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Galliford Try tops expectations as margins continue to improve

Published: 07:50 16 Sep 2021 BST

Galliford Try Holdings PLC -

Galliford Try Holdings PLC (LSE:GFRD, FRA:3WC) said profit before tax beat expectations and trading in the current year is 'solid'.

Profit before tax clocked in at £11.4mln, compared to a loss of £59.7mln before exceptionals the year before. This compared with analysts' estimates of between £9.0mln to £11.2mln (based on forecasts at 1 July 2021).

Revenue rose to £1,125mln from £1,090mln the previous year and the order book improved to £3.3bn from £3.2bn a year earlier.

The group’s divisional operating margin was ahead of expectations at 2.0%. The Building division generated a profit of £15.9mln compared with a pre-exceptional items loss of £51.8mln previously. This represents a margin of 2.0% while Infrastructure generated a profit of £6.0mln (pre-exceptional loss of £1.8mln previously), representing a margin of 0.8%.

Net cash at the end of June stood at £216.2mln, up from £197.2mln 12 months earlier, paving the way for a full-year dividend of 4.7p. The housebuilding and infrastructure specialist did not pay a dividend last year but resumed dividend payments at the interim stage this year.

The board’s policy is to increase the dividend in line with earnings, with dividend cover (earnings per share divided by dividend per share) expected to be in the range of 2.0 – 2.5 times earnings henceforth.

As for current trading, the new financial year has got off to a solid start with trading in line with the board's expectations, while margins continue to improve.

“Our disciplined approach to bidding and active engagement with our supply chain have proved particularly important during the recent period of materials shortages and inflation. Through our careful project management we have successfully managed and mitigated these challenges without any material impact on trading or margin,” the company said.

Bill Hocking, Galliford Try’s chief executive, said the company has dealt with challenging circumstances and continues to successfully manage the current market conditions.

“Our commitment to robust risk management, careful contract selection and operational excellence underpins our performance and prospects. The group has an excellent order book and balance sheet. We are strongly positioned to meet the increasing demand for social and economic infrastructure in the UK and deliver growth,” Hocking said.

“Our secure foundation provides the basis for our Sustainable Growth Strategy, which aligns our financial objectives with our sustainability aspirations to deliver sustainable profitable growth.

“The outlook is positive for the sector and the management team and board look forward to the new financial year with confidence,” he added.

The group published new financial targets stretching forward to 2026. Galliford Try is targeting a 3.0% margin across its Building and Infrastructure divisions, with a focus on bottom-line growth, while the top-line target is £1.6bn.

Alongside its financial targets, the board updated the company’s ambitions across each of its “six sustainability pillars”. In respect of climate change, it is committed to achieving net-zero carbon across the group's own operations by 2030 and across all activities by 2045, supported by Science Based Targets and its involvement with the Construction Leadership Council's C02nstructZero.

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