016: GBP875 million).
-- 2021 financial targets include 4,200 units (contracting and mixed tenure) per annum, revenue of GBP650 million and operating margin of 6% - 7%.
Construction
-- Revenue of GBP742.0 million (H1 2016: GBP738.6 million), with cash balance of GBP110.8 million (H1 2016: GBP154.7 million) reflecting delayed cash flows on some legacy projects.
-- Operating margin at 0.4% (H1 2016: 1.2%) continues to be constrained by the resolution of legacy contracts; margins on new projects support improving divisional returns in future years.
-- Order book solid at GBP3.4 billion (H1 2016: GBP3.7 billion), as the business continues its disciplined approach to contract selection.
-- 2021 financial targets include revenue of GBP1.8 billion, operating margin of at least 2% and net cash of GBP200 million.
Peter Truscott, Chief Executive, commented:
"The Group delivered another strong performance in the first half. Our reorganised management teams have settled well and are making positive strides towards their respective operating and financial targets.
We continue to see robust demand and pricing in residential markets, for both Linden Homes and Partnerships and Regeneration, driving good rates of sale, and the land market remains benign in all regions. Linden Homes continues to achieve margin improvement, including much improved overhead efficiency. Partnerships achieved a higher proportion of mixed tenure development revenue, resulting also in first-half margin growth. Construction is making steady progress in resolving legacy contracts, and the contribution from newer work is encouraging, demonstrating that the underlying business is strong.
Whilst we remain alert to potential uncertainties in the wider economy, we continue to see opportunity in all of our markets. We enter the new calendar year with strong order books: both Linden Homes and Partnerships are at record levels, and whilst Construction is lower than the prior year, it remains both at a very comfortable level and, more importantly, of high quality. Our improved debt facilities have further strengthened the balance sheet, providing financial flexibility to underpin our strategy for growth.
I am pleased that we are able to announce an interim dividend of 32 pence per share, in line with our sustainable and progressive policy.
When I joined Galliford Try in October 2015 I inherited three strong businesses with talented employees, excellent market reputations, and great potential. Over the last 16 months we have focused on enhancing the strengths of each business, to build a solid platform for further disciplined and profitable expansion. I am encouraged by the opportunities for improvement and growth in all three businesses, and we will share further detail on our strategy and targets in our presentation later this morning."
This announcement contains inside information.
For further enquiries:
Galliford Try Peter Truscott, Chief Executive 01895 855001 Graham Prothero, Finance Director Clara Melia, Investor Relations Tulchan Communications James Macey White / Martin Pengelley 020 7353 4200
Galliford Try will hold its half year results presentation for analysts and institutional investors at 09:30 am on Tuesday 21 February 2017 at Berry Bros. & Rudd, 2 St James's Street, London, SW1A 1EG. An audio webcast will be available at www.gallifordtry.co.uk/investors with a recording available later. Recorded interviews with Peter Truscott and Graham Prothero on the results will be available at www.gallifordtry.co.uk.
The results presentation will be followed by a strategy presentation commencing at 11:00 am.
(1) 'Revenue' includes share of joint ventures' revenue of GBP72.3 million (H1 2016: GBP82.6 million). 'Group revenue', where stated, excludes share of joint ventures.
(2) Group return on net assets represents annualised profit before tax, exceptional items, finance costs and amortisation divided by average net assets.
(3) Compound annual growth rate ("CAGR")
CURRENT TRADING AND OUTLOOK
We continue to monitor market conditions and consumer confidence closely, and are mindful of the uncertainty in the economic environment. However, as emphasised by the Housing White Paper, the government remains committed to increasing housing supply, which is positive for both Linden Homes and Partnerships and Regeneration. The market continues to enjoy good mortgage availability, along with low interest rates and the stimulus of Help-to-Buy.
Linden Homes has entered the second half with a strong forward order book, with total sales currently reserved, contracted and completed increased by 8% to GBP857 million (H1 2016: GBP793 million). Following the strong first half operating margin performance, we expect to see a full-year improvement in operating margin against FY 2016. The land market remains benign for all our regions, and we continue to pursue opportunities to acquire prime sites in good locations at attractive hurdle rates, while remaining disciplined in our expansion.
The Housing White Paper reaffirmed the significant opportunity we see for our Partnerships and Regeneration business, underlining that affordable housing remains high on the political agenda. Over the remainder of FY 2017 we expect the business to deliver revenue growth as we benefit from our geographic expansion and further margin improvement from a higher proportion of mixed-tenure revenue. Our full year growth expectations remain unchanged.
Construction remains focused on risk management and the quality of its order book. Full year revenue is expected to be broadly in line with FY 2016, underpinned by secured turnover of 94% for the current financial year and 62% for the next financial year (H1 2016: 99% and 71% respectively). We anticipate that the second half margin will continue to show the drag from legacy contracts, but are very encouraged by the performance of the newer work, which supports our target margins, and should begin to improve reported results from FY 2018.
INTERIM DIVID
Reflecting the Group's strong performance during the half year to 31 December 2016 the directors have declared an interim dividend of 32.0 pence per share (H1 2016: 26.0 pence) which will be paid on 6 April 2017 to shareholders on the register at close of business on 24 March 2017. The Group retains its target of 1.6 times cover for FY 2017.
STRATEGY TO 2021
The Group enters the next phase of its strategy with three strong businesses, led by experienced management teams. The resilience of our business model has been proven through the economic cycle, with the Group benefitting from the complementary cash flow profiles of its businesses and their different market risks. All three businesses have clearly defined plans to improve operating efficiency and grow both margins and revenues, providing the Group with confidence in its ability to deliver further growth, even against a backdrop of low growth in the wider economy.
Over the next four years to 2021, our focus is on continuing to deliver sustainable growth and strong returns to shareholders. Our plans are founded on three strategic pillars:
1. Operate sustainably: Each business has set out three strategic priorities to deliver growth towards its medium-term financial targets in 2021. Underpinning these priorities is the Group's recognition that longer-term value creation must balance financial performance with its obligations to all stakeholders, including clients, customers, employees and the communities and environment in which we operate.
2. Drive operating efficiencies: Across the Group there is an ongoing focus on streamlining and simplifying our operations to drive margin growth and enable us to respond faster to changing market conditions.
3. Maintain capital discipline: The Group is well financed having further strengthened the balance sheet to enhance resilience and flexibility. We will remain prudent in our approach to capital management, and our target period-end gearing level remains below 30%. We intend to continue to pay strong dividends, whilst maintaining an appropriate reinvestment in the growth of the business.
Summary Financial Targets to 2021
Our targets include 60% growth in profit before tax to FY 2021, a five year CAGR on dividend of at least 5% and a return on net assets in FY 2021 of at least 25%, whilst rebuilding dividend cover to 2.0x. The specific strategic priorities and targets for each business, are summarised below, and will be presented by the respective management teams at our strategy presentation at 11.00 am today.
