TIDMGFRD
RNS Number : 9793M
Galliford Try Holdings PLC
20 September 2023
07:00 AM WEDNESDAY 20 SEPTEMBER 2023
GALLIFORD TRY HOLDINGS PLC
ANNUAL RESULTS STATEMENT FOR THE YEARED 30 JUNE 2023
Continued Earnings Momentum, Delivering Shareholder Value
and Improved Outlook
* Strong performance across all operations delivering
increased revenue and profit.
* Pre-exceptional profit before tax increased by 23% to
GBP23.4m (2022: GBP19.1m) excluding the GBP2.8m
contract settlement write-off previously
announced.(1,2)
* Divisional operating margin of 2.4% (2022: 2.4%),
with increased confidence in our target margin of 3%
by 2026.(3)
* Improved annual dividend policy of 1.8x cover to
recognise the value of the PPP assets.
* Final dividend payment of 7.5p up 29% (2022: 5.8p),
together with an interim dividend of 3.0p giving a
total dividend for the financial year of 10.5p, up
31%.
* Special dividend to shareholders of 12.0p per share,
as previously announced following resolution of a
long running dispute, to be paid in October 2023.
* Share buyback returned a further GBP10.6m to
shareholders during the year and is now over 90%
complete.
* Well-capitalised debt-free balance sheet , average
month end cash for the period of GBP135m (2022:
GBP174m), PPP asset portfolio of GBP44.6m (2022:
GBP47.5m) and no pension liabilities.
* Improved outlook with high quality GBP3.7bn order
book (2022: GBP3.4bn) positioned across our chosen
sectors and 92% of FY24 revenue already secured .
* Increased confidence in FY24 outlook , with
pre-exceptional profit before tax expected to be at
the upper end of the current range of analyst
estimates (4) .
* On track to deliver FY26 targets and our Sustainable
Growth Strategy.
2023 2022 Change
Revenue GBP1,394m GBP1,237m +12.6%
Operating profit before amortisation (1,2) GBP21.9m GBP18.5m +18.4%
Divisional operating margin (3) 2.4% 2.4% -
Pre-exceptional profit before tax excluding contract
settlement write off (1,2) GBP23.4m GBP19.1m +22.5%
Statutory profit before tax GBP10.1m GBP5.4m +87.0%
Pre-exceptional earnings per share (1,2) 18.9p 16.0p +18.1%
Statutory earnings per share 8.7p 5.8p +50.0%
Full year dividend per share 10.5p 8.0p +31.3%
Average month-end cash GBP135m GBP174m (22.4)%
Order book GBP3.7bn GBP3.4bn +8.8%
1 Stated before exceptional items. Exceptional items relate to
our investment in cloud-based computer software and, in 2022, the
acquisition of nmcn.
2 FY23 is stated excluding the effect of the contract settlement
announced on 8 June 2023. The equivalent balances would be
pre-exceptional operating profit before amortisation of GBP19.1m;
pre-exceptional profit before tax of GBP20.6m; and pre-exceptional
earnings per share of 16.6p if stated including the effect of the
contract settlement.
3 Divisional operating margin is defined as operating profit
before amortisation as a percentage of revenue, and in FY23
excludes the effect of the contract settlement on 8 June 2023. It
is stated for the combined Building and Infrastructure
divisions.
4 The range of analysts' estimates for pre-exceptional profit
before tax for the year ending 30 June 2024 is GBP24.0m to GBP28.0m
based on forecasts at 13 September 2023.
Bill Hocking, Chief Executive, commented:
"Galliford Try continues to perform strongly and we are making
good progress on our Sustainable Growth Strategy, of risk managed
controlled growth - supporting our financial and non-financial
targets to 2026.
Our commitment to robust risk management, careful contract
selection and operational excellence continues to underpin our
performance and prospects. We are doing what we said we would do,
consistently delivering increased revenue and profit, supported by
our great people, a strong balance sheet, excellent order book and
good supply chain and client relationships.
Our high quality order book provides visibility and security of
future workloads. Our business is not exposed to the short term
economic cycle as our sectors are critical to the UK's future
growth. Together with our excellent people and our strong balance
sheet, this gives confidence in our ability to deliver our
Sustainable Growth Strategy to 2026 and beyond and continue to
provide long-term sustainable value for our stakeholders.
We are encouraged that the momentum in the business has carried
into the first quarter of the new financial year and our
expectations for the full year to June 2024 have now increased"
Enquiries:
Bill Hocking, Chief Executive
Andrew Duxbury, Finance
Galliford Try Director 01895 855001
Teneo James Macey White 020 7353 4200
This announcement contains inside information. The person
responsible for making this announcement on behalf of Galliford Try
is Kevin Corbett, General Counsel & Company Secretary.
Investor presentations
A webcast presentation and conference call for Analysts and
Investors will be held at 09:30am BST today, Wednesday 20 September
2023. To register for this event please follow this link:
https://brrmedia.news/GFRD_FY23
Should you wish to ask a question, please dial-in on +44 (03)330
551 quoting 'Galliford Try Full Year' when prompted by an operator,
it will not be possible to submit a question via the webcast
link.
An open presentation and Q&A session for retail investors
will be held on 26 September 2023 at 2:00pm BST via the Investor
Meet Company platform. Investors can register for the event via
this link:
https://www.investormeetcompany.com/galliford-try-holdings-plc/register-investor
SUSTAINABLE GROWTH STRATEGY
Our strategy is to deliver high-quality buildings and
infrastructure in a socially responsible way, while providing a
sustainable return for our shareholders. The Group's strategic
priorities are a progressive culture, socially responsible
delivery, focus on quality and innovation, and sustainable
financial returns.
Our Sustainable Growth Strategy balances financial targets with
wider commitments and aspirations to create long term value for all
our stakeholders. We are making good progress against our financial
targets to 2026 with opportunities for further growth beyond
then:
Objective KPI Target (2026)
--------------------- -------------------------- -------------------------------
Earning a sustainable Focus on bottom line Divisional operating margin
return on the value margin growth growth to 3.0%
we deliver.
--------------------- -------------------------- -------------------------------
Disciplined contract Revenue growth towards GBP1.6bn
selection and sustainable
revenue growth
--------------------- -------------------------- -------------------------------
Maintain strong balance Operating cash generation
sheet
-------------------------- -------------------------------
Sustainable dividends Improved dividend cover
of 1.8x
--------------------- -------------------------- -------------------------------
Our strategy is designed to:
- retain our strong platform for sustainable growth, with a
particular focus on our progressive culture, robust risk management
and commercial discipline;
- improve our operational performance and drive margin progression; and
- deliver strong predictable cash flows, margin growth and sustainable returns.
Our financial targets will be achieved by continued selective
bidding, improving operating margins and disciplined revenue growth
in our existing markets of Infrastructure (formally our Highways
business), Environment and Building. We will target further growth
in complementary and adjacent markets, utilising our balance sheet
strength to deliver increased margins. These adjacent markets, in
which we are making good progress, include co-development of
Private Rented Sector (PRS) schemes in Building; developing our
green retrofit offering within our Facilities Management team; and
increasing our capital maintenance and asset optimisation
capabilities within our Environment business. In August 2023 the
Group achieved completion on its first PRS co-development
scheme.
Risk management and order book
The Group's established approach to strong risk management,
commercial discipline and contract selection is one of the key
enablers to delivering our Sustainable Growth Strategy. Our
embedded culture of risk awareness has been particularly important
to enable the business to mitigate the macroeconomic challenges of
the last financial year, such as high inflation. This approach is
reflected in the quality of our order book.
At 30 June 2023, the Group had a high-quality order book of
GBP3.7bn (2022: GBP3.4bn), of which 87% is in the public and
regulated sectors and 13% is in the private sector (2022: 91% and
9% respectively).
Frameworks, which provide good visibility of future revenue,
amount to 82% of our order book (2022: 90%). Importantly,
frameworks provide the certainty of a pipeline of work with repeat
clients on established terms and conditions.
During the year ended 30 June 2023, Building and Infrastructure
were appointed to contracts and frameworks worth over GBP999m and
GBP659m including:
- the GBP5.1bn Defence Estate Optimisation Portfolio.
- the GBP4.5bn Southern Construction Framework.
- the GBP2.5bn Ministry of Justice Constructor Services Framework.
- the GBP600m Southern Water AMP8 Framework.
- the GBP140m Carlisle Southern Link Road.
- the GBP95m new custodial facility at HMP Rye Hill.
- the GBP81m Melton Mowbray Distributor Road.
- the GBP75m Brent Cross Residential Project and
- the GBP72m remodelling and refurbishment of Adelaide House, London.
The Group started the new financial year with 92% of planned
revenue secured for the 2024 financial year (2022: 90%).
Dividends and capital allocation
Having reviewed the Group's results and the outlook, the
Directors are recommending a final dividend of 7.5 pence per share
which, subject to approval will be paid on 8 December 2023 to
shareholders on the register at 10 November 2023. Together with the
interim dividend of 3.0 pence per share paid in April, this will
result in a total full year dividend for 2023 of 10.5 pence per
share.
In addition the Board has previously declared a Special Dividend
of 12 pence per share. The Special Dividend will be paid on 27
October 2023 to shareholders on the register as at 6 October
2023.
The Group's capital allocation priorities are:
-- Strong balance sheet to support operations
A strong balance sheet is an important element in delivering the
Group's Sustainable Growth Strategy, as it provides a competitive
advantage in the market, supports the Group's disciplined approach,
and provides confidence to our clients and supply chain. The
current outlook across our markets remains encouraging and supports
our strategy. However the Group also ensures that it is prepared
for any adverse change in market conditions that may arise. Our
strong balance sheet is particularly important for the Group to
continue to operate its disciplined approach to contract selection
and focus on operating margin, irrespective of any short term
economic concerns. The inflationary pressures of the last year,
clearly demonstrate the value and importance of the Group's risk
management framework and focus.
