1,388.50p +25.50p (+1.87%)

Galliford Try hikes divi after strong underlying performance

Galliford Try's revenues - including joint ventures - rose by 6% to £2,820m in the year ended 30 June following a strong underlying performance.

Group revenues of £2,662m rose by 7%.

Pre-tax profits were down 57% at £58.7m but pre-exceptional profit before tax rose buy 9% to £147.6m.

The group has declared a final dividend of 96.0p per share - up 17%.

Chief executive Peter Truscott said: "I am pleased to announce strong operating progress in the financial year, which has been supported by robust market conditions.

"While the one-off costs relating to legacy contracts in Construction have impacted the reported financial performance, we remain confident in the prospects for the business, with the underlying portfolio of newer contracts performing well, and simplified and strengthened processes proving effective.

"Reflecting our strong underlying performance we are proposing an increase in our full year dividend of 17% to 96.0 pence per share.

"Entering the new financial year, we remain cautious about the impact of the current political uncertainty and the medium-term outlook for the macro economy.

"However, all three businesses have clearly defined plans as part of our 2021 strategy, providing the Group with confidence in its ability to deliver a strong performance even in a period of lower growth in the wider economy.

Highlights
Financial 2017 2016 Change
* Revenue(1) (including joint ventures) GBP2,820m GBP2,670m 6%

* Group revenue(1) GBP2,662m GBP2,495m 7%

* Profit before tax GBP58.7m GBP135.0m (57)%

* Pre-exceptional profit before tax(2,3) GBP147.6m GBP135.0m 9%

* Earnings per share 59.1p 132.5p (55)%

* Pre-exceptional earnings per share(2,3) 145.8p 132.5p 10%

* Full year dividend per share 96.0p 82.0p 17%
GBP7.2m GBP(8.7)m GBP15.9m
* Net cash/(debt)
(12.9)
* Group return on net assets(4) 14.0% 26.9% pts

* Pre-exceptional Group return on net assets(5) 27.5% 26.9% 0.6 pts

That is a sorry looking chart.



LATEST BROKER VIEWS
Date Broker New target Recomm.
14 Feb Peel Hunt 1,620.00 Buy
14 Feb Liberum Capital 1,550.00 Buy
9 Feb Liberum Capital 1,550.00 Buy
5 Feb Barclays... 1,184.00 Equal weight
18 Jan Liberum Capital 1,550.00 Buy
16 Jan Liberum Capital 1,550.00 Buy
15 Jan Liberum Capital 1,550.00 Buy
8 Jan Peel Hunt 1,620.00 Buy
5 Jan Peel Hunt 1,620.00 Buy
3 Jan Liberum Capital 1,550.00 Buy

Presumably some of the decline is due to CLLN fallout?
A few of their previous RNS have included the phrase "we remain cautious.....", so they were presumably expecting the odd bit of bad news in the industry.

Just seen the latest RNS:

StockMarketWire.com
Galliford Try first half pre-tax profit fell 11% to £56.3m from £63.0 in the prior year period as the company announced plans for a £150m capital raise to ease the £25m hit resulting from the liquidation of Carillion.

Group revenue for the half year to 31 December 2017 was £1,403m (H1 2017: £1,235m). Revenue, including share of joint ventures, was £1,495m (H1 2017: £1,308m).

The company reported net debt of £84.9 million, down £28.9m from the prior year period. Average debt over the period was lower than expected at £203m, with deferred outflows on land acquisitions in Linden Homes and partnerships outweighing some delayed inflows in construction.

The company said its construction business continued to benefit from a strong order book, with an encouraging pipeline of opportunities from the current and planned investment in the nation's infrastructure.

The company declared an interim dividend of 28.0p per share, down 13% from the prior year's 32.0p.

Decline due raising of £150m capital.

Curiously they don't call it a rights issue

Actually I haven't read any of the detail as I'm not invested in this stock and today has been rather busy.

But, I don't understand.

If the impact of CLLN is a £25m exceptional item why do they need £150m?

especially since if they are turning a profit of say £110m which would produce loads of EBITBA.

