Galliford Try has reported a strong first half performance with profit before tax up 19% to £63 million, EPS up 19% to 61.9p and interim dividend up 23% to 32.0p reflecting confidence in the full year outlook.
In the group’s construction division, revenue was up slightly at £742 million (H1 2016: £738.6 million), with a cash balance of £110.8 million (H1 2016: £154.7 million) reflecting delayed cash flows on some legacy projects.
Thre firm said operating margin at 0.4% (H1 2016: 1.2%) continues to be constrained by the resolution of legacy contract, with margins on new projects set to support improving divisional returns in future years.
Galliford Try described its order book as solid at £3.4 billion (H1 2016: £3.7 billion), as the business continues its disciplined approach to contract selection.
2021 financial targets include revenue of £1.8 billion, operating margin of at least 2% and net cash of £200 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.”
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