Hot Features
Premium
Linden Homes FY21 FY16
------------------- ------------- ---------
4,750 -
Units (per annum) 5,000 3,078
Revenue GBP1.25bn GBP0.8bn
- GBP1.35bn
Operating profit
margin 19% - 20% 17.5%
Partnerships & FY21 FY16
Regeneration
------------------- -------- --------
Units (per annum) 4,200 2,126
Revenue GBP650m GBP301m
Operating profit
margin 6%-7% 3.9%
Construction FY21 FY16
------------------ ---------- ---------
Revenue GBP1.8bn GBP1.5bn
Operating profit
margin >2.0% 1.1%
Cash GBP200m GBP161m
FINANCIAL REVIEW
Group revenue for the half year to 31 December 2016 was up 4% at GBP1,235 million (H1 2016: GBP1,182 million). Revenue (including share of joint ventures) was up 3% to GBP1,308 million (H1 2016: GBP1,265 million).
The Group achieved a profit from operations (stated before finance costs, amortisation, exceptional items, tax and share of joint ventures' interest and tax) of GBP74.7 million, up 13% against the same period last year. Profit before tax was up 19% at GBP63.0 million (H1 2016: GBP52.9 million). Earnings per share for the period was 61.9 pence (H1 2016: 52.2 pence).
The taxation expense of GBP12.0 million reflects an estimated effective rate of 19.0% (H1 2016: 19.0%) for the full financial year to 30 June 2017. We anticipate our effective tax rate will continue to be just below the headline rate of corporation tax for the foreseeable future.
We have extended our banking facility for a further two years (to February 2022), on the same terms, and with operating requirements improved to match our growth plans; we are delighted with the continuing support of our syndicate banks.
We also announce this morning the completion of a debt private placement of GBP100 million 10 year Sterling notes, at a fixed rate of 4.03%. The notes were issued in a bilateral deal with Pricoa in London, and we are pleased to open a new relationship with another strong lender, thereby diversifying our sources of funding and enhancing our flexibility and resilience.
The Group maintained its strong focus on cash management throughout the period. Net debt at 31 December 2016 was GBP113.8 million (H1 2016: GBP95.7 million), which represents gearing of 19.0%. Average debt over the six months to 31 December 2016 was in line with expectations at GBP231 million compared to GBP194 million in the equivalent period last year and GBP204 million in the full year to June 2016. We continue to benefit from deferred payments for land acquisition with land creditors reducing to GBP193.3 million (H1 2016 restated: GBP240.7 million). As previously announced, the Group revised its policy for recognising land acquisition in FY 2016 to bring the Group's approach in line with the peer group and therefore the prior year comparative has been restated accordingly.
Construction's cash balance of GBP110.8 million (H1 2016: GBP154.7 million) was lower than normal. This reflected the deferral of several contracts in the Building division (following the referendum), which will unwind as these projects get underway; also delayed receipts from some legacy projects, which caused the Group to finance a higher than planned level of working capital by circa GBP40 million, and which will continue for several months pending resolution. Cash in the underlying business remains strong, at GBP160 million, representing 11% of annualised turnover.
LINDEN HOMES
H1 2017 H1 2016 Change
Revenue GBPm 407.6 362.7 + 12%
Profit from operations
GBPm 74.3 61.5 + 21%
Operating profit + 1.2%
margin % 18.2 17.0 pts
Housing market conditions, both private and affordable, have remained robust in all our regions. Demand has continued at a healthy level, supported by good mortgage availability.
Revenue during the six months to 31 December 2016 increased to GBP407.6 million (H1 2016: GBP362.7 million). Within this total, affordable sales were GBP34 million (H1 2016: GBP23 million). Unit completions were 1,491, 1,319 net of joint venture partners' share (H1 2016: 1,357 and 1,171 respectively). The total includes 1,155 private and 336 affordable sales (H1 2016: 1,124 and 233 respectively).
Average selling price on private sales increased to GBP338,000 (H1 2016: GBP334,000). The average selling price for affordable sales was GBP114,000 (H1 2016: GBP110,000) leading to a combined average selling price of GBP287,000 (H1 2016: GBP295,000). Cancellation levels continue to remain around the long term average at 19% (H1 2016: 17%).
The average number of outlets during the period was 75, broadly in line with 76 in the six months to 31 December 2015, but having decreased marginally from 80 in the 12 months to 30 June 2016. During the six months to 31 December 2016 we achieved a rate of sale of 0.56 unit sales per outlet per week (H1 2016: 0.57). Since 1 January 2017 we have achieved a rate of sale of 0.70 unit sales per outlet per week.
Profit from operations was up 21% to GBP74.3 million over the same period last year. The business is making good progress on implementing initiatives to rationalise operating processes. Overheads reduced to 5.3% of revenue achieving an operating margin of 18.2% (H1 2016: 17.0%).
The business continues to generate recurring revenues and profits from land sales, mainly into co-funded (joint venture) projects. These profits represent the partner's contribution to the uplift in land value at the point of entry into the joint venture, with Linden Homes share of such uplift deferred until the units are sold. During the six months to 31 December 2016 we sold land totalling GBP10.3 million (H1 2016: GBP5.6 million). In response to perceived increased market risk following the referendum, we accelerated several joint venture sales which we had planned for the current year; hence the first half level was higher than we anticipate for the second half. The operating margin of 18.2% includes the effect of these land sales. Excluding profits from land sales, the operating margin in the period was 16.3% (H1 2016: 15.8%).
Sales reserved, exchanged or completed are currently at GBP857 million (H1 2016: GBP793 million) of which GBP699 million is for the current financial year representing 72% of projected sales for the year (H1 2016: GBP620 million, 71%).
Linden Homes has 97% of land secured for the financial year to 30 June 2018 and 74% secured for 2019 (H1 2016: 100% and 75% respectively). The Group's total landbank including Partnerships and Regeneration is currently 14,250 plots (H1 2016: 15,500). Strategic land totals 1,992 acres, from which we expect to generate around 11,400 plots. The land market remains benign.
PARTNERSHIPS AND REGENERATION
H1 2017 H1 2016 Change
Revenue GBPm 144.3 150.2 - 4%
Profit from operations
GBPm 4.9 4.5 + 9%
Operating profit + 0.4%
margin % 3.4 3.0 pts
Revenue from mixed tenure development increased by 16% to GBP34.6 million (H1 2016: GBP29.7 million), while contracting revenue of GBP109.7 million was down 9% (H1 2016: GBP120.5 million), as some larger contracts concluded in the period. Overall revenue during the six months to 31 December 2016 decreased by 4% to GBP144.3 million (H1 2016: GBP150.2 million). Our full year growth expectations remain unchanged.
