6
MARCH 2024
GALLIFORD TRY HOLDINGS PLC
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER
2023
STRONG MOMENTUM AND CONTINUING GROWTH
Strategy and Outlook
· Secure outlook with
£3.7bn (H1 2023: £3.5bn) high
quality and focused order book.
· Excellent visibility over
future revenue with 98% and 83% of
projected FY24 and FY25 revenue secured.
· Sustainable Growth
Strategy on track to achieve our
targets ahead of plan.
· Capital Markets Event on 23
May 2024 to update strategy to 2030.
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Financial and Operational Highlights
· 21% increase in revenue to
£819m (H1 2023: £679m), with
growth in both Building and Infrastructure.
· 2.5% divisional operating
margin (H1
2023: 2.3%), with margin improvements in both Building and
Infrastructure, showing good progress against our strategic
target.
· 33% increase in profit
before tax to £15.6m (H1 2023:
£11.7m) before exceptional costs1.
· 33% increase in interim
dividend to 4.0p per share (H1
2023: 3.0p).
· Strong balance
sheet with operating cash inflow in
the period, average month-end cash for the period of £150m (H1
2023: £154m) and a PPP asset portfolio of £43.5m (June 2023:
£44.6m).
· Building business is making
progress in Private Rented and Affordable
Housing, recently appointed
to the £3.2bn Communities & Housing Investment Consortium
(CHIC) Newbuild Development Framework for affordable
homes.
· Environment business
continues to develop its capabilities including the acquisition of mechanical and electrical
engineering specialists AVRS Systems.
· Highways business
appointed to the Generation 5 Civil
Engineering, Highways and Transportation Collaborative Framework
2024-2028.
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H1 2024
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H1 2023
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Change
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Revenue
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£819m
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£679m
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+£140m
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Operating profit before
amortisation1
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£14.1m
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£10.8m
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+£3.3m
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Divisional operating
margin2
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2.5%
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2.3%
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+0.2ppt
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Profit before
tax1
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£15.6m
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£11.7m
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+£3.9m
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Statutory profit before
tax
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£13.0m
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£7.2m
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+£5.8m
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Earnings per
share1
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13.2p
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8.8p
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+4.4p
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Statutory earnings per
share
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11.3p
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5.5p
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+5.8p
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Interim dividend per
share
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4.0p
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3.0p
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+33%
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Average month end cash
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£150m
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£154m
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£(4)m
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Order book
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£3.7bn
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£3.5bn
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+£0.2bn
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1. Stated before
exceptional items. Exceptional items of £2.6m relate only to our
investment in cloud-based computer software (H1 2023:
£4.5m).
2. Divisional
operating margin is defined as pre-exceptional operating profit
before amortisation as a percentage of revenue. It is stated for
the combined Building and Infrastructure divisions.
Bill Hocking, Chief
Executive, commented:
"I am very pleased with the
Group's performance in the first half of the financial year.
There is strong momentum in the business and our continued
excellent performance is a reflection of our disciplined strategy,
committed people and long established relationships with our supply
chain and clients.
The Group has delivered increased
revenue and divisional operating margin, as we make accelerated
progress towards our strategic objectives, and we will continue to
provide long-term sustainable value for our
stakeholders.
Our strong and high quality order
book, predominantly in long term frameworks, provides visibility
and security of future workloads and continued growth prospects
well beyond the current financial year. Our performance, over
the last three years, together with our excellent people and our
strong balance sheet, gives us confidence to announce our updated
strategy to 2030 at a Capital Markets Event on 23 May
2024."
Enquiries to:
Galliford Try
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Bill Hocking, Chief
Executive
Andrew Duxbury, Finance
Director
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01895 855001
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Teneo
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James Macey White
Victoria Boxall
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020 7353 4200
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This announcement contains inside
information. The person responsible for making this announcement on
behalf of Galliford Try is Kevin Corbett, General Counsel &
Company Secretary.
Galliford Try will hold a Capital
Markets Event on 23 May 2024 and its next Trading Update is
scheduled for 11 July 2024.