-- Invest in the business
We are able to allocate capital to assist the development of our
adjacent markets, as demonstrated by our acquisitions during the
year of the water businesses of MCS Control Systems and Ham Baker.
Our strong cash balance sheet enables the Group to react quickly to
strategic opportunities, including bolt-on acquisitions that
enhance our capabilities and increase value, and to continue to
invest in enablers of growth such as digital capabilities.
-- Paying sustainable dividends to shareholders
The Board understands the importance of dividends to
shareholders, and in setting its dividend considers the Group's
profitability, its strong balance sheet, high-quality order book
and longer term prospects. Consistent with this approach the Group
expects dividend per share to increase in line with earnings as the
business grows.
The Board's confidence in the outlook has led to an improved
dividend policy, of earnings covering the dividend by 1.8 times.
Alongside dividend growth from our operational performance, this
improvement reflects the low-risk nature of the PPP asset portfolio
and its annuity interest income, and provides a sustainable
increase in dividend to shareholders while retaining capital to
invest in growing the business.
-- Returning excess cash
We continue to assess the cash requirements of the business to
ensure the Group remains well positioned to deliver on its
Sustainable Growth Strategy and has sufficient funds to invest in
the business. As previously announced, where average month-end cash
and PPP assets increase above the level required, the Board will
consider making additional returns to shareholders.
In line with this approach in June 2023 the Board declared a
Special Dividend to be paid in October 2023, and in September 2022
the Group announced an initial share buyback programme to
repurchase up to GBP15m of ordinary shares of 50 pence per share.
The Board is satisfied with the progress of this buyback programme,
with a total of 7,985,696 shares purchased and cancelled as at 15
September 2023, at a total cost of GBP14.1m.
CURRENT TRADING AND OUTLOOK
The Group has delivered another strong operational and financial
performance in the year to 30 June 2023 with increased revenue and
profit.
Our businesses are performing well and we are doing what we said
we would do, consistently delivering increased dividends and
revenue growth, supported by a strong balance sheet, excellent
order book and good supply chain and client relationships. We will
continue our disciplined approach to risk management and careful
contract selection whilst operating sustainably .
The Group's order book underpins our future plans and gives us
excellent medium term visibility of pipeline, meaning that no part
of the business needs to take on inappropriate levels of risk. We
have a pipeline of new opportunities across our chosen sectors in
the public, regulated and private markets together with
opportunities in complementary and adjacent markets where we have
additional opportunities through our recently acquired businesses
.
The Group's strong balance sheet, quality order book and the
UK's planned investment in economic and social infrastructure mean
we are well placed to meet our growth objectives for the new
financial year, with pre-exceptional profit before tax expected to
be at the upper end of the current range of analyst estimates.
FINANCIAL REVIEW(1)
During the year the Group delivered another strong performance
delivering an increase in revenue, operating profit and dividends
.
Revenue for the year was up 12.6% at GBP1,393.7m (2022:
GBP1,237.2m), primarily reflecting growth in Infrastructure as we
benefited from increased AMP 7 spending and the first full year of
trading following our acquisition of the water business of nmcn plc
(in administration). Of the total, Building contributed revenue of
GBP797.1m (2022: GBP789.1m) broadly in line with 2022 despite some
delays to new contract starts through calendar year 2022, initially
due to the increased length of client procurement in response to
rising inflation and later due to delays in public sector decision
making. These delays have now eased and the resulting contract
awards provide excellent visibility into the new financial year.
Infrastructure recorded revenue of GBP590.8m (2022: GBP441.9m),
with substantial growth in Environment. PPP Investments' revenue
was GBP5.8m (2022: GBP6.2m).
The Group's operating profit before amortisation was GBP19.1m
(2022: GBP18.5m), including the profit on disposal of our interest
in a joint venture arrangement. Excluding a previously announced
one-off contract settlement (see below), operating profit before
amortisation was GBP21.9m. This is stated adjusted for exceptional
items. The combined divisional operating margin of 2.4% (2022:
2.4%) is in line with our margin improvement targets. This margin
performance was delivered against a backdrop of macroeconomic
challenges in 2022, including inflation, materials shortages and
rising interest rates, and also after allowing for a GBP1m cost of
living payment to employees in autumn 2022 and costs associated
with two acquisitions in the year. The margin performance provides
confidence against delivery of our 2026 financial targets.
The Group announced on 8 June 2023 that it had agreed settlement
terms in respect of its longstanding dispute concerning three
contracts with entities owned by a major infrastructure fund. The
settlement brought to a conclusion a complex and challenging
multi-contract dispute. Taking into account the requirements of
IFRS 15, the Group had constrained the revenue recognised in prior
periods to the extent that it was highly probable not to result in
a significant reversal in the future and had also previously
assessed any expected credit loss provision in accordance with IFRS
9. As a result of the settlement a further one-off expected credit
loss of GBP2.8m has been recognised in the current financial
year.
Exceptional items of GBP10.5m were incurred in the year (2022:
GBP13.7m), as set out in note 5 to the financial statements,
relating to our investment in cloud-based Enterprise Resource
Planning (ERP) finance, HR and commercial systems. These systems
went into operation in summer 2023, and are part of our investment
in our digital and data capabilities, which under updated
accounting guidance, is not allowed to be capitalised. The
exceptional items in 2022 related to the ERP investment (GBP6.0m)
and the acquisition of the nmcn water business (GBP7.7m).
The Group's pre-exceptional profit before tax for the year was
GBP20.6m (2022: GBP19.1m), or GBP23.4m excluding the one-off
contract settlement. Pre-exceptional profit before income tax is an
alternative performance measure and a key metric we use to monitor
our performance in years with exceptional or one-off items, such as
2023. Post-exceptional profit before tax was GBP10.1m (2022:
GBP5.4m).
We recorded pre-exceptional earnings per share for the year of
16.6p (2022: 16.0p), or 18.9p excluding the one-off contract
settlement. The post-exceptional earnings per share in 2023 was
8.7p (2022: 5.8p). Dividend per share of 10.5p is based on the
adjusted EPS of 18.9p.
The table below reconciles profit before income tax to our
alternative performance measure of pre-exceptional profit before
income tax, which is a key metric for us when monitoring
performance of the business.
2023 2022
GBPm GBPm
----------------------------------------- ------ ------
Profit before income tax 10.1 5.4
Exceptional items (10.5) (13.7)
Pre-exceptional profit before income tax 20.6 19.1
----------------------------------------- ------ ------
The Group has no debt or defined benefit pension obligations,
and at 30 June 2023 had a cash balance of GBP220.2m (2022:
GBP218.9m). The Group operates with daily net cash and the average
month-end cash balance in the year was GBP135m (2022: GBP174m).
This demonstrates continued robust cash performance throughout the
year, with the reduction compared to the prior year reflecting
recent acquisitions, our investment in cloud based digital systems,
some delays to contract starts, and in excess of GBP20m in
dividends and capital returns in the year. We expect similar levels
of average cash in FY24.
We continue to be proud of our collaborative and open approach
with all our supply chain. Under the Prompt Payment Code we paid
98% of invoices within 60 days (2022: 98%), average payment being
made in 26 days (2022: 25 days).
At 30 June 2023, we had a PPP portfolio of GBP44.6m (2022:
GBP47.5m), reflecting a blended 7.3% discount rate (2022: 7.0%).
This portfolio contributes to our balance sheet strength and
generated interest income of GBP3.9m (2022: GBP3.9m) in the
year.
We have modest working capital requirements. At 30 June 2023,
net working capital employed was GBP268.5m (30 June 2022:
GBP255.5m).
(1) Pre-exceptional items unless otherwise stated.
OPERATIONAL REVIEW
BUILDING
Building operates through nine regional businesses, serving a
range of public and private sector clients across the UK, with a
focus on the Education, Defence, Health and Justice sectors, where
we have core and proven strengths. Building maintains a substantial
presence in Scotland, operating as Morrison Construction. Our FM
business continues to complement our operations by providing
high-quality building maintenance services.
2023 2022
-------------------------------------------- ----- -----
Revenue (GBPm) 797.1 789.1
-------------------------------------------- ----- -----
Operating profit before amortisation (GBPm) 18.5 18.9
-------------------------------------------- ----- -----
Operating profit margin (%) 2.3 2.4
-------------------------------------------- ----- -----
Order book (GBPm) 2,249 2,047
-------------------------------------------- ----- -----
Building (which includes our FM business) generated revenue of
GBP797.1m (2022: GBP789.1m) and an operating profit before
amortisation of GBP18.5m (2022: GBP18.9m), which represents a
margin of 2.3% (2022: 2.4%). Revenue is broadly in line with the
previous year despite some delays to new contracts towards the end
of the financial year, reflecting increased length of client
procurement in response to rising inflation and some public sector
delays. The margin change reflects the challenging macroeconomic
conditions through the financial year, and we remain on track for
our 2026 targets.
We continue to grow the capabilities of our FM operation, with a
specific focus on decarbonising existing buildings through retrofit
and other interventions.
Building won contracts and positions on frameworks worth over
GBP999m, (2022: GBP945m). Significant appointments and wins for
Building included:
-- the GBP5.1bn Defence Estate Optimisation Portfolio.
-- the GBP2.5bn Ministry of Justice Constructor Services Framework.
-- the GBP95m new custodial facility at HMP Rye Hill.
-- the GBP75m Brent Cross Residential Project and
-- the GBP72m remodelling and refurbishment of Adelaide House, London.
Building's order book stands at GBP2,249m, compared to GBP2,047m
last year including 25% in Education, 30% in Defence and Custodial,
15% in Facilities Management and 5% in Health.