Demand for affordable homes outpaces supply and client sentiment for mixed tenure investment has strengthened, providing opportunities for both Partnerships and Regeneration and Linden Homes. The business secured an award of GBP18.8 million under the Home and Communities Agencies Affordable Homes Programme to deliver shared ownership homes and we have extended our joint venture activity with financially robust Registered Provider clients. Partnerships and Regeneration continued to strengthen its relationship with the ExtraCare Charitable Trust, agreeing two contracts, both worth GBP44 million, to build new retirement villages at Stoke Gifford, near Bristol and Wixams in Bedfordshire. During the period the Division also concluded a contract with the developer St Modwen to build a GBP21 million accommodation facility for personnel at the Royal Centre for Defence Medicine in Longbridge, Birmingham.
The geographical expansion of our Partnerships and Regeneration business continues with the new office in Bristol securing mixed tenure regeneration and contracting opportunities at good margins and our plans for new Southern and Midlands businesses are under way.
The contracting order book increased 6% to GBP925 million (H1 2016: GBP875 million) and mixed tenure sales currently reserved, exchanged or completed improved to GBP92 million (H1 2016: GBP79 million). Partnerships and Regeneration's landbank is 2,750 plots (H1 2016: 2,700).
CONSTRUCTION
H1 2017 H1 2016 Change
Revenue GBPm 742.0 738.6 + 0.4%
Profit from operations
GBPm 2.7 8.5 - 68%
Operating profit - 0.8%
margin % 0.4 1.2 pts
The construction market remains stable with a pipeline of opportunities in the public and regulated sectors. The infrastructure pipeline is encouraging but we remain cautious about the amount of time it takes to progress these projects. In Building, the number of opportunities from the public sector remains stable. Commercial projects suspended following the referendum have now been reactivated although for the medium term there remains a risk of weaker demand from private clients as businesses assess investments against the context of current macroeconomic uncertainty. Our strong focus on public and regulated sectors and framework opportunities is important in these conditions.
Construction delivered revenue of GBP742.0 million and margin of 0.4%. Cash balance held at 31 December 2016 was GBP110.8 million (H1 2016: GBP154.7 million), as set out in the Financial Review above. Order book is solid at GBP3.4 billion (H1 2016: GBP3.7 billion) comprising 14% in the regulated sector, 74% in public and 12% in the private sector. The Division has secured 94% of projected revenue for the current financial year and 62% for the next financial year (H1 2016: 99% and 71% respectively). In addition we have over GBP0.5 billion of future work at preferred bidder stage.
We continue to focus on robust project selection and risk management in the pre-construction phase targeting projects that have reasonable contract terms and risk profile. A selection of project wins in our Building and Infrastructure businesses in the period are summarised below.
Building
Building serves a range of clients across the whole of the UK including a substantial presence in Scotland. Profit from operations of GBP1.5 million was achieved on revenue of GBP492.2 million, representing a margin of 0.3% (H1 2016: GBP3.7 million, GBP517.8 million and 0.7% respectively). We are making good progress on completing historical contracts and are working through closing remaining final accounts. These projects, won in a more difficult economic climate, continue to constrain our result. Margins on new work are more robust, with cost estimates appropriately reflecting the inflationary effect of a weaker pound.
In the first six months of the current financial year Building won contracts worth over GBP250 million including the GBP72 million contract for the East Lothian Community Hospital in Haddington, Scotland, the GBP68 million Park View Student Village for Newcastle University, the GBP40 million 323-apartment private rental sector scheme for Dandara on the Arena Central site in Birmingham, and a GBP47 million contract to build the 50-60 Station Road commercial office space development in Cambridge on behalf of developer Brookgate. Building was also confirmed as one of six principal supply chain partners under the Department of Health's new ProCure 22 framework.
Building's order book is currently GBP2,418 million (H1 2016: GBP2,403 million).
Infrastructure
Infrastructure carries out civil engineering projects in highways, rail and aviation, environmental, water and waste, power and security markets. Profit from operations was GBP1.2 million on revenue of GBP249.8 million, representing a margin of 0.5% (H1 2016: GBP4.8 million on GBP220.8 million, representing a margin of 2.2%).
The Infrastructure market outlook remains positive across transport, energy and water with the business steadily increasing its portfolio of framework positions during the period. The business has a position in the Natural Resources Wales framework delivering coastal and river defence schemes (up to GBP45 million over four years), North Yorkshire County Council's carriageway planning and surfacing framework (up to GBP200 million over two years) and was confirmed as a Tier 1 alliance partner to Scottish Water responsible for delivering its Quality and Standards IV Capital Investment Programme for the regulatory period 2015-2021 (approximately GBP50 million in value). In addition, the business was appointed to Gatwick Airport's Capital Delivery Framework on three lots valued up to GBP300 million.
Infrastructure's order book currently stands at GBP992 million (H1 2016: GBP1,312 million).
PPP INVESTMENTS
PPP Investments specialises in delivering major building and infrastructure projects through public private partnerships. The business leads bid consortia and arranges finance, making equity investments and managing construction through to operations. Revenue was GBP12.8 million on which the loss from operations was GBP0.2 million (H1 2016: revenue GBP12.9 million and loss from operations GBP1.7 million).
PPP Investments continues to be active in Scotland on a wide variety of Hub projects. During the period we financially closed a number of schemes including East Lothian Community Hospital, West Calder High School and Inverurie and Foresterhills Health Centres. The business continues to monitor PF2 opportunities in England and we anticipate a programme of projects will be brought to market in the 2017 calendar year. We successfully handed over all schools in the PSBP North East project and are therefore well placed when pipeline announcements are made. In addition we have been working on a number of Student Residencies schemes and more general development opportunities which will generate pipeline for the Group's construction businesses.
HEALTH, SAFETY AND ENVIRONMENT
Health and safety remains of paramount importance and the Group is committed to achieving industry leading health, safety and environmental standards. Our systems are fully accredited to both BS 18001 and ISO 14001 and are subject to regular third party independent audits. Our bespoke and award-winning behavioural safety programme 'Challenging Beliefs, Affecting Behaviour' continues to be developed across the Group and its supply chain, with over 1,500 behavioural 'coaches' now trained. We continue to look at further ways to address the challenge of improving health and safety performance, and have this year, on the back of a record 906 Directors Safety Leadership tours, introduced a Health and Safety Leadership Guide to gain even further impact from this important aspect of our culture of care.
SUSTAINABILITY
Sustainability continues to underpin the Group's approach, with each Division committed to achieving stakeholder-aligned targets in relation to six fundamental areas - Health & Safety, Environment & Climate Change, Our People, Communities, Customers and Supply Chain. The Group retained membership of the FTSE4Good index, and outperformed the industry on the CDP carbon disclosure benchmark. Linden Homes achieved a Silver Award in both the NextGeneration Sustainability Benchmark and What House? Sustainable Developer of the Year category for a second year running. The recent relaunch of our Code of Conduct ('Doing the Right Thing') reinforces our values and expectations that all employees have a role to play in being a sustainable business.