I don't get it. Perhaps the market doesn't either.

Maybe they see this as an opportunity to get bigger once the CLLN dust is sucked-up and binned for good. The chances are that a good firm can bid for some of this work that many others will be reluctant to attempt..... dunno, but I read in IC the £150m is already underwritten, so it's not a Rights Issue - shareholders won't be invited and won't receive favourable Terms ( who said that?). That they can ask for so much "probably" means their backers believe this could "be the start of something good..."
GFRD has seen this fall-out as an opportunity.... and whilst losing £25m is deplorable - they were ( presumably) unaware things were so bad with a "Trusted partner" - until the TP fell off a cliff.

CC You aren't a holder?.... but might you join-in when the (stock) price is right? The GFRD Div isn't like generous now and could be cut further.... I think ( DYOR ), its half-year is ~3.0% at sp = 880p....
Cheers.

Ok, I think I understand why they have asked for £150m. In their previous accounts they had a provision of £85m mostly against the Aberdeen bypass, so with the £25m that comes to £110m.

When they made the provision, they wouldn't have spent the cash at that point as the work was still left to do.

Once the dust settles, margins should improve in the whole industry as CLLN were always the lowest bidder keeping prices down.


I'm more interested in the sector Hangon than GFRD. I'm already very overweight in this sector through CTO and NMD so I can't really take any more.

I shall wait anyway until the £150m placing has gone through. Someone is going to get stock at a cheap price. I'm not impressed it's not a rights issue. Doesn't seem fair to shareholders.

Thanks CC - whilst not getting stock cheaply is a swiz, -it's now almost half the price of March 2017.... maybe you could think of that as a bargain, even if the Inner Circle is getting a better-deal..... You could wait for the Truth-to-Out and hope the sp is matched, as the greedy-boys sell-off whatever then can, creating a Stock-depression? I read that you are waiting until then, so I guess that's what I'd do, if it was one of mine. Good Luck.
On another subject: that By-Pass . . . will be well-used one hopes after so much agro.
It amazes me that firms are willing to Dance-with-Nature when it comes to anything like Construction.... when it is only as it's approached that anyone can know what's there. Even then, it may not remain so - and could change long after the Men+Plant are removed..... but their liability remains.

StockMarketWire.com
Housebuilder Galliford Try reported Wednesday full-year profits more than doubled, and the company said it was on track to achieve its strategic targets.

For the 12 months to 30 June, pre-tax profit rose 145% to £143.7m, and revenue rose 11% to £3.13bn.

Pre-exceptional profit from operations, which excludes finance costs, tax and Galliford's share of joint ventures' interest and tax, rose 24% to £213.1m.

Performance was held back by an exceptional charge of £45m in the second half of the year, relating to the additional costs on the Aberdeen (AWPR) joint venture after Carillion went bust in January.

Total completions by Linden Homes and Partnerships & Regeneration increased to 6193 units from 5,490 seen last year. Sales order books in Linden Homes and Partnerships & Regeneration stood at £698m.

The construction division entered the new financial year with an order book of £3.3bn, and revenue of £1.69bn, up from £1.53bn last year.

The company said it was on track to achieve its strategic targets for 2021.

The full-year dividend payment was 77.0p, down 10% from 86p a share, owing to a rights issues and a higher dividend cover.

'We have delivered a very strong underlying performance during the year, driven by excellent progress towards our strategic objectives across all three businesses,' said Peter Truscott, Chief Executive.

'Linden Homes continued to prioritise margin growth, benefiting from further standardisation and the robust control of overheads.'

'Partnerships & Regeneration achieved strong growth in both revenue and margin, with excellent contributions from the new businesses in Southampton, Bristol and East Midlands.'

'The underlying Construction business performed well and continues to see a pipeline of suitable opportunities, with new projects delivering improved margins.'

'The rights issue in April has strengthened the balance sheet and ensures that the Group's businesses are well positioned, with the appropriate capital, to deliver on their respective growth opportunities in line with our Strategy to 2021.'