INFRASTRUCTURE
Infrastructure carries out civil engineering projects across the
UK, focused on Highways and Environment (incorporating our
activities in water and wastewater). This business has established
long term relationships with customers where we have a strong track
record on capital delivery and a growing capability in capital
maintenance and asset optimisation.
2023 2022
-------------------------------------------- ----- -----
Revenue (GBPm) 590.8 441.9
-------------------------------------------- ----- -----
Operating profit before amortisation (GBPm) 14.5 10.8
-------------------------------------------- ----- -----
Operating profit margin (%) 2.5 2.4
-------------------------------------------- ----- -----
Order book (GBPm) 1,464 1,396
-------------------------------------------- ----- -----
Infrastructure's revenue was GBP590.8m (2022: GBP441.9m). As
expected, revenue increased due to the higher level of activity
from the AMP7 programme in the water sector and the first full year
of trading following the acquisition of the acquired water
operations of nmcn plc (in administration). Infrastructure
generated an operating profit before amortisation of GBP14.5m
(2022: GBP10.8m) which represents a margin of 2.5% (2022: 2.4%).
The improved profit performance is in line with our expectations,
and includes the benefit of new contract frameworks.
During the year the Group acquired the water businesses of MCS
Control Systems and Ham Baker providing the Group with further
geographic scale and increased capabilities in the water
sector.
Infrastructure won contracts and positions on frameworks worth
GBP659m (2022: GBP466m). These included:
-- the GBP600m Southern Water AMP8 Framework;
-- the GBP140m Carlisle Southern Link Road;
-- two frameworks for Welsh Water; and
-- the GBP81m Melton Mowbray Distributor Road.
Infrastructure's current order book is GBP1,464m, compared to
GBP1,396m last year, including GBP626m in Infrastructure (Highways)
and GBP838m in Environment.
PPP INVESTMENTS
PPP Investments delivers major building and infrastructure
projects through public-private partnerships and co-development
opportunities in the Private Rented Sector, generating work for the
wider Group in the process.
2023 2022
------------------------------------- ---- -----
Revenue (GBPm) 5.8 6.2
------------------------------------- ---- -----
Profit/(loss) from operations (GBPm) 1.4 (0.9)
------------------------------------- ---- -----
Net interest income 3.8 3.9
------------------------------------- ---- -----
Directors' valuation (GBPm) 44.6 47.5
------------------------------------- ---- -----
With the reduction in traditional PPP/PFI bidding opportunities,
PPP Investments' main focus is co-development of Private Rented
Sector (PRS) projects. The Group achieved completion on its first
PRS scheme in August 2023. The development will see the creation of
272 one and two bedroom apartments in a 30-storey tower, close to
the centre of Cardiff. At the year-end the business was preferred
bidder on three further PRS schemes with a gross development value
of cGBP250m and anticipates further opportunities in the
future.
At the year end, the directors' valuation of our PPP portfolio
was GBP44.6m (2022: GBP47.5m), which is the fair value included in
the balance sheet reflecting a blended discount rate of 7.3% (2022:
7.0%). The valuation compared with a value invested of GBP35.2m
(2022: GBP35.7m). There is an active secondary market for these
assets, which generated an annuity interest income of GBP3.9m
(2022: GBP3.9m) and contributes to our balance sheet strength.
ENVIRONMENT, SOCIAL and GOVERNANCE (ESG)
Operating sustainably helps us to win work, engages our
employees, benefits communities and the environment, and makes us
more efficient. This is why ESG is an integral part of our
strategy, and at the core of how we deliver stakeholder value. We
monitor progress against the six pillars of our sustainability
strategy, which are mapped to the UN Sustainable Development Goals,
as set out below:
Health and Safety
Health and Safety is the number one priority for our business,
with our commitment to no harm leading the actions that we take to
keep each other safe every day. This was, once again, highlighted
in our Employee Survey, where respondents stated that we give
health and safety the highest priority.
As part of our drive for no harm, we made a concerted effort to
address our Lost Time Frequency Rate (LTFR), which measures every
incident that results in an employee taking more than a day away
from work. During the year this figure improved from 0.26 to 0.20.
Our Accident Frequency Rate (AFR), which measures where the number
of injuries resulting in more than seven days away from work, rose
to 0.09 from 0.06.
In March, we appointed a new leader for our Challenging Beliefs,
Affecting Behaviour Programme (CBAB) to reinvigorate our efforts to
address accident behaviour linking wider elements of the business'
strategy such as wellbeing and quality into the programme that can
influence behaviour.
People
Attracting, developing and retaining quality talent is a
cornerstone of our strategy. During the year, we made significant
investment in our Employee Value Proposition (EVP), acknowledging
the correlation between a strong EVP and engaged employees. This
included the launch of our People Pledge - 'Grow Together'
campaign, which showcases the unique set of benefits such as
culture, compensation, career development, work-life balance,
stability and location that our people receive in return for the
skills, capabilities and experience they bring.
We also launched our internal mobility programme, Explore, to
ensure we retain the talent we have built up by enabling our people
to move between roles and location within our organisation, rather
than seeking external moves, to meet their professional and
personal needs.
We pride ourselves on being people-orientated, progressive and
inclusive, and we sought our first Equity, Diversity and Inclusion
(EDI) rating from Clear Assured. In January 2023, we achieved
Bronze under this standard for our commitment to embedding
inclusive practices across our organisation. We have set our sights
on improving this rating and have established an inclusion team.
Early careers (apprentices, trainees and graduates) remain a key
area of focus as they help us grow our own talent, so we were
pleased to be voted number one Graduate Employer in Construction
and Civil Engineering, and second for apprentices in a list
compiled by TheJobCrowd, based on employee feedback. We also
received our second Gold Award from The 5% Club's Employer Audit
Scheme for our approach to 'earn and learn' opportunities for young
people. In recognition of the increased costs of living challenge,
we took early action and, in October 2022, paid a one-off cost of
living payment of up to GBP750 to more than half our employees and
additionally became early adopters of the new rate of the Real
Living Wage.
Environment and Climate Change
We champion the role we have to play in decarbonising the
environment for a greener, more sustainable future and reduced
our scope 1 and 2 emissions by a further 5.6% on a like-for-like
basis, thanks to a number of ongoing initiatives.
Having pledged to achieve net zero carbon across our own
operations by 2030 and all activities by 2045, we performed a full
inventory of our Scope 3 emissions which enabled us to set
near-term emissions reduction targets which have subsequently been
validated by the Science Based Targets initiative (SBTi).
We participated in the Carbon Disclosure Project (CDP), a global
disclosure system for organisations to manage their environmental
impacts, and, in our first submission as a construction company,
achieved a climate change score of 'C' - Awareness Level. Making
public disclosures through CDP provides transparent reporting of
our carbon reduction targets, initiatives and performance, and how
we are managing the risks and opportunities presented by climate
change. The score achieved provides a baseline against which we can
monitor the progress we are making in managing climate-related
issues.
We continue to invest in our capabilities to support clients to
deliver low and net zero carbon projects and recruited a team of
new low carbon managers across our business.
We have embedded our Net Zero Partners programme, an initiative
to collaborate closely with our supply chain and design consultants
to help everyone in the industry reach their net zero carbon
targets. We have also reviewed and updated our environmental
strategy, which now includes the ambition to deliver a biodiversity
net gain of 10% across the business.
Communities
Delivering a legacy of positive social value outcomes is
increasingly important for our clients and employees. Digitalising
how we measure our contributions is improving our ability to
capture more of the good work we do. Since FY22, we have delivered
over GBP650m in social and local economic value by providing
employment, work for the local supply chain, and opportunities for
training and apprenticeships.
We continue to take part in the Considerate Constructors Scheme
(CCS), which assesses sites on their approach to communities, the
environment and workforce. We increased our average CCS score from
41.8 to 43.4, which is above the industry average of 40.0.
Clients
Delivering excellence for our clients is key to the long-term
sustainability of our business. Our approach is reflected by the
fact that 87% of our order book is repeat business (2022: 94%) and
we have already secured 92% of our order book for FY24 (2022:
90%).
Quality is one of the biggest challenges facing the construction
industry today, with contractors striving to achieve the level of
quality expected every day in the buildings and infrastructure that
they deliver. Our approach is to embed quality into our designs and
to follow through into project delivery and handover. This is
supported by Modern Methods of Construction, and our Business
Management System (BMS), which contains the processes and templates
required to provide quality assurance at every step of a projects
journey, irrespective of size and complexity. We are developing our
digital tools and have an entirely digitised approach to project
delivery, improving safety, quality and collaboration, and reducing
carbon. Galliford Try become one of the first contractors to be
awarded Building a Safer Future Champion status.
Our increasing capability in supporting clients to design, build
and maintain low carbon infrastructure and buildings is recognised
by our selection to be on two of the working groups developing the
UK Net Zero Carbon Buildings Standard (NZCBS), a cross-industry
initiative which will provide a single agreed definition and
methodology for the industry to determine what constitutes a net
zero carbon building.
Supply Chain
The majority of our work is delivered in partnership with our
supply chain so we align key supply chain members with our culture
and develop collaborative relationships that improve social,
environmental and economic outcomes. This is led through our
Advantage through Alignment (AtA) programme and 58% of our core
Aligned trades spend is now with Aligned subcontractors. Training
and education remain a key theme beyond AtA, and we continue to
offer our CBAB and Net Zero Programmes to key supply chain
members.
We are signatories of the Prompt Payment Code, and pay 98% of
invoices within 60 days (FY22: 98%), with the average days to pay
of 26 days. We are also making progress against the additional
metric of paying 95% of invoices from suppliers with fewer than 50
employees within 30 days.
We continue to retain Gold status from the Supply Chain
Sustainability School, a collaboration designed to upskill its
members through free training and resources covering
sustainability, off-site manufacturing, BIM and management.
