Galliford Try Holdings PLC (LSE:GFRD) has hiked its dividend by 70%, announced a £15mln share buy-back, and gave a confident outlook after a year where profits grew more than expected.
The construction group, which focuses on the education, health and water sectors as well as highways, reported a £19.1mln profit before tax and exceptional costs for the year to end-June 2022, which was up 68% on the prior year and well ahead of the City consensus forecast of £17.7mln.
With revenues inching up to £1.24bn from £1.13bn, its divisional operating margin was lifted to 2.4% from 2.0%, on the way to the 3.0% target by 2026. Average net cash increased to £174mln from £164mln.
With directors confident about the outlook, given a “high quality” £3.4bn order book and 90% of revenue for the new financial year already secured, the final dividend was raised by 66% to 5.8p. Together with the interim dividend of 2.2p, this gave a total dividend of 8.0p for the year, up from 4.7p a year ago.
In recognition of the UK’s cost of living crisis, the board also approved a “one-off payment” totaling £1mln for this autumn for over 1,800 employees.
“We continue to see good demand across our core markets and anticipate continued progress in the new financial year, in line with our targets,” the company said in the results statement.
“Through our active engagement with our supply chain and disciplined approach to risk management, bidding and careful project management we have successfully managed and mitigated the challenges of supply shortages and inflation without any overall impact on trading or margin.”
Galliford Try chief executive Bill Hocking also highlighted the progress made to the sustainable growth strategy he and finance director Andrew Duxbury launched a year ago.
He said the significant increase in shareholder dividends and capital returns was a result of the new commitment to “robust risk management, careful contract selection and operational excellence”, which has left it “well capitalised and [with] a strong and selective order book”.