BOARD
As previously announced, Peter Ventress was appointed Chairman and Terry Miller was appointed Senior Independent Director at the Annual General Meeting on 11 November 2016.
Condensed consolidated income statement
for the half year ended 31 December 2016 (unaudited)
Half
year
to
Half Year
year to 30
to 31 June
December 31 December 2016
2016 2015 (audited)
---------------------- ------ ---------- ------------- -----------
Total Total Total
Notes GBPm GBPm GBPm
---------------------- ------ ---------- ------------- -----------
Group revenue 3 1,235.3 1,182.3 2,494.9
Cost of sales (1,101.1) (1,063.4) (2,223.2)
Gross profit 134.2 118.9 271.7
Administrative
expenses (70.6) (69.2) (152.3) Profit on disposal of property, plant and equipment - - 5.2 Share of post tax profits from joint ventures 5.9 9.9 19.2 ---------------------- ------ ---------- ------------- ----------- Profit before finance costs 69.5 59.6 143.8 Profit from operations 3 74.7 65.9 157.5 Share of joint ventures' interest and tax (3.7) (4.2) (9.4) Amortisation of intangibles (1.5) (2.1) (4.3) ---------------------- ------ Profit before finance costs 69.5 59.6 143.8 ---------------------- ------ ---------- ------------- ----------- Finance income 4 1.8 1.7 7.6 Finance costs 4 (8.3) (8.4) (16.4) Profit before income tax 63.0 52.9 135.0 Income tax expense 5 (12.0) (10.1) (26.1) Profit for the period 51.0 42.8 108.9 ---------------------- ------ ---------- ------------- ----------- Earnings per share - Basic 6 61.9p 52.2p 132.5p - Diluted 6 61.3p 51.5p 131.3p ---------------------- ------ ---------- ------------- -----------
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 2016 (unaudited)
Year
to
Half year Half year 30 June
to to 2016
31 December 31 December
2016 2015 (audited)
-------------------------------- ------ ------------- ------------- -----------
Notes GBPm GBPm GBPm
-------------------------------- ------ ------------- ------------- -----------
Profit for the period 51.0 42.8 108.9
Other comprehensive
income/(expense):
Items that will not
be reclassified to profit
or loss
Actuarial (losses)/gains
recognised on retirement
benefit obligations 14 (9.7) 3.0 (11.9)
Deferred tax on items
recognised in equity
that will not be reclassified 1.7 (1.2) 1.0
Current tax through
equity - - 2.3
------------- ------------- -----------
Total items that will
not be reclassified
to profit or loss (8.0) 1.8 (8.6)
Items that may be reclassified
subsequently to profit
or loss
Movement in fair value
of derivative financial
instruments:
- Movement arising
during the financial
year 1.8 (0.9) (5.4)
- Reclassification
adjustments for amounts
included in profit or
loss (0.3) 0.2 1.2
Deferred tax on items
recognised in equity
that may be reclassified (0.3) - (1.0)
------------- ------------- -----------
Total items that may
be reclassified subsequently
to profit or loss 1.2 (0.7) (5.2)
Other comprehensive
(expense)/income for
the period net of tax (6.8) 1.1 (13.8)
-------------------------------- ------ ------------- ------------- -----------
Total comprehensive
income for the period 44.2 43.9 95.1
-------------------------------- ------ ------------- ------------- -----------
The notes are an integral part of the condensed consolidated half year financial statements.
Condensed consolidated balance sheet
at 31 December 2016 (unaudited)
31 December 31 December 30 June 2016
2016 2015
(Restated (audited)
- Note 2)
-------------------------------------------- ------ ------------ ------------ -------------
Notes GBPm GBPm GBPm
-------------------------------------------- ------ ------------ ------------ -------------
Assets
Non-current assets
Intangible assets 15.1 18.8 16.7
Goodwill 8 135.5 135.5 135.5
Property, plant
and equipment 22.1 23.8 19.1
Investments in
joint ventures 23.7 19.2 24.8
Financial assets
* Available for sale financial assets 15 24.2 11.3 16.9
Trade and other
receivables 10 73.7 35.6 75.8
Retirement benefit
asset 14 - 7.3 -
Deferred income
tax assets 3.1 1.8 2.2
-------------------------------------------- ------ ------------ ------------ -------------
Total non-current
assets 297.4 253.3 291.0
Current assets
Inventories 0.7 - 0.1
Developments 9 847.3 859.9 820.8
Trade and other
receivables 10 796.1 735.1 718.0
Cash and cash
equivalents 11 42.7 83.7 166.3
-------------------------------------------- ------ ------------ ------------ -------------
Total current
assets 1,686.8 1,678.7 1,705.2
-------------------------------------------- ------ ------------ ------------ -------------
Total assets 1,984.2 1,932.0 1,996.2
-------------------------------------------- ------ ------------ ------------ -------------
Liabilities
Current liabilities
Financial liabilities
* Borrowings 11 (0.2) (0.2) (0.3)
Trade and other
payables 12 (1,095.6) (997.2) (1,059.2)
Current income
tax liabilities (17.0) (11.7) (12.2)
Provisions (0.2) (0.4) (0.3)
-------------------------------------------- ------ ------------ ------------ -------------
Total current
liabilities (1,113.0) (1,009.5) (1,072.0)
-------------------------------------------- ------ ------------ ------------ -------------
Net current assets 573.8 669.2 633.2
-------------------------------------------- ------ ------------ ------------ -------------
Non-current liabilities
Financial liabilities
* Borrowings 11 (156.3) (179.2) (174.7)
* Derivatives financial liabilities 15 (3.0) (1.0) (4.5)
Retirement benefit
obligations 14 (10.6) - (4.3)
Other non-current
liabilities 13 (101.8) (170.5) (139.1)
Provisions (1.4) (1.8) (1.6)
-------------------------------------------- ------ ------------ ------------ -------------
Total non-current
liabilities (273.1) (352.5) (324.2)
-------------------------------------------- ------ ------------ ------------ -------------
Total liabilities (1,386.1) (1,362.0) (1,396.2)
-------------------------------------------- ------ ------------ ------------ -------------
Net assets 598.1 570.0 600.0
--------------------- ------ ------ ------
Equity
Ordinary shares 41.4 41.1 41.4
Share premium 194.4 191.8 194.4
Other reserves 4.8 4.8 4.8
Retained earnings 357.5 332.3 359.4
Total shareholders'
equity 598.1 570.0 600.0
--------------------- ------ ------ ------
The notes are an integral part of the condensed consolidated half year financial statements
Condensed consolidated statement of changes in equity
for the half year ended 31 December 2016 (unaudited)
Total
Ordinary Share Other Retained shareholders'
shares premium reserves earnings equity
GBPm GBPm GBPm GBPm GBPm
Notes
----------------------------- ------ --------- --------- ---------- ---------- ---------------
Half year ended 31 December
2016
At 1 July 2016 41.4 194.4 4.8 359.4 600.0
Profit for the period - - - 51.0 51.0
Other comprehensive
income/(expense) - - - (6.8) (6.8)
--------- --------- ---------- ---------- ---------------
Total comprehensive
income for the period - - - 44.2 44.2
Transactions with owners:
Dividends 7 - - - (46.4) (46.4)
Share-based payments - - - 2.0 2.0
Purchase of own shares - - - (1.7) (1.7)
At 31 December 2016 41.4 194.4 4.8 357.5 598.1