BOARD
As previously announced Alison Wood became Chair on 21 September
2022, when Peter Ventress stepped down from the role. On 31 March
2023, Gavin Slark, Non-executive Director, resigned from the Board,
after over seven years. On 1 June 2023 Michael Topham joined the
board as a Non-executive Director.
Also as previously announced Terry Miller, Senior Independent
Director, Non-executive Director and Chair of the Remuneration
Committee, will step down in October 2023 having served just over 9
years on the board. Sally Boyle Non-executive Director, who joined
the board on 26 April 2022, will assume the role of Chair of the
Remuneration Committee on Terry stepping down.
The Board thanks Peter, Gavin and Terry for their significant
contributions to the Group over many years and wishes them every
success in the future.
Consolidated income statement for the year ended 30 June
2023
2023 2022
--------------------------------------------------- ----- --------------------------------------- --------------- ----------- ---------
Exceptional Exceptional
Pre-Exceptional items Pre-Exceptional items
items (note Total items (note Total
Notes GBPm 5) GBPm GBPm GBPm 5) GBPm GBPm
--------------------------------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Revenue 4 1,393.7 - 1,393.7 1,237.2 - 1,237.2
Cost of sales (1,292.3) - (1,292.3) (1,151.5) (5.8) (1,157.3)
--------------------------------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Gross profit/(loss) 101.4 - 101.4 85.7 (5.8) 79.9
Other income 3.6 - 3.6 - - -
Administrative expenses (86.1) (10.5) (96.6) (69.9) (7.9) (77.8)
Impairment of financial assets 13 (2.8) - (2.8) - - -
Operating profit/(loss) 16.1 (10.5) 5.6 15.8 (13.7) 2.1
Share of post-tax profits from
joint ventures - - - 0.4 - 0.4
Finance income 6 6.3 - 6.3 4.3 - 4.3
Finance costs 6 (1.8) - (1.8) (1.4) - (1.4)
Profit/(loss) before income tax 20.6 (10.5) 10.1 19.1 (13.7) 5.4
Income tax (expense)/credit 7 (3.1) 2.1 (1.0) (1.7) 2.6 0.9
--------------------------------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Profit/(loss) for the year 17.5 (8.4) 9.1 17.4 (11.1) 6.3
--------------------------------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Earnings per share
Basic
* Profit attributable to ordinary shareholders 9 16.6p 8.7p 16.0p 5.8p
Diluted
* Profit attributable to ordinary shareholders 9 15.6p 8.1p 15.0p 5.5p
--------------------------------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Consolidated statement of comprehensive income for the year
ended 30 June 2023
2023 2022
Notes GBPm GBPm
---------------------------------------------------- ----- ----- -----
Profit for the year 9.1 6.3
Other comprehensive expense:
Items that may be reclassified subsequently to
profit or loss
Movement in fair value of PPP and other investments 12 (2.4) (0.9)
---------------------------------------------------- ----- ----- -----
Total items that may be reclassified subsequently
to profit or loss (2.4) (0.9)
Other comprehensive expense for the year net of
tax (2.4) (0.9)
---------------------------------------------------- ----- ----- -----
Total comprehensive income for the year 6.7 5.4
---------------------------------------------------- ----- ----- -----
Balance sheet
Group
--------------------------------------------- ----- -------------------
30 June
30 June 2022
Notes 2023 GBPm GBPm
--------------------------------------------- ----- ---------- -------
Assets
Non-current assets
Intangible assets 10 5.6 8.8
Goodwill 11 92.7 88.2
Property, plant and equipment 7.2 7.1
Right-of-use assets 38.6 24.5
Investments in joint ventures - 0.3
PPP and other investments 12 44.6 47.5
Deferred income tax assets 18 15.5 14.0
--------------------------------------------- ----- ---------- -------
Total non-current assets 204.2 190.4
--------------------------------------------- ----- ---------- -------
Current assets
Trade and other receivables 13 286.5 243.0
Current income tax assets 1.8 3.1
Cash and cash equivalents 14 220.2 218.9
--------------------------------------------- ----- ---------- -------
Total current assets 508.5 465.0
--------------------------------------------- ----- ---------- -------
Total assets 712.7 655.4
--------------------------------------------- ----- ---------- -------
Liabilities
Current liabilities
Trade and other payables 15 (525.1) (471.1)
Lease liabilities (14.9) (9.9)
Provisions for other liabilities and charges 16 (29.9) (27.4)
--------------------------------------------- ----- ---------- -------
Total current liabilities (569.9) (508.4)
--------------------------------------------- ----- ---------- -------
Non-current liabilities
Lease liabilities (24.2) (14.9)
--------------------------------------------- ----- ---------- -------
Total non-current liabilities (24.2) (14.9)
--------------------------------------------- ----- ---------- -------
Total liabilities (594.1) (523.3)
--------------------------------------------- ----- ---------- -------
Net assets 118.6 132.1
--------------------------------------------- ----- ---------- -------
Equity
Ordinary shares 52.4 55.5
Other reserves 20 135.3 132.2
Retained earnings 20 (69.1) (55.6)
--------------------------------------------- ----- ---------- -------
Total equity attributable to owners of the
Company 118.6 132.1
--------------------------------------------- ----- ---------- -------
Consolidated statement of changes in equity for the year ended
30 June 2023
Total
Ordinary Share Other Retained shareholders'
shares premium reserves earnings equity
Notes GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----- -------- -------- --------- --------- --------------
Consolidated statement
At 30 June 2021 55.5 - 118.4 (39.8) 134.1
Profit for the year - - - 6.3 6.3
Other comprehensive expense - - - (0.9) (0.9)
-------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for
the year - - - 5.4 5.4
Transactions with owners:
Dividends 8 - - - (6.3) (6.3)
Purchase of shares - - - (3.4) (3.4)
Share-based payments 19 - - - 2.3 2.3
Recycling of retained earnings
to merger reserve on reversal
of impairment of investment in
Galliford Try Limited 20 - - 13.8 (13.8) -
-------------------------------- ----- -------- -------- --------- --------- --------------
At 30 June 2022 55.5 - 132.2 (55.6) 132.1
Profit for the year - - - 9.1 9.1
Other comprehensive expense - - - (2.4) (2.4)
-------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for
the year - - - 6.7 6.7
Transactions with owners:
Dividends 8 - - - (9.6) (9.6)
Purchase of shares - - - (14.0) (14.0)
Share-based payments 19 - - - 3.4 3.4
Cancellation of shares 20 (3.1) - 3.1 - -
-------------------------------- ----- -------- -------- --------- --------- --------------
At 30 June 2023 52.4 - 135.3 (69.1) 118.6
-------------------------------- ----- -------- -------- --------- --------- --------------
Statement of cash flows for the year ended 30 June 2023
Group
--------------------------------------------------- ----- --------------
2023 2022
Notes GBPm GBPm
--------------------------------------------------- ----- ------ ------
Cash flows from operating activities
Profit for the year 9.1 6.3
Adjustments for:
Income tax expense/(credit) - continuing
operations 7 1.0 (0.9)
Net finance income - continuing operations 6 (4.5) (2.9)
------ ------
Profit before finance costs for continuing
operations 5.6 2.5
Depreciation, amortisation and impairment
of non-current assets 10 17.1 14.5
Profit on disposal of joint venture 12 (3.6) -
Share-based payments 19 3.4 2.3
Share of post-tax losses/(profits) from
joint ventures - (0.4)
Impairment of financial asset 13 2.8 -
Other non-cash movements (0.2) -
Net cash generated from operations before
changes in
working capital 25.1 18.9
(Increase)/decrease in trade and other receivables 13 (43.3) 1.2
Increase in trade and other payables 15 47.7 6.7
Increase/(decrease) in provisions 16 2.5 (11.3)
--------------------------------------------------- ----- ------ ------
Net cash generated from operations 32.0 15.5
Interest received 6.3 4.3
Interest paid (1.8) (1.4)
Income tax (paid)/received (1.0) 4.4
--------------------------------------------------- ----- ------ ------
Net cash generated from operating activities 35.5 22.8
Cash flows from investing activities
Dividends received from joint ventures and
associates 0.3 0.3
Decrease in amounts due from joint ventures 0.2 5.0
Proceeds from disposal of joint venture 3.6 -
PPP loan repayments 12 0.5 0.7
Acquisition of business combinations, net
of cash acquired 22 (1.0) (0.3)
Proceeds from disposal of property, plant
and equipment - 0.1
Acquisition of property, plant and equipment (2.2) (5.0)
--------------------------------------------------- ----- ------ ------
Net cash generated from investing activities 1.4 0.8
Cash flows from financing activities
Repayment of lease liabilities (12.0) (11.2)
Purchase of own shares 20 (14.0) (3.4)
Dividends paid to Company shareholders 8 (9.6) (6.3)
--------------------------------------------------- ----- ------ ------
Net cash used in financing activities (35.6) (20.9)
Net increase in cash and cash equivalents 1.3 2.7
--------------------------------------------------- ----- ------ ------
Cash and cash equivalents at 1 July 14 218.9 216.2
--------------------------------------------------- ----- ------ ------
Cash and cash equivalents at 30 June 14 220.2 218.9
--------------------------------------------------- ----- ------ ------
Notes to the consolidated financial statements
1 Basis of preparation
The financial information set out in this preliminary
announcement does not constitute Galliford Try Holdings plc's
statutory accounts for the years ended 30 June 2023 and 30 June
2022. Statutory accounts for the year ended 30 June 2023 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting. The Auditor has reported on those accounts;
their report was unqualified, did not draw attention by way of
emphasis, and did not contain a statement under Section 498 (2) or
(3) of the Companies Act 2006. The Board approved the Statutory
accounts for the year ended 30 June 2023 on 20 September 2023.
