Galliford Try Plc - Trading Statement
Galliford Try plc, the housebuilding, regeneration and construction group, today provides the following update on trading for the year ended 30 June 2019. All data is as at 30 June 2019, unless otherwise stated, and all comparatives relate to the prior year equivalent period. The Group expects to announce its results for the full year on 11 September 2019.
· The Group continues to trade well and expects to report full year profit before tax in line with the current range of analysts' expectations1.
· Full year result to include £40m of previously reported exceptional items2.
· Linden Homes has maintained its sales rate and strong margin and continues to improve its customer satisfaction.
· Partnerships & Regeneration continues to achieve strong growth ahead of targets, increasing both revenues and margins, and successfully completing the acquisition of the Strategic Team Group in Yorkshire.
· The strategic review of Construction is now complete, and underlying operations are performing well.
· Net debt at 30 June 2019 of £60m (2018: net cash £98m) with average net debt of £187m, in line with previous guidance for the full year.
Linden Homes has maintained its good performance and strong margin and remains a four-star housebuilder.
The sales rate for the year ended 30 June 2019 was 0.56 per site per week from an average of 80 outlets (2018: 0.59 and 85). Linden Homes delivered 3,229 unit completions, including units in joint ventures (2018: 3,442 units), at an average private selling price of £351,000 (2018: £367,000), continuing to reflect our refocus on mid-range family houses in The Linden Collection and reduced exposure in central London. We have a strong carried forward position of 2,564 year end units (2018: 2,326) representing a value of £375m (2018: £366m). Linden Homes' landbank increased to 11,900 plots (2018: 11,400 plots), with all plots secured for the new financial year and 85% of plots secured for FY2021.
Partnerships & Regeneration
Partnerships & Regeneration made further excellent progress against its strategy of increasing geographic coverage and growing margins. At 30 June 2019 the business has a £1.0bn contracting order book (2018: £1.2bn) and mixed-tenure sales carried forward of £184m (2018: £160m). The landbank has increased by 61% to 5,300 plots (2018: 3,300 plots).
On 1 July 2019 we were delighted to complete the acquisition of Strategic Team Group (STG), giving us a mature operating platform in Yorkshire and expanding our presence in Cheshire. STG is a well-established regional business with 120 employees and a revenue in its last full year of circa £60m.
The restructure of our Construction business is complete, and the business is refocused to deliver an improved future performance. The result for the year includes contract write-downs and restructuring costs previously announced2.
The Aberdeen Western Peripheral Route is complete and delivering economic benefits to the region and receiving a positive reaction from all stakeholders. The joint venture continues to negotiate on the significant claim with the client, while preparing to pursue this through formal dispute resolution should these talks not reach a satisfactory conclusion.
The current order book is £2.9bn (2018: £3.3bn) with 88% of revenue for the new financial year secured (2018: 87%).
Graham Prothero, Chief Executive, commented:
"The Group has continued to perform well, supported by good housing demand. We expect our full year results and average net debt to be in line with previous guidance.
We are making strong progress against the operational targets we set out in 2017. We are reviewing our 2021 volume targets to ensure that growth is controlled, and our gearing is managed. Despite the weaker economic outlook, Linden Homes continues to see robust demand, with operating efficiencies driving strong margins and improving customer satisfaction. Partnerships & Regeneration is well on track with its aspirations for exciting growth in both revenue and margins, with some key wins in the period and further good opportunities across the market. We are pleased that the restructure of the Construction business is now complete. The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively. I look forward to the next financial year with the appropriate strategic priorities in place across the Group."