----------------------------- ------ --------- --------- ---------- ---------- ---------------
Half year ended 31 December
2015
At 1 July 2015 41.1 191.8 4.8 331.5 569.2
Profit for the period - - - 42.8 42.8
Other comprehensive
income/(expense) - - - 1.1 1.1
--------- --------- ---------- ---------- ---------------
Total comprehensive
income for the period - - - 43.9 43.9
Transactions with owners:
Dividends 7 - - - (37.9) (37.9)
Share-based payments - - - 1.4 1.4
Purchase of own shares - - - (6.6) (6.6)
At 31 December 2015 41.1 191.8 4.8 332.3 570.0
----------------------------- ------ --------- --------- ---------- ---------- ---------------
Year ended 30 June 2016
(audited)
At 1 July 2015 41.1 191.8 4.8 331.5 569.2
Profit for the period - - - 108.9 108.9
Other comprehensive
income/(expense) - - - (13.8) (13.8)
--------- --------- ---------- ---------- ---------------
Total comprehensive
income for the year - - - 95.1 95.1
Transactions with owners:
Dividends 7 - - - (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
----------------------------- ------ --------- --------- ---------- ---------- ---------------
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 2016 (unaudited)
Half Year Half Year
to to Year to
31 December 31 December 30 June
2016 2015 2016 (audited)
-------------------------------- ------ ------------- -------------- -----------------
Notes GBPm GBPm GBPm
-------------------------------- ------ ------------- -------------- -----------------
Cash flows from operating
activities
Continuing operations
Profit before finance
costs 69.5 59.6 143.8
Adjustments for:
Depreciation and amortisation 3.7 4.4 8.6
Profit on sale of property,
plant and equipment - - (5.2)
(Profit) on sale of available
for sale financial assets - - (0.5)
Share-based payments 2.0 1.4 4.0
Share of post tax profits
from joint ventures (5.9) (9.9) (19.2)
Movement on provisions (0.3) (0.1) (0.4)
Other non-cash movements 0.2 0.1 0.4
-------------------------------- ------ ------------- -------------- -----------------
Net cash generated from
operations before pension
deficit payments and
changes in working capital 69.2 55.5 131.5
Deficit funding payments
to pension schemes (3.6) (3.2) (6.6)
-------------------------------- ------ ------------- -------------- -----------------
Net cash generated from
operations before changes
in working capital 65.6 52.3 124.9
(Increase)/decrease in
inventories (0.6) 0.3 0.2
(Increase)/decrease in
developments (26.4) 17.5 (7.5)
(Increase) in trade and
other receivables (74.8) (30.9) (54.0)
Increase/(decrease) in
trade and other payables (2.3) (48.9) 46.1
-------------------------------- ------ ------------- -------------- -----------------
Net cash (used in)/generated
from operations (38.5) (9.7) 109.7
Interest received 4 1.8 1.7 7.6
Interest paid 4 (7.2) (6.8) (14.6)
Income tax paid (7.2) (12.9) (25.3)
-------------------------------- ------ ------------- -------------- -----------------
Net cash (used in)/generated
from operating activities (51.1) (27.7) 77.4
-------------------------------- ------ ------------- -------------- -----------------
Cash flows from investing
activities
Dividends received from
joint ventures 7.0 - 3.6
Acquisition of available
for sale financial assets (7.2) (1.2) (6.6)
Proceeds from available
for sale financial assets - 0.9 1.2
Purchase of intangible
assets - - (0.1)
Acquisition of property,
plant and equipment (5.1) (5.3) (7.8)
Proceeds from sale of
property, plant and equipment - - 10.4
-------------------------------- ------ ------------- -------------- -----------------
Net cash (used in)/generated
from investing activities (5.3) (5.6) 0.7
-------------------------------- ------ ------------- -------------- -----------------
Cash flows from financing
activities
Net proceeds from issue
of ordinary share capital - - 2.9
Purchase of own shares (1.7) (6.6) (11.9)
Repayment of borrowings (19.1) (3.4) (8.4)
Dividends paid to Company
shareholders (46.4) (37.9) (59.3)
-------------------------------- ------ ------------- -------------- -----------------
Net cash used in financing
activities (67.2) (47.9) (76.7)
-------------------------------- ------ ------------- -------------- -----------------
Net (decrease)/increase
in cash and cash equivalents (123.6) (81.2) 1.4
-------------------------------- ------ ------------- -------------- -----------------
Cash and cash equivalents
at beginning of period 166.3 164.9 164.9
-------------------------------- ------ ------------- -------------- -----------------
Cash and cash equivalents
at end of period 11 42.7 83.7 166.3
-------------------------------- ------ ------------- -------------- -----------------
Notes to the condensed consolidated half year financial statements
for the half year ended 31 December 2016 (unaudited)
1 Basis of preparation
The Company is a public limited company incorporated in England and Wales and domiciled in the UK. The address of its registered office is Cowley Business Park, Cowley, Uxbridge, Middlesex, UB8 2AL. The Company has its primary listing on the London Stock Exchange. This condensed consolidated half year financial information was approved for issue on 21 February 2017.
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 2016 were approved by the board of directors on 14 September 2016 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 2016 has been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and with IAS 34, "Interim financial reporting" as adopted by the European Union. The condensed consolidated half year financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2016, which have been prepared in accordance with IFRSs as adopted by the European Union.
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 2016 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.
The Group meets its day to day working capital requirements through its bank and other debt facilities. The Group's forecasts, taking into account the board's future expectations of the Group's performance, indicate that there is substantial headroom within the bank facilities and the Group will continue to operate within the covenants of those facilities.
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated half year financial information.
2 Accounting policies
Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2016, as described in those financial statements.
(i) Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected annual earnings.
(ii) Land inventory is recognised at the time a liability is recognised. As announced in the annual financial statements for the year ended 30 June 2016, 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 and a comparison of our sector peer group, the Group determined it is more appropriate to recognise land inventory on unconditional exchange of contract or once the acquisition has completed and the financial statements have been reported accordingly. The Group has restated its 31 December 2015 land inventory and development land payables figures accordingly, by GBP102m, but determined that the impact on previous period results and reserves was not material.