Statutory accounts for the year ended 30 June 2022 have been
delivered to the Registrar of Companies. The Auditor has reported
on those accounts; their report was unqualified, did not draw
attention by way of emphasis, and did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006.
In preparing the consolidated financial statements the directors
have considered the risks and potential impact of climate change to
the Group. It is unlikely that these risks will have a material
financial impact in the short and medium term, particularly given
the nature of the contractual arrangements in place, however the
directors continue to monitor this, particularly regarding any
judgements on construction contracts, impairment reviews and going
concern.
Galliford Try Holdings plc (the Company) is a public limited
company incorporated, listed and domiciled in the UK, and
registered under the laws of England and Wales. The address of the
registered office is 3 Frayswater Place, Cowley, Uxbridge, UB8 2AD.
The Company has its listing on the London Stock Exchange.
The financial information contained in this results announcement
has been prepared on the basis of the accounting policies set out
in the statutory statements for the year ended 30 June 2023. Whilst
the financial information included in this announcement has been
computed in accordance with the recognition and measurement
requirements of UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006, this announcement
does not itself contain sufficient disclosures to comply with
IFRS.
2 Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 30 June 2022.
3 Segmental reporting
Segmental reporting is presented in the consolidated financial
statements in respect of the Group's business segments, which are
the primary basis of segmental reporting. The business segmental
reporting reflects the Group's management and internal reporting
structure. Segmental results include items directly attributable to
the segment, as well as those that can be allocated on a reasonable
basis. As the Group has no activities outside the UK, segment
reporting is not required by geographical region.
The Chief Operating Decision-Makers (CODM) have been identified
as the Group's Chief Executive and Finance Director. The CODM
review the Group's internal reporting in order to assess
performance and allocate resources. Management has determined the
operating segments of the Group to be Building, Infrastructure, PPP
Investments and Central (primarily representing central
overheads).
The CODM assess the performance of the operating segments based
on a measure of adjusted earnings before finance costs,
amortisation, exceptional items and taxation. This measurement
basis excludes the effects of non-recurring expenditure from the
operating segments, such as restructuring costs and impairments
when the impairment is the result of an isolated, non-recurring
event. In the financial year ending 30 June 2023, the Group has
also presented pre-exceptional performance excluding a one off
contract settlement as announced on 8 June 2023 (disclosed in the
consolidated income statement as an impairment of financial assets
of GBP2.8m). Interest income and expenditure are included in the
result for each operating segment that is reviewed by the CODM.
Other information provided to them is measured in a manner
consistent with that in the financial statements.
Income statement
Building Infrastructure PPP Investments Central Total
Year-ended 30 June 2023 GBPm GBPm GBPm GBPm GBPm
---------------------------------------- -------- -------------- --------------- ------- -------
Revenue 797.1 590.8 5.8 - 1,393.7
Pre-exceptional operating profit/(loss)
before amortization and impairment
of financial assets 18.5 14.5 1.4 (12.5) 21.9
Finance income - 0.3 3.9 2.1 6.3
Finance costs (0.7) (0.7) (0.1) (0.3) (1.8)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional profit/(loss) before
amortization, taxation and impairment
of financial assets 17.8 14.1 5.2 (10.7) 26.4
Amortisation of intangible assets (1.0) (0.9) - (1.1) (3.0)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional profit/(loss) before
taxation and impairment of financial
assets 16.8 13.2 5.2 (11.8) 23.4
Impairment of financial assets - (2.8) - - (2.8)
Exceptional items - - - (10.5) (10.5)
---------------------------------------- -------- -------------- --------------- ------- -------
Profit before tax 16.8 10.4 5.2 (22.3) 10.1
Income tax charge (1.0)
---------------------------------------- -------- -------------- --------------- ------- -------
Profit for the year 9.1
---------------------------------------- -------- -------------- --------------- ------- -------
Building Infrastructure PPP Investments Central Total
Year-ended 30 June 2022 GBPm GBPm GBPm GBPm GBPm
---------------------------------------- -------- -------------- --------------- ------- -------
Revenue 789.1 441.9 6.2 - 1,237.2
Pre-exceptional operating profit/(loss)
before amortisation 18.9 10.8 (0.9) (10.3) 18.5
Share of post-tax profits from joint
ventures - - 0.4 - 0.4
Finance income - - 3.9 0.4 4.3
Finance costs (0.3) (0.7) - (0.4) (1.4)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional profit/(loss) before
amortisation and taxation 18.6 10.1 3.4 (10.3) 21.8
---------------------------------------- -------- -------------- --------------- ------- -------
Amortisation of intangible assets (1.0) (0.7) - (1.0) (2.7)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional profit/(loss) before
taxation 17.6 9.4 3.4 (11.3) 19.1
Exceptional items - (7.7) - (6.0) (13.7)
Profit before tax 17.6 1.7 3.4 (17.3) 5.4
Income tax credit 0.9
---------------------------------------- -------- -------------- --------------- ------- -------
Profit for the year 6.3
---------------------------------------- -------- -------------- --------------- ------- -------
Inter-segment revenue is eliminated from revenue above. In the
year to 30 June 2023, this amounted to GBP61.0m (2022: GBP38.8m)
for continuing operations, of which GBPnil (2022: GBPnil) was in
Building, GBP40.1m (2022: GBP21.7m) was in Infrastructure and
GBP20.9m (2022: GBP17.1m) was in central costs.
Balance sheet
Building Infrastructure PPP Investments Central Total
30 June 2023 Notes GBPm GBPm GBPm GBPm GBPm
------------------------------- ----- -------- -------------- --------------- ------- -------
Goodwill and intangible assets 41.0 57.1 - 0.2 98.3
Working capital employed (60.9) (178.2) 43.3 (4.1) (199.9)
Net cash 14 139.0 42.7 (8.6) 47.1 220.2
------------------------------- ----- -------- -------------- --------------- ------- -------
Net assets 119.1 (78.4) 34.7 43.2 118.6
Total Group liabilities (594.1)
------------------------------- ----- -------- -------------- --------------- ------- -------
Total Group assets 712.7
------------------------------- ----- -------- -------------- --------------- ------- -------
Building Infrastructure PPP Investments Central Total
30 June 2022 Notes GBPm GBPm GBPm GBPm GBPm
------------------------------- ----- -------- -------------- --------------- ------- -------
Goodwill and intangible assets 42.0 53.3 - 1.7 97.0
Working capital employed (92.8) (139.5) 41.9 6.6 (183.8)
Net cash 14 154.9 (1.4) (9.6) 75.0 218.9
------------------------------- ----- -------- -------------- --------------- ------- -------
Net assets 104.1 (87.6) 32.3 83.3 132.1
Total Group liabilities (523.3)
------------------------------- ----- -------- -------------- --------------- ------- -------
Total Group assets 655.4
------------------------------- ----- -------- -------------- --------------- ------- -------
4 Revenue
Nature of revenue streams
(i) Building and Infrastructure segments
Our Construction business operates nationwide, working with
clients predominantly in the public and regulated sectors, such as
health, education and defence markets within the Building segment
and road and water markets within the Infrastructure segment (as
well as private commercial clients). Projects include the
construction of assets (with services including design and build,
construction only and refurbishment) in addition to the
maintenance, renewal, upgrading and managing of services across
utility and infrastructure assets.
Nature, timing of satisfaction of performance obligations
Revenue stream and significant payment terms
----------------- ------------------------------------------------------------------
Fixed price A number of projects within these segments are undertaken
using fixed-price contracts.
Contracts are typically accounted for as a single performance
obligation. Even when a contract (or multiple combined
contracts) includes both design and build elements,
they are considered to form a single performance obligation
as the two elements are not distinct in the context
of the contract, given that each is highly dependent
on the other.
The Group typically receives payments from the customer
based on a contractual schedule of value that reflects
the timing and performance of service delivery. Revenue
is therefore recognised over time (the period of construction)
based on an input model (reference to costs incurred
to date). Un-invoiced amounts are presented as contract
assets.
Management does not expect a financing component to
exist.
----------------- ------------------------------------------------------------------
Cost-reimbursable A number of projects are undertaken using cost reimbursable/target
price (possibly with a pain/gain share mechanism) contracts.
These projects are often delivered under frameworks,
however, individual performance obligations under the
framework are normally determined at a project level
where multiple services are supplied. The Group constrains
revenue and calculates any pain/gain mechanism at the
framework level where appropriate.
The Group typically receives payments from the customer
based on actual costs incurred. Revenue is therefore
recognised over time (the period of construction) based
on an input model (reference to costs incurred to date).
Un-invoiced amounts are presented as contract assets.
No significant financing component typically exists
in these contracts.
----------------- ------------------------------------------------------------------
Facilities Contracts undertaken within the Building segment that
management* provide full life-cycle solutions to clients, are accounted
for as a single performance obligation, with revenue
recognised over time and typically on a straight-line
basis.
----------------- ------------------------------------------------------------------
* Facilities management represents around 5% of the total Building segment turnover.
(ii) Investments segment
Our Investments business specialises in managing construction
through to operations for major building projects through public
private partnerships and co-development opportunities. The business
leads bid consortia and arranges finance, as well as making debt
and equity investments (which are recycled).
Nature, timing of satisfaction of performance obligations
Revenue stream and significant payment terms
--------------- -------------------------------------------------------------
PPP Investments The Group has investments in a number of PPP Special
Purpose Vehicles (SPVs), delivering major building and
infrastructure projects.
The business additionally provides management services
to the SPVs under Management Service Agreements (MSA).
Revenue for these services is typically recognised over
time as and when the service is delivered to the customer.
Revenue for reaching project financial close (such as
success fees) is recognised at a point in time, at financial
close (when control is deemed to pass to the customer).
--------------- -------------------------------------------------------------
Disaggregation of revenue
The Group considers the split of revenue by operating segment to
be the most appropriate disaggregation. All revenue has been
derived from performance obligations settled over time.