Presentations
A conference call for analysts and
institutional investors will be held at 09:30am GMT today,
Wednesday 6 March 2024. To register for this event please follow
this link:
Conference call
registration
Should you wish to ask a question,
please dial-in on +44 (0) 33 0551 0200 quoting 'Galliford Try' when
prompted by an operator, as 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 Friday 8 March 2024 at
09:00am GMT. Investors can register for the event via this
link:
https://www.investormeetcompany.com/galliford-try-holdings-plc/register-investor
SUSTAINABLE GROWTH STRATEGY
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. Announced
in September 2021, we are making strong progress against our 2026
financial targets:
Objective
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KPI
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Target (2026)
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Earning a sustainable return on the value we
deliver.
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Focus on bottom line margin growth
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Divisional operating
margin growth to 3.0%
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Disciplined contract selection and
sustainable revenue growth
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Revenue growth
towards £1.6bn
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Maintain strong balance sheet
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Operating cash generation
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Sustainable dividends
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Dividend cover of
1.8x
earnings
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Given the successful performance
against our current strategy the Group intends to update its strategy to 2030 at a Capital Markets
Event on 23 May 2024.
RISK MANAGEMENT AND ORDER BOOK
The Group's strategy is founded on
commercial discipline and robust risk management. Our
confidence in the Group's future performance is based on our high
quality order book, underpinned by management's discipline and
focus, and our robust long term pipeline of opportunities.
Our sector focus means 81% of contracts are delivered through
frameworks providing a reliable stream of long term future work
built on relationships with clients on known terms, conditions and
risk profile.
At 31 December 2023 the Group's
order book was £3.7bn (H1 2023: £3.5bn) of which 87% is in the
public and regulated sectors and 13% is in the private sector.
98% of projected revenue for the current financial year is
secured, and 83% is already secured for the next financial year (H1
2023: 95% and 79% respectively).
OUTLOOK
The Group has a strong and
consistent track record and a predominant focus on the public and
regulated sectors. The UK's planned, and required, investment
in economic and social infrastructure continues to support growth
in our chosen markets. Our recent acquisition of AVRS Systems
together with the acquired specialist businesses, MCS Control
Systems and Ham Baker, further enhance our Environment business's
client offering in the key areas of off-site build and asset
optimisation.
Our future outlook is supported by
recent framework and project wins as well as the robust and
resilient pipeline of opportunities we see across our chosen
sectors.
The Group enters the second half
of the year with strong momentum and confidence for the financial
year to 30 June 2024 and the longer term.
DIVIDEND AND CAPITAL ALLOCATION
The directors have reviewed the
Group's results and outlook for the current financial year and have
declared an interim dividend of 4.0p per share which will be paid
on 12 April 2024 to shareholders on the register at the close of
business on 15 March 2024.
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 is 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
management of past inflationary pressures demonstrates 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 acquisition of AVRS Systems. Our strong cash balance 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 led to an improved dividend policy, announced in September
2023, 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. In September
2022, having reviewed the Group's strong cash performance and
ongoing capital requirements the Group launched a share buyback
programme of up to a maximum of £15m. On 17 November 2023 we
announced the completion of the share buyback programme with a
total of 8,404,148 shares repurchased and subsequently cancelled,
representing approximately 7.5% of issued share capital. In
addition to this, the Group paid a special dividend of 12.0 pence
per share (amounting to £12.5m) on 27 October 2023 as announced on
8 June 2023. 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.
FINANCIAL REVIEW
During the first half of the year,
the Group delivered a strong performance resulting in a significant
increase in revenue and profit before tax, as well as improved
divisional operating margin. Our operating performance, strong
financial position and high quality order book provide confidence
in our future performance.
Revenue for the half year to 31
December 2023 increased 21% to £819.1m (H1 2023: £679.2m).
This reflects revenue increases in both Building and
Infrastructure. The procurement delays experienced by our Building
business in 2022 have ended and the contracts awarded in 2023 are
now on site, resulting in increased revenue in Building. Our
Environment business continues to benefit from high levels of AMP7
spending by our water sector clients.
Pre-exceptional operating profit
before amortisation increased by 31% to £14.1m (H1 2023: £10.8m).
The combined divisional operating margin was 2.5% (H1 2023: 2.3%),
with improvement in both Building and Infrastructure as we make
further progress towards our 3.0% target. Building generated
a profit of £10.6m (H1 2023: £9.3m), representing an operating
margin of 2.4% (H1 2023: 2.3%). Infrastructure generated a
profit of £9.3m (H1 2023: £6.5m), representing an operating margin
of 2.6% (H1 2023: 2.3%).