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, 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; Galliford Try Partnerships and Regeneration; Construction, including Building and Infrastructure; and PPP Investments.
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
Half year ended
31 December
2016
Construction
-----------------------
Partnerships
Linden & PPP Central
Homes Regeneration Building Infrastructure Total Investments Costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Group revenue
and share of
joint
ventures'
revenue 407.6 144.3 492.2 249.8 742.0 12.8 0.9 1,307.6
Share of joint
ventures'
revenue (53.0) (9.4) (0.5) - (0.5) (9.4) - (72.3)
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Group revenue 354.6 134.9 491.7 249.8 741.5 3.4 0.9 1,235.3
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Segment result:
Profit/(loss)
from
operations
before share
of joint
ventures'
profit 66.1 3.6 1.4 1.2 2.6 (0.2) (7.0) 65.1
Share of joint
ventures'
profit 8.2 1.3 0.1 - 0.1 - - 9.6
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Profit/(loss)
from
operations
* 74.3 4.9 1.5 1.2 2.7 (0.2) (7.0) 74.7
Share of joint
ventures'
interest
and tax (3.2) (0.4) - - - (0.1) - (3.7)
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Profit/(loss)
before finance
costs,
amortisation
and taxation 71.1 4.5 1.5 1.2 2.7 (0.3) (7.0) 71.0
Finance income 1.2 0.3 - 0.2 0.2 - 0.1 1.8
Finance costs (22.4) (1.2) (0.2) (0.1) (0.3) (0.4) 16.0 (8.3)
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Profit/(loss)
before
amortisation
and taxation 49.9 3.6 1.3 1.3 2.6 (0.7) 9.1 64.5
Amortisation
of intangibles (0.5) - (0.5) - (0.5) - (0.5) (1.5)
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Profit before
taxation 49.4 3.6 0.8 1.3 2.1 (0.7) 8.6 63.0
Income tax
expense (12.0)
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Profit for
the period 51.0
---------------- ------- ------------- ----------- --------------- ------ ------------ -------- --------
Half year ended
31 December 2015
Construction
--------------- -------------------------------
Linden Partnerships PPP Central
Homes & Regeneration Building Infrastructure Total Investments Costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Group revenue
and share of
joint
ventures'
revenue 362.7 150.2 517.8 220.8 738.6 12.9 0.5 1,264.9
Share of joint
ventures'
revenue (59.8) (7.4) (0.4) (5.2) (5.6) (9.8) - (82.6)
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Group revenue 302.9 142.8 517.4 215.6 733.0 3.1 0.5 1,182.3
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Segment
result:
Profit/(loss)
from
operations
before share
of joint
ventures'
profit 48.4 3.6 3.6 4.8 8.4 (1.7) (6.9) 51.8
Share of joint
ventures'
profit 13.1 0.9 0.1 - 0.1 - - 14.1
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Profit/(loss)
from
operations
* 61.5 4.5 3.7 4.8 8.5 (1.7) (6.9) 65.9
Share of joint
ventures'
interest
and tax (3.9) (0.3) - - - - - (4.2)
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Profit/(loss)
before
finance
costs,
amortisation
and taxation 57.6 4.2 3.7 4.8 8.5 (1.7) (6.9) 61.7
Finance income 1.2 0.2 - 0.1 0.1 - 0.2 1.7
Finance costs (23.2) - (0.1) - (0.1) (0.1) 15.0 (8.4)
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Profit/(loss)
before
amortisation
and taxation 35.6 4.4 3.6 4.9 8.5 (1.8) 8.3 55.0
Amortisation
of
intangibles (0.5) - (1.1) - (1.1) - (0.5) (2.1)
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Profit before
taxation 35.1 4.4 2.5 4.9 7.4 (1.8) 7.8 52.9
Income tax
expense (10.1)
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Profit for
the period 42.8
--------------- ------- ----------------- --------------- ----------------------- ------ ------------ -------- --------
Year ended 30 June
2016 (audited)
Construction
------------- -------------------------
Partnerships
Linden & PPP Central
Homes Regeneration Building Infrastructure Total Investments Costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
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
--------------- -------- ------------- --------- --------------- -------- ------------ -------- --------
* 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 arms length basis, is eliminated from Group revenue above. In the half year to 31 December 2016 this amounted to GBP46.9 million (31 December 2015: GBP46.5 million; 30 June 2016: GBP79.9 million) of which GBP18.4 million (31 December 2015: GBP24.2 million; 30 June 2016: GBP35.7 million) was in Building, GBP16.9 million (31 December 2015: GBP21.7 million; 30 June 2016: GBP42.9 million) was in Infrastructure, and GBP11.6 million (31 December 2015: GBP0.6 million; 30 June 2016: GBP1.3 million) was in central costs.
Half year ended
31 December 2016
Construction
--------- -------------------------
Partnerships
Linden & PPP Central
Homes Regeneration Building Infrastructure Total Investments Costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance Sheet
Goodwill and
intangible
assets 52.9 5.9 47.2 37.2 84.4 - 7.4 150.6
Working
capital
employed 681.9 55.8 (92.7) (10.4) (103.1) 21.6 (94.9) 561.3
Net
cash/(debt) (620.4) (26.9) 102.3 8.5 110.8 (14.5) 437.2 (113.8)
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
Net assets 114.4 34.8 56.8 35.3 92.1 7.1 349.7 598.1
Total Group
liabilities (1,386.1)
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
Total Group
assets 1,984.2
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
Half year ended
31 December 2015 Construction
------------------------------------
Partnerships
Linden & PPP Central
Homes Regeneration Building Infrastructure Total Investments Costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance Sheet
Goodwill and
intangible
assets 53.9 6.0 48.8 37.2 86.0 - 8.4 154.3
Working
capital
employed 666.2 23.6 (101.9) (53.6) (155.5) 11.6 (34.5) 511.4
Net
cash/(debt) (640.2) (2.6) 106.0 48.7 154.7 (4.1) 396.5 (95.7)
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
Net assets 79.9 27.0 52.9 32.3 85.2 7.5 370.4 570.0
Total Group
liabilities (1,362.0)
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
Total Group
assets 1,932.0
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
Year ended 30 June
2016 (audited) Construction
------------------------------------
Partnerships
Linden & PPP Central
Homes Regeneration Building Infrastructure Total Investments Costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance Sheet
Goodwill and
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) (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
-------------- -------- ------------- --------- --------------- -------- ------------ -------- ----------
4 Net finance costs
Year to
Half year Half year 30 June
to to 2016
31 December 31 December
2016 2015 (audited)
Group GBPm GBPm GBPm
---------------------------------- ------------- ------------- -----------
Interest receivable on bank
deposits - 0.1 0.1
Interest receivable from
joint ventures 1.7 1.5 7.0
Net finance income on retirement
benefit obligations - 0.1 0.2
Other 0.1 - 0.3
---------------------------------- ------------- ------------- -----------
Finance income 1.8 1.7 7.6
Interest payable on borrowings (7.8) (7.3) (15.5)
Unwind of discounted payables (0.5) (1.1) (0.8)
Other - - (0.1)
---------------------------------- ------------- ------------- -----------
Finance costs (8.3) (8.4) (16.4)
Net finance costs (6.5) (6.7) (8.8)
---------------------------------- ------------- ------------- -----------
5 Income tax expenses
The taxation expense on profit for the period of 19.0% (31 December 2015: 19.0%) reflects the estimated effective tax rate for the full financial year to 30 June 2017.