Revenue on existing contracts, where performance obligations are
unsatisfied or partially unsatisfied at the balance sheet date, is
expected to be recognised as follows:
2026
2024 2025 onwards Total
Revenue - year ended 30 June 2023 GBPm GBPm GBPm GBPm
------------------------------------------------- ------- ----- -------- -------
Building 614.4 214.4 32.7 861.5
Infrastructure 453.1 185.0 49.4 687.5
------------------------------------------------- ------- ----- -------- -------
Total Construction 1,067.5 399.4 82.1 1,549.0
PPP Investments 3.2 2.6 26.5 32.3
------------------------------------------------- ------- ----- -------- -------
Total transaction price allocated to performance
obligations yet to be satisfied 1,070.7 402.0 108.6 1,581.3
------------------------------------------------- ------- ----- -------- -------
2025
2023 2024 onwards Total
Revenue - year ended 30 June 2022 GBPm GBPm GBPm GBPm
------------------------------------------------- ------- ----- -------- -------
Building 526.4 111.6 33.2 671.2
Infrastructure 295.2 134.5 142.4 572.1
------------------------------------------------- ------- ----- -------- -------
Total Construction 821.6 246.1 175.6 1,243.3
PPP Investments 2.8 2.7 25.7 31.2
------------------------------------------------- ------- ----- -------- -------
Total transaction price allocated to performance
obligations yet to be satisfied 824.4 248.8 201.3 1,274.5
------------------------------------------------- ------- ----- -------- -------
Any element of variable consideration is estimated at a value
that is highly probable not to result in a significant reversal in
the cumulative revenue recognised.
5 Exceptional items
The Group adjusts for certain material one-off exceptional items
and other items which the Board believes assist in understanding
the performance achieved by the Group as this better reflects the
underlying and ongoing performance of the business.
2023 2022
GBPm GBPm
-------------------------------------------------------------- ----- -----
Acquisition and integration related costs(1) - cost
of sales - 5.8
Acquisition and integration related costs(1) - administrative
expenses - 1.9
Implementation costs of cloud based arrangements(2)
- administrative expenses 10.5 6.0
-------------------------------------------------------------- ----- -----
Total 10.5 13.7
-------------------------------------------------------------- ----- -----
(1) The Group acquired the Water business of nmcn plc (in
administration) on 7 October 2021 and incurred acquisition and
integration related costs of GBP7.7m. This is predominantly made up
of legal and professional fees, integration and restructuring costs
recognised in administrative expenses, and specific staff costs
incurred during the period of site closures following nmcn plc
entering administration that are recognised in cost of sales.
Although similar costs have been incurred as a result of the
acquisitions in the year, these have not been classified as
exceptional as they are not considered to be material or
significant in quantum.
(2) The Group incurred GBP10.5m (2022: GBP6.0m) of customisation
and configuration costs associated with the move to Oracle Fusion,
a cloud-based computing arrangement, during the period. Taking into
account the IFRIC Agenda Decision issued by the IFRS IC in March
2021, the Group has analysed the costs and concluded that these
costs should be expensed in the period. In accordance with the
Group's existing accounting policy, management considers that the
costs should be separately disclosed as exceptional because they
are significant and irregular. The Group expects the project and
associated costs to be completed in the first half of the next
financial year.
An associated tax credit of GBP2.1m (2022: GBP2.6m) has been
recognised.
6 Net finance income
2023 2022
Group GBPm GBPm
------------------------------------------------------------ ----- -----
Interest receivable on bank deposits 2.4 0.4
Interest receivable from PPP Investments and joint ventures 3.9 3.9
Finance income 6.3 4.3
Other (including interest on lease liabilities) (1.8) (1.4)
------------------------------------------------------------ ----- -----
Finance costs (1.8) (1.4)
Net finance income 4.5 2.9
------------------------------------------------------------ ----- -----
7 Income tax charge/(credit)
2023 2022
Group Notes GBPm GBPm
----------------------------------------------- ----- ----- ------
Analysis of expense in year
Current year's income tax
Current tax - (1.6)
Deferred tax(1) 18 0.9 0.5
Adjustments in respect of prior years
Current tax - 0.8
Deferred tax 18 0.1 (0.6)
----------------------------------------------- ----- ----- ------
Income tax expense/(credit) 1.0 (0.9)
----------------------------------------------- ----- ----- ------
Tax on items recognised in other comprehensive
income
Tax recognised in other comprehensive income - -
Total tax expense/(credit) 1.0 (0.9)
----------------------------------------------- ----- ----- ------
1 Includes impact of change in rate of tax.
The total income tax charge for the year of GBP1.0m (2022:
credit of GBP0.9m) is lower (2022: lower) than the blended standard
rate of corporation tax in the UK of 20.5% (2022: 19.0%). The
differences are explained below:
2023 2022
GBPm GBPm
------------------------------------------------------------ ----- -----
Profit before income tax 10.1 5.4
------------------------------------------------------------ ----- -----
Profit before income tax multiplied by the blended standard
corporation tax rate in the UK of 20.5% (2022: 19.0%) 2.1 1.0
Effects of:
Expenses not deductible for tax purposes 0.1 0.4
Non-taxable income (1.0) (0.1)
Adjustments in respect of prior years 0.1 0.2
Change in tax rates 0.1 (0.4)
Net (recognition and utilisation)/restriction of tax
losses(1) - (2.1)
Other (0.4) 0.1
------------------------------------------------------------ ----- -----
Income tax expense/(credit) 1.0 (0.9)
------------------------------------------------------------ ----- -----
1 The net recognition and utilisation of tax losses in the prior
year of GBP2.1m reflects the recognition of GBP2.1m tax losses.
In the Spring Budget 2021, the UK Government announced that from
1 April 2023, the corporation tax rate would increase from 19% to
25%. This new law was substantively enacted in the Finance Bill
2021 and received Royal Assent on 10 June 2021. Where appropriate,
deferred taxes at the balance sheet date have been measured using
the appropriate tax rates (based on when the underlying balance is
expected to crystallise) and reflected in these financial
statements.
8 Dividends
2023 2022
-------------------------------- ---------------- ----------------
pence pence
Group GBPm per share GBPm per share
-------------------------------- ---- ---------- ---- ----------
Previous year final 6.4 5.8 3.9 3.5
Current year interim 3.2 3.0 2.4 2.2
-------------------------------- ---- ---------- ---- ----------
Dividend recognised in the year 9.6 8.8 6.3 5.7
-------------------------------- ---- ---------- ---- ----------
The following dividends were declared by the Company in respect
of each accounting period presented:
2023 2022
------------------------------ ---------------- ----------------
pence pence
GBPm per share GBPm per share
------------------------------ ---- ---------- ---- ----------
Interim 3.2 3.0 2.4 2.2
Special 12.6 12.0 - -
Final 7.9 7.5 6.4 5.8
Dividend relating to the year 23.7 22.5 8.8 8.0
------------------------------ ---- ---------- ---- ----------
The directors are proposing a final dividend in respect of the
financial year ended 30 June 2023 of 7.5 pence per share (2022: 5.8
pence per share), bringing the total dividend in respect of 2023 to
22.5 pence per share (2022: 8.0 pence per share). The final
dividend will absorb approximately GBP7.9m of equity. Subject to
shareholders' approval at the AGM to be held on 10 November 2023,
the dividend will be paid on 8 December 2023 to shareholders who
are on the register of members at the close of business on 10
November 2023.
On 8 June, the directors declared a special dividend of 12.0
pence per share following the settlement of its long-standing
dispute concerning three contracts with entities owned by a major
infrastructure fund, returning a substantial portion of the
proceeds to shareholders. The Special Dividend will be paid on 27
October 2023 to shareholders on the register as at 6 October 2023.
The ex-dividend date is 5 October 2023.
9 Earnings per share
Basic and diluted earnings/(losses) per share (EPS)
Basic EPS is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary
shares outstanding during the year, excluding those held by the
Trust, which are treated as cancelled.
Under normal circumstances, the average number of shares is
diluted by reference to the average number of potential ordinary
shares held under option in the year. The dilutive effect amounts
to the number of ordinary shares which would be purchased using the
aggregate difference in value between the market value of shares
and the share option price. Only shares that have met their
cumulative performance criteria are included in the dilution
calculation. The Group has two classes of potentially dilutive
ordinary shares: those share options granted to employees where the
exercise price is less than the average market price of the
Company's ordinary shares during the year and the contingently
issuable shares under the Group's long-term incentive plans. A loss
per share cannot be reduced through dilution, hence this dilution
is only applied where the Group has reported a profit.
The earnings and weighted average number of shares used in the
calculations are set out below.
2023 2022
---------------------------------- -------------------------------- --------------------------------
Weighted Weighted
average Per share average Per share
Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Basic EPS - pre-exceptional
Earnings attributable to ordinary
shareholders
pre-exceptional items 17.5 105,180,316 16.6 17.4 109,016,667 16.0
Basic EPS
Earnings attributable to ordinary
shareholders
post-exceptional items 9.1 105,180,316 8.7 6.3 109,016,667 5.8
Effect of dilutive securities:
Options n/a 7,286,375 n/a n/a 6,627,132 n/a
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Diluted EPS - pre-exceptional 17.5 112,466,691 15.6 17.4 115,643,799 15.0
Diluted EPS 9.1 112,466,691 8.1 6.3 115,643,799 5.5
---------------------------------- -------- ----------- --------- -------- ----------- ---------
The pre-exceptional EPS (basic) excluding the impact of the
one-off contract settlement as announced on 8 June 2023 (note 13)
is 18.9p (and diluted EPS is 17.7p).
10 Intangible assets
Customer
contracts Computer
and relationships software Total
Group Notes GBPm GBPm GBPm
--------------------------------------------- ----- ------------------ --------- ------
Cost
At 1 July 2021 12.2 10.9 23.1
Additions 5.2 0.6 5.8
--------------------------------------------- ----- ------------------ --------- ------
At 30 June 2022 17.4 11.5 28.9
Additions 22 0.3 - 0.3
--------------------------------------------- ----- ------------------ --------- ------
At 30 June 2023 17.7 11.5 29.2
--------------------------------------------- ----- ------------------ --------- ------
Accumulated amortisation and impairment loss
At 1 July 2021 (9.2) (8.2) (17.4)
Amortisation in year (1.5) (1.2) (2.7)
--------------------------------------------- ----- ------------------ --------- ------
At 1 July 2022 (10.7) (9.4) (20.1)
Amortisation in year (1.8) (1.2) (3.0)
Impairment loss - (0.5) (0.5)
--------------------------------------------- ----- ------------------ --------- ------
At 30 June 2023 (12.5) (11.1) (23.6)
--------------------------------------------- ----- ------------------ --------- ------
Net book amount
At 30 June 2023 5.2 0.4 5.6
--------------------------------------------- ----- ------------------ --------- ------
At 30 June 2022 6.7 2.1 8.8
--------------------------------------------- ----- ------------------ --------- ------
At 30 June 2021 3.0 2.7 5.7
--------------------------------------------- ----- ------------------ --------- ------
11 Goodwill
Group Notes GBPm
---------------------------------------------------- ----- ----
Cost
At 30 June 2021 77.2
Additions 11.0
At 30 June 2022 88.2
Additions 22 4.5
At 30 June 2023 92.7
---------------------------------------------------- ----- ----
Aggregate impairment at 30 June 2021, 2022 and 2023 -
---------------------------------------------------- ----- ----
At 30 June 2021, 2022 and 30 June 2023 -
---------------------------------------------------- ----- ----
Net book amount
At 30 June 2023 92.7
---------------------------------------------------- ----- ----
At 30 June 2022 88.2
---------------------------------------------------- ----- ----
At 30 June 2021 77.2
---------------------------------------------------- ----- ----
Goodwill is allocated to the Group's CGUs identified according
to business segment. The goodwill is attributable to the following
business segments:
2023 2022
GBPm GBPm
--------------- ----- -----
Building 40.0 40.0
Infrastructure 52.7 48.2
--------------- ----- -----
92.7 88.2
--------------- ----- -----
Impairment review of goodwill and key assumptions
Goodwill is tested for impairment at least annually. The
recoverable amount of a CGU is determined based on value in use
calculations. These calculations use pre-tax cash flow projections
based on future financial budgets approved by the Board, based on
past performance and its expectation of market developments. The
key assumptions within these budgets relate to revenue and the
future profit margin achievable, in line with our strategy and
targets. Future budgeted revenue is based on management's knowledge
of actual results from prior years and latest forecasts for the
current year, along with the existing secured works and
management's expectation of the future level of work available
within the market sector. In establishing future profit margins,
the margins currently being achieved are considered in conjunction
with expected inflation rates in each revenue and cost category. In
Building and Infrastructure, the margins currently being achieved
are expected to increase in line with the strategy set out in the
Strategic report within the Annual Report for the year ended 30
June 2023. The Building and Infrastructure CGU's are not sensitive
to changes in key assumptions and management does not consider that
any reasonable possible change in any single assumption would give
rise to an impairment of the carrying value of goodwill and
intangibles.
12 PPP and other investments
2023 2022
Group GBPm GBPm
------------------------------------------- ----- -----
At 1 July 47.5 49.1
Disposals and subordinated loan repayments (0.5) (0.7)
Movement in fair value (2.4) (0.9)
------------------------------------------- ----- -----
At 30 June 44.6 47.5
------------------------------------------- ----- -----
These comprise PPP/PFI investments and investments in other
listed securities.
During the year, there were no additions (2022: GBPnil) to the
Group's PPP/PFI investments, subordinated loans of GBP0.5m (2022:
GBP0.5m) were repaid. Of the total fair value movement in the year
of GBP2.4m, all of it relates to the movement in the fair value of
the PPP investments (2022: GBP0.9m), and has been recorded through
other comprehensive income.
The fair value of the portfolio reflects a blended discount rate
of 7.3% (2022: 7.0%). A 0.5% increase/reduction in the discount
rate would result in a corresponding decrease/increase in the value
of the investments recorded in the balance sheet of approximately
GBP1.6m (2022: GBP1.9m).
During the year the Group disposed of equity accounted interests
in joint ventures held at GBPnil (2022: GBP0.2m), generating a
profit on disposal of GBP3.6m (2022: GBPnil).
13 Trade and other receivables
Group
---------------------------------------------- ----- ------------
2023 2022
Notes GBPm GBPm
---------------------------------------------- ----- ----- -----
Amounts falling due within one year:
Trade receivables 52.0 46.0
Less: provision for impairment of receivables (0.1) (0.1)
---------------------------------------------- ----- ----- -----
Trade receivables - net 51.9 45.9
Contract assets(1) 17 204.9 173.4
Amounts due from joint ventures 0.9 1.1
Research and development expenditure credits 5.8 4.5
Other receivables 7.6 4.7
Prepayments 15.4 13.4
---------------------------------------------- ----- ----- -----
286.5 243.0
---------------------------------------------- ----- ----- -----
1 Contract assets of GBP204.9m at 30 June 2023 (2022: GBP173.4m)
are stated net of a life-time expected credit loss allowance of
GBPnil (2022: GBP14.0m).
The Group announced on 8 June 2023 that it had agreed settlement
terms in respect of its long-standing dispute concerning three
contracts with entities owned by a major infrastructure fund. The
settlement brought to a conclusion a complex and challenging
multi-contract dispute. Taking into account the requirements of
IFRS 15, the Group had constrained the revenue recognised in prior
periods to the extent that it was highly probable not to result in
a significant reversal in the future and had also previously
assessed any expected credit loss provision in accordance with IFRS
9. As a result of the settlement a further one-off expected credit
loss of GBP2.8m has been recognised in the current financial
year.
14 Cash and cash equivalents
Group
-------------------------------------------------- ------------
2023 2022
GBPm GBPm
-------------------------------------------------- ----- -----
Cash at bank and in hand and per the statement of
cash flows 220.2 218.9
-------------------------------------------------- ----- -----
Cash at bank above includes GBP11.0m (2022: GBP22.7m), being the
Group's share of cash held by jointly controlled operations. The
effective interest rate received on cash balances is 2.6% (2022:
0.3%). The Group has no bank borrowings or loans.
Net cash excludes IFRS 16 lease liabilities.
15 Trade and other payables
Group
------------------------------------------- ----- ------------
2023 2022
Notes GBPm GBPm
------------------------------------------- ----- ----- -----
Trade payables 136.6 102.3
Contract liabilities 17 106.6 104.4
Other taxation and social security payable 53.4 29.9
Other payables 1.9 1.6
Accruals 226.6 232.9
------------------------------------------- ----- ----- -----
525.1 471.1
------------------------------------------- ----- ----- -----
16 Provisions for other liabilities and charges
Onerous Total
Group contracts Rectification GBPm
At 1 July 2021 (0.8) (24.2) (25.0)
Utilised 10.2 3.7 13.9
Additions(1) (14.0) (2.3) (16.3)
----------------- ---------- ------------- ------
At 30 June 2022 (4.6) (22.8) (27.4)
----------------- ---------- ------------- ------
Utilised 6.8 3.5 10.3
Additions(1) (4.2) (8.6) (12.8)
----------------- ---------- ------------- ------
At 30 June 2023 (2.0) (27.9) (29.9)
----------------- ---------- ------------- ------
(1) Additions include GBP0.1m (2022: GBP13.7m) acquired as part
of business combinations (note 22).
Onerous contract provisions are made on loss-making contracts
the Group is obliged to complete.
Rectification provisions are made for potential claims and
defects for remedial works against work completed by the Group and
includes provisions for dilapidations on premises the Group
occupies.
As at 30 June 2023 GBP22.3m of provision related to three
contracts. Management's best estimate of the range of outcomes on
these three contracts is between GBP14.6m and GBP22.7m. The
remaining GBP7.6m of the provision relates to a number of
immaterial balances. Due to the level of uncertainty, combination
of cost and income variables and timing across the remaining
portfolio of contracts, it is impracticable to provide a
quantitative analysis of the aggregated judgements that are applied
at a portfolio level and therefore management has not given a range
of expected outcomes.
Due to the nature of the provisions, the timing of any potential
future outflows is uncertain, however they are expected to be
utilised within the Group's normal operating cycle, and accordingly
are classified as current liabilities. Of the total provisions,
GBP17.0m (2022: GBP18.8m) is likely to be utilised by the end of
2031 with the remainder utilised within 12 months.
17 Contract balances
Contract assets and liabilities are included within 'trade and
other receivables' and 'trade and other payables' respectively on
the face of the balance sheet. Where there is a corresponding
contract asset and liability in relation to the same contract, the
balance shown is the net position. The timing of work performed
(and thus revenue recognised), billing profiles and cash collection
results in trade receivables (amounts billed to date and unpaid),
contract assets (unbilled amounts where revenue has been
recognised) and contract liabilities (customer advances and
deposits, where no corresponding work has yet to be performed,
being recognised on the Group's balance sheet.
The reconciliation of the Group opening to closing contract
balances is shown below:
2023 2022
-------------------------------------------- --------------------- ---------------------
Contract Contract Contract Contract
asset liability asset liability
GBPm GBPm GBPm GBPm
-------------------------------------------- --------- ---------- --------- ----------
At 1 July 173.4 (104.4) 156.0 (92.7)
Revenue recognised in the year 1,334.9 58.8 1,183.2 54.0
Net cash received in advance of performance
obligations being fully satisfied - (61.0) - (65.7)
Transfers in the year from contract assets
to trade receivables (1,303.4) - (1,165.8) -
-------------------------------------------- --------- ---------- --------- ----------
30 June 204.9 (106.6) 173.4 (104.4)
-------------------------------------------- --------- ---------- --------- ----------
Revenue allocated to performance obligations that are
unsatisfied at 30 June, is expected to be recognised as disclosed
in note 4.