6 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.
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 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.
Half year to 31 Half year to 31 Year to 30 June
December 2016 December 2015 2016 (audited)
-------------------------------- -------------------------------- ----------------------------------
Weighted Per Weighted Per Weighted Per
average share average share average share
Earnings number amount Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence GBPm of shares pence
Basic EPS
Earnings
attributable
to ordinary
shareholders 51.0 82,416,735 61.9 42.8 81,931,402 52.2 108.9 82,166,065 132.5
Effect
of dilutive
securities:
Options 787,900 1,127,943 748,016
Diluted
EPS 51.0 83,204,635 61.3 42.8 83,059,345 51.5 108.9 82,914,081 131.3
-------------- --------- ----------- -------- --------- ----------- -------- --------- ------------- --------
7 Dividends
The following dividends were paid and recognised by the Company in each accounting period presented:
Half year to Half year to
31 December 31 December Year to 30
2016 2015 June 2016 (audited)
------------------ ------------------ -----------------------
pence pence pence
GBPm per share GBPm per share GBPm per share
--------------------- ----- ----------- ----- ----------- ------- --------------
Previous year
final 46.4 56.0 37.9 46.0 37.9 46.0
Current period
interim - - - - 21.4 26.0
Dividend recognised
in the year 46.4 56.0 37.9 46.0 59.3 72.0
--------------------- ----- ----------- ----- ----------- ------- --------------
The following dividends were declared by the Company in respect of each accounting period presented:
Half year to Half year to
31 December 31 December Year to 30
2016 2015 June 2016 (audited)
------------------ ------------------ -----------------------
pence pence pence
GBPm per share GBPm per share GBPm per share
------------------- ----- ----------- ----- ----------- ------- --------------
Interim 26.4 32.0 21.5 26.0 21.5 26.0
Final - - - - 46.4 56.0
Dividend relating
to the year 26.4 32.0 21.5 26.0 67.9 82.0
------------------- ----- ----------- ----- ----------- ------- --------------
The interim dividend for 2017 of 32.0 pence per share was approved by the board on 21 February 2017 and has not been included as a liability as at 31 December 2016. This interim dividend will be paid on 6 April 2017 to shareholders who are on the register at the close of business on 24 March 2017.
8 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 31 December 30 June 2016
2016 2015 (audited)
GBPm GBPm GBPm
------------ ------------ -------------
Linden Homes 52.5 52.5 52.5
Partnerships & Regeneration 5.8 5.8 5.8
Building 40.0 40.0 40.0
Infrastructure 37.2 37.2 37.2
135.5 135.5 135.5
----------------------------- ------------ ------------ -------------
As stated in the annual financial statements for the year ended 30 June 2016, 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 2016 which would give rise to an impairment and none have been identified.
9 Developments
31 December
2015
31 December (Restated 30 June 2016
2016 - Note 2) (audited)
GBPm GBPm GBPm
------------------ ------------ ------------ -------------
Land 553.6 606.5 538.7
Work in progress 293.7 253.4 282.1
847.3 859.9 820.8
------------------ ------------ ------------ -------------
10 Trade and other receivables
31 December 31 December 30 June
2016 2015 2016 (audited)
GBPm GBPm GBPm
---------------------------- ------------ ------------ ----------------
Amounts falling due
within one year:
Trade receivables 165.3 204.5 162.6
Less: Provision for
impairment of receivables (0.9) (0.4) (0.8)
---------------------------- ------------ ------------ ----------------
Trade receivables
- net 164.4 204.1 161.8
Amounts recoverable
on construction contracts 302.0 238.0 283.7
Amounts due from joint
venture undertakings 163.0 169.8 125.3
Other receivables 42.5 47.7 49.6
Prepayments and accrued
income 124.3 75.5 97.6
---------------------------- ------------ ------------ ----------------
796.2 735.1 718.0
---------------------------- ------------ ------------ ----------------
Amounts falling due
after more than one
year:
Amounts due from joint
venture undertakings 73.3 35.1 75.4
Other receivables 0.4 0.5 0.4
73.7 35.6 75.8
---------------------------- ------------ ------------ ----------------
11 Cash and cash equivalents
30 June
31 December 31 December 2016
2016 2015 (audited)
GBPm GBPm GBPm
------------------------------ ------------ ------------ -----------
Cash and cash equivalents
excluding bank overdrafts 42.7 83.7 166.3
Current borrowings (0.2) (0.2) (0.3)
Non-current borrowings (156.3) (179.2) (174.7)
Net (debt) (113.8) (95.7) (8.7)
------------------------------ ------------ ------------ -----------
In February 2014 the Group agreed a five-year GBP400 million unsecured revolving credit facility with HSBC Bank plc, Barclays Bank plc, The Royal Bank of Scotland plc and Abbey National Treasury Services plc (Santander). In February 2015, the Group agreed a one-year extension on the facility, to 2020. In March 2016 the Group agreed an increase in the facility to GBP450 million and in December 2016, the Group agreed a further two-year extension to February 2022. The facility provides long-term finance and bonding facilities and is subject to covenants over interest cover, gearing (adjusted to take account of development land payables) and minimum consolidated tangible net assets. Interest is calculated by aggregating margin, LIBOR and relevant costs.
In February 2017, the Group issued GBP100 million ten year unsecured notes purchased at a fixed rate of interest of 4.03% to investors advised by Pricoa Capital Group, expiring in February 2027. The agreement provides long-term finance at a fixed rate of interest and is subject to the same covenants as the revolving credit facility above.