The amount of revenue recognised in the year from performance
obligations satisfied in previous periods amounts to GBP4.8m (2022:
GBP3.0m).
18 Deferred income tax
Deferred income tax is calculated in full on temporary
differences under the liability method and is measured at the
average tax rates that are expected to apply in the periods in
which the timing differences are expected to reverse.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current income tax assets
against current income tax liabilities. The net deferred tax
position at 30 June was:
Group
-------------------------------- ------------
2023 2022
GBPm GBPm
-------------------------------- ----- -----
Deferred income tax assets 16.6 15.6
-------------------------------- ----- -----
Deferred income tax liabilities (1.1) (1.6)
-------------------------------- ----- -----
Net deferred income tax 15.5 14.0
-------------------------------- ----- -----
The movement for the year in the net deferred income tax account
is as shown below:
Group
----------------------------------------------------- ------------
2023 2022
GBPm GBPm
----------------------------------------------------- ----- -----
At 1 July 14.0 14.3
Current year's deferred income tax (0.9) (0.9)
Adjustment in respect of prior years (0.1) 0.6
Transfer from current tax assets and change in rates
of deferred income tax 2.5 0.3
Acquisition of subsidiaries - (0.3)
----------------------------------------------------- ----- -----
At 30 June 15.5 14.0
----------------------------------------------------- ----- -----
All remaining tax losses have now been recognised and the Group
has approximately GBP53m (2022: GBP53m) of unrecognised trading
losses that arose from a historical contract. The availability of
the losses is subject to agreement with HMRC and therefore no
deferred tax asset has been recognised.
19 Share-based payments
The Group operates performance-related share incentive plans for
Executives, details of which are set out in the Directors'
Remuneration report. The Group also operates sharesave schemes. The
total charge for the year relating to employee share-based payment
plans was GBP3.4m (2022: GBP2.3m), all of which related to
equity-settled share-based payment transactions. After deferred
tax, the total charge was GBP3.3m (2022: GBP2.1m).
20 Other reserves and retained earnings
Other Retained
reserves earnings
Group Notes GBPm GBPm
---------------------------------------------------- ----- --------- ---------
At 30 June 2021 118.4 (39.8)
Profit for the year - 6.3
Dividends paid 8 - (6.3)
Share-based payments 19 - 2.3
Movement in fair value of PPP and other investments 12 - (0.9)
Purchase of own shares - (3.4)
Reversal of impairment of investment in Galliford
Try Limited and associated recycling of
retained earnings to merger reserve 13.8 (13.8)
---------------------------------------------------- ----- --------- ---------
At 30 June 2022 132.2 (55.6)
Profit for the year - 9.1
Dividends paid 8 - (9.6)
Share-based payments 19 - 3.4
Movement in fair value of PPP and other investments 12 - (2.4)
Purchase of own shares - (14.0)
Cancellation of shares 3.1 -
---------------------------------------------------- ----- --------- ---------
At 30 June 2023 135.3 (69.1)
---------------------------------------------------- ----- --------- ---------
The Group's other reserves relates to a merger reserve amounting
to GBP132.2m (2022: GBP132.2m) and a capital redemption reserve
totalling GBP3.1m (2022: GBPnil).
The purchase of own shares represents shares purchased by the
Galliford Try Employee Share Trust of GBP1.9m (2022: GBP3.4m) and
other share related transactions of GBP1.5m (2022:GBPnil), in
addition to GBP10.6m (2022: GBPnil) purchased as part of the share
buyback announced in September 2022.
21 Guarantees and contingent liabilities
Galliford Try Holdings plc has entered into financial guarantees
and counter indemnities in respect of bank and performance bonds
issued in the normal course of business on behalf of Group
undertakings, amounting to GBP165.5m (2022: GBP127.1m).
Disputes arise in the normal course of business, some of which
lead to litigation or arbitration procedures. While the outcome of
disputes and arbitration is never certain, the directors believe
that the resolution of all existing actions will not have a
material adverse effect on the Group's financial position.
The continuing evolution of Government legislation and guidance,
such as the Building Safety Act and its implications for cladding
solutions used on historical contracts, also creates ongoing
uncertainty that the Group manages.
Where the Group has received such claims, the directors have
made provision in the financial statements when they believe it is
probable a liability exists and it can be reliably estimated, but
no provision has been made where the Group's liability is
considered only possible or remote. This is based on the best
estimates of future costs to be incurred after assessing all
relevant information and taking legal advice where appropriate. The
Group's assessment of liability and estimates of future costs could
change in the future. Although the Group has appropriate insurance
arrangements in place that should mitigate any significant
exposure, the recognition thresholds under IAS 37 would mean a
liability could be recognised before a corresponding asset.
As Government legislation and guidance changes in the future,
the Group will reassess the estimates made accordingly.
22 Business combinations
During the year, the Group acquired (i) 100% of the share
capital MCS Control Systems Limited and (ii) certain contracts and
assets of Ham Baker Limited (in administration). The Group has also
finalised the acquisition accounting of nmcn having previously
reported the balances as provisional in accordance IFRS 3.
(i) MCS Control Systems Limited
On 8 July 2022, the Group acquired 100% of the share capital of
MCS Control Systems Limited ("MCS"), a leading systems integrator
to the industrial and utilities sectors for consideration of GBP1
settled in cash. The addition of MCS's capabilities is
complementary to the operations of Galliford Try's expanding
Environment business. In particular, MCS provides additional
competencies that complement those acquired in October 2021 with
nmcn's Water business and Lintott Control Systems Limited and will
accelerate the growth of Galliford Try Environment's asset
optimisation and capital maintenance strategy.
The goodwill of GBP3.2m arising from the acquisition is
significantly attributable to the acquired workforce and their
technical expertise and the opportunity to leverage this expertise
across the Group to enhance the asset optimisation and capital
maintenance strategy.
The following table summarises the consideration paid and the
provisional fair value of the assets acquired and liabilities
assumed.
GBPm
------------------------------------------------------------------- -----
Recognised amounts of identifiable assets acquired and liabilities
assumed
Property plant and equipment 0.1
Intangible assets 0.2
Right-of-use assets 0.6
Trade and other receivables 3.2
Trade and other payables (5.9)
Bank and other borrowings (0.8)
Lease liabilities (0.6)
Total identifiable net liabilities (3.2)
Goodwill 3.2
------------------------------------------------------------------- -----
Total -
------------------------------------------------------------------- -----
Consideration
Cash -
------------------------------------------------------------------- -----
Total -
------------------------------------------------------------------- -----
The acquisition contributed GBP5.7m of revenue and a loss before
tax and amortisation of GBP0.7m in the year to 30 June 2023, which
is similar to the contribution it would have made if acquired at
the start of the financial year.
(ii) Ham Baker
On 18 November 2022, the Group acquired certain contracts and
assets from Ham Baker Limited (in administration) for GBP225,000
settled in cash. The Group has acquired the asset inspection,
maintenance and screens and distributor operations. The acquired
business produces a variety of engineered products for the water
industry, which the Group will use as a basis to develop a low
carbon engineering offering, enabling products and raw materials to
be reused if possible, and reducing waste. The acquisition brings
complementary capabilities to the Group's growing Environment
business and will give it a further advantage in preparing for the
water industry's AMP8 cycle, in particular addressing storm
overflow challenges. It also plays into Galliford Try's role in
decarbonising the industry for a greener, more sustainable
future.
Similar to the MCS Control Systems Limited acquisition, the
goodwill of GBP0.5m arising from the acquisition is significantly
attributable to the acquired workforce and their technical
expertise and the opportunity to leverage this expertise across the
Group to enhance the asset optimisation and capital maintenance
strategy.
The following table summarises the consideration paid and the
provisional fair value of the assets acquired and liabilities
assumed.
GBPm
------------------------------------------------------------------- -----
Recognised amounts of identifiable assets acquired and liabilities
assumed
Intangible assets 0.1
Trade and other payables (0.4)
Total identifiable net liabilities (0.3)
Goodwill 0.5
------------------------------------------------------------------- -----
Total 0.2
------------------------------------------------------------------- -----
Consideration
Cash 0.2
Total 0.2
------------------------------------------------------------------- -----
The acquisition contributed revenue of GBP1.5m and a loss before
tax and amortisation of GBP1.6m in the year to 30 June 2023.
The performance of the business preceding the acquisition was
impacted by Ham Baker Limited entering administration, and
accordingly it is impracticable to assess the contribution it would
have made to the Group if acquired at the start of reporting
period.
(iii) nmcn
On 7 October 2021, the Group acquired the water business of nmcn
plc (which had been placed into administration) for GBP1.0m settled
in cash.
This expanded the Group's geographical presence on key
frameworks across the UK, and its capabilities in the water sector,
in line with the Group's strategy.
In accordance with IFRS 3, the Group has assessed the
acquisition accounting during the measurement period and has
identified the need to reflect a final adjustment to the reported
acquisition note in the 30 June 2022 annual report. The change
reflects an increase to the onerous contract provisions and net
unfavourable contracts acquired by GBP0.8m with an offsetting
increase in goodwill by GBP0.8m. As this is not material, the
adjustment has been recorded in the current year (with GBP11.0m
goodwill recognised in the previous year).
23 Post balance sheet events
There were no material post balance sheet events arising after
the reporting date.
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END
FR NKCBKOBKDPCD
(END) Dow Jones Newswires
September 20, 2023 02:00 ET (06:00 GMT)
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