12 Trade and other payables
31 December
30 June
2015 2016
(Restated
31 December - Note
2016 2) (audited)
GBPm GBPm GBPm
------------------------------ ------------ ------------ -----------
Payments received on account
on construction contracts 85.2 49.2 77.8
Trade payables 343.5 265.4 296.6
Development land payables 137.8 101.8 104.2
Amounts due to joint venture
undertakings 24.0 41.4 31.9
Other taxation and social
security payable 20.3 16.2 17.0
Other payables 19.8 19.8 7.0
Accruals and deferred income 465.0 503.4 524.7
1,095.6 997.2 1,059.2
------------------------------ ------------ ------------ -----------
13 Other non-current liabilities
31 December
30 June
2015 2016
(Restated
31 December - Note
2016 2) (audited)
GBPm GBPm GBPm
------------------------------ ------------ ------------ -----------
Development land payables 55.5 138.9 98.6
Other payables 0.5 0.5 0.6
Accruals and deferred income 45.8 31.1 39.9
101.8 170.5 139.1
------------------------------ ------------ ------------ -----------
14 Retirement benefit obligations
The amounts recognised in the balance sheet are as follows:
30 June
31 December 31 December 2016
2016 2015 (audited)
GBPm GBPm GBPm
--------------- --------------- ------------ ------------ -----------
Fair value of plan assets 246.0 218.6 231.4
Present value of defined
benefit obligations (256.6) (211.3) (235.7)
(Deficit)/surplus in scheme
recognised as non-current
(liability)/asset (10.6) 7.3 (4.3)
-------------------------------- ------------ ------------ -----------
The principal actuarial assumptions used to calculate the liabilities as at 31 December 2016 have been set in a consistent manner to those adopted at 30 June 2016. These assumptions will change as market conditions change over time.
An actuarial loss of GBP9.7 million (31 December 2015: gain of GBP3.0 million; 30 June 2016: loss of GBP11.9 million) has been taken to the condensed consolidated statement of comprehensive income.
15 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 2016.
There have been no significant changes in the risk management policies since the year end.
Financial liabilities - derivative financial liabilities
The fair value of interest rate swaps is detailed below:
31 December 31 December 30 June 2016
2016 2015 (audited)
GBPm GBPm GBPm
Non-current
liabilities 3.0 1.0 4.5
-------------- ------------ ------------ -------------
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 and liabilities that are measured at fair value:
31 December 31 December 30 June 2016
2016 2015 (audited)
---------------------- ---------------------- ----------------------
Level Level Level Level Total Level Level
2 3 Total 2 3 GBPm 2 3 Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Assets
Available-for-sale
financial assets
- Shared equity
receivables - 0.7 0.7 - 0.7 0.7 - 0.7 0.7
- Equity securities 23.5 - 23.5 10.6 - 10.6 16.2 - 16.2
Total 23.5 0.7 24.2 10.6 0.7 11.3 16.2 0.7 16.9
---------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Liabilities
Derivatives
used for hedging (3.0) - (3.0) (1.0) - (1.0) (4.5) - (4.5)
Total (3.0) - (3.0) (1.0) - (1.0) (4.5) - (4.5)
---------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
There were no transfers between levels during the period. The valuation techniques used to derive Level 2 fair values are consistent with those set out in the 30 June 2016 financial statements. Level 3 fair values are determined using valuation techniques that include inputs not based on observable market data.
Fair value measurements using significant unobservable inputs (Level 3)
31 December 31 December 30 June 2016
2016 (GBPm) 2015 (GBPm) (audited) (GBPm)
-------------------------- ------------- ------------------
Opening balance 0.7 0.8 0.8
Unwind of discount
on shared equity
receivables - - -
Impairment - - -
Disposals - (0.1) (0.1)
Closing balance 0.7 0.7 0.7
--------------------- ---- ------------- ------------------
The valuation process for Level 3 is consistent with that disclosed in the 30 June 2016 audited report.
The key assumptions used in Level 3 valuations include future house price movements, 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. The discount rate of 5.5% and future house price movements used to compute the fair value (typically 2.5%) are based on local market conditions. If receipts were to occur earlier than expected, the fair value would increase.
The total impact in the period of Level 3, taken to the income statement, is GBPNil (31 December 2015: GBPNil; 30 June 2016: GBPNil) in cost of sales and GBPNil (31 December 2015: GBPNil; 30 June 2016: GBPNil) in finance income.
16 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 GBP353.6 million (31 December 2015: GBP306.2 million; 30 June 2016 GBP313.8 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.
17 Related parties
Transactions between the Group and its joint ventures and jointly controlled operations are disclosed as follows:
Group
Amounts owed Amounts owed
Sales to Purchases from by to
related parties related parties related parties related parties
--------------------------- ---------------------------
30 30 30 30
Jun Jun Jun Jun
31 31 31 31 31 31 31 31
Dec Dec 2016 Dec Dec 2016 Dec Dec 2016 Dec Dec 2016
2016 2015 (audited) 2016 2015 (audited) 2016 2015 (audited) 2016 2015 (audited)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Trading
transactions
Joint
ventures 21.7 26.1 28.7 0.1 - 0.4 21.2 13.4 23.7 12.3 12.7 15.5
Jointly
controlled
operations 21.1 12.2 60.1 0.1 0.2 0.8 3.9 2.5 3.2 11.7 28.7 16.4
-------------- ------ ------ ----------- ------ ------ ----------- ------ ------ ----------- ------ ------ -----------
Interest and
dividend income
from related Loans to related
parties parties
--------------------------- ---------------------------
30 30
Jun Jun
31 31 31 31
Dec Dec 2016 Dec Dec 2016
2016 2015 (audited) 2016 2015 (audited)
GBPm GBPm GBPm GBPm GBPm GBPm
Non-trading
transactions
Joint ventures 8.8 1.5 10.6 207.7 188.8 173.8
---------------- ------ ------ ----------- ------ ------ -----------
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 the same as those outlined on pages 20 and 21 of the Group's annual report and financial statements for the year ended 30 June 2016. These can be summarised as health, safety, environmental and community; people; supply chain; macro environment; markets; and corporate.
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.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
The directors confirm that these condensed consolidated half year financial statements have been prepared in accordance with IAS 34 as adopted by the European Union; 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 plc are:
Peter Ventress Non-Executive
Chairman
Peter Truscott Chief Executive
Graham Prothero Finance Director
Terry Miller Senior Independent
Director
Andrew Jenner Non executive
director
Ishbel Macpherson Non executive
director
Gavin Slark Non executive
director
Signed on behalf of the Board
Peter Truscott
Chief Executive
Graham Prothero
Finance Director
21 February 2017
Independent review report to Galliford Try Plc
Report on the condensed consolidated half year financial statements
Our conclusion
We have reviewed Galliford Try Plc's condensed consolidated half year financial statements (the "interim financial statements") in the half year report of Galliford Try Plc for the 6 month period ended 31 December 2016. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
the condensed consolidated balance sheet as at 31 December 2016;
the condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;
the condensed consolidated statement of cash flows for the period then ended;
the condensed consolidated statement of changes in equity for the period then ended; and
the explanatory notes to the interim financial statements.
The interim financial statements included in the half year report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half year report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half year report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the half year report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. 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 Ireland) 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.
We have read the other information contained in the half year report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
21 February 2017
a) The maintenance and integrity of the Galliford Try Plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEMFWSFWSESE
(END) Dow Jones Newswires
February 21, 2017 02:00 ET (07:00 GMT)
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