There was a £5.8m pre-exceptional
operating cost in aggregate across Investments and Central Costs
(H1 2023: £(5.0)m). Investments includes initial development fees
from its first co-development Private Rental Scheme reaching
financial close, while the comparative period included a £3.6m
one-off profit on the disposal of an interest in a joint venture
entity. Central Costs were slightly lower at £6.1m (H1 2023:
£6.5m). Net interest income was £2.7m (H1
2023: £2.4m), with the increase largely a result of improved
interest rates partly offset by increased IFRS16 lease interest
charges.
Pre-exceptional profit before tax
was £15.6m (H1 2023: £11.7m). Exceptional items of £2.6m (H1 2023:
£4.5m) have been incurred in the period, enhancing our digital and
data capabilities, in relation to our investment in cloud-based
digital finance and commercial systems. The new systems
successfully went into operation in September 2023. Full details
are set out in note 6 to the financial information.
Post-exceptional profit before tax was £13.0m (H1 2023:
£7.2m).
The pre-exceptional taxation
charge of £2.3m reflects a forecast effective tax rate of 19.7% (H1
2023: 19.6%) for the year to 30 June 2024, after allowing for prior
year tax adjustments, which compares to the standard effective tax
rate of 25.0%.
Based on pre-exceptional earnings
per share of 13.2p (H1 2023: 8.8p), and the outlook for the
remainder of the financial year, the Board has declared an interim
dividend of 4.0p per share (H1 2023: 3.0p).
The Group is well capitalised,
maintaining its focus on disciplined cash management in line with
the Board's key capital allocation objectives. The Group
operates with daily net cash, no debt facilities, and no defined
benefit pension liabilities. Average month end cash balances for
the first half year were strong at £150m and the Board anticipates
that average cash for the full year to 30 June 2024 will be at a
similar level.
The Group also benefits from a PPP
asset portfolio of £43.5m, reflecting a blended 7.3% discount rate
and generating interest income.
The Group is able to adopt
appropriate discipline and risk management when sourcing new work
supported by our strong balance sheet which is also important in
providing confidence to our clients, staff and supply chain.
We are committed to pursuing a collaborative and
open approach with our supply chain. Our performance under the
Prompt Payment Code continues to remain strong, with 97% of
invoices paid within 60 days in the period (H1 2023: 98%) and
average payment being made in 24 days (H1 2023: 26
days).
OPERATIONAL REVIEW
Building
The Group's Building business
operates through regional offices, serving a range of public and
commercial clients across the UK, with a focus on our core and proven
strengths in the Education, Defence and Custodial, Health and
Commercial sectors. Building has a substantial presence in Scotland
operating as Morrison Construction. Our Facilities Management
business complements these operations by providing building
maintenance services and we continue to grow the capabilities of
this operation, with a specific focus on decarbonising existing
buildings through retrofit and other enhancements.
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H1 2024
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H1
2023
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Change
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Revenue (£m)
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446.0
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399.7
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12%
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Operating profit before amortisation
(£m)
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10.6
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9.3
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14%
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Operating margin (%)
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2.4
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2.3
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0.1ppt
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Order book (£bn)
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2.2
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2.1
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5%
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Building's revenue was up 12% to
£446.0m (H1 2023: £399.7m) with operating profit before
amortisation of £10.6m (H1 2023: £9.3m), resulting in an
improved operating margin of 2.4% (H1 2023: 2.3%). Revenue
has grown, as expected, as we now benefit from the volume of new
work that was delayed by inflation and public sector procurement
challenges in 2022. We continue to target margin progression, with
the improvement in the period reflecting the performance of
projects across the business and our strategy of focusing on bottom
line growth.
Building has won a place on the
£2.5bn Lot 2 of the eight-year framework, for new build projects
worth more than £10m, and the £650m Lot 3, for regeneration
projects, on behalf of the Communities & Housing Investment
Consortium (CHIC). Galliford Try anticipates accessing the
framework to build low and medium rise affordable apartments,
building on its existing capabilities in the build to rent
market.
Building currently has an order
book of £2.2bn (H1 2023: £2.1bn), including 27% in Education, 31%
in Defence and Custodial, 15% in Facilities Management and 4% in
Health.
Infrastructure
Our Infrastructure businesses,
primarily Highways and Environment (incorporating principally our
activities in water and wastewater), carry out critical engineering
projects across the UK. This business has established
long-term relationships with customers where we have a strong track
record on delivery, focusing on public and regulated sector work
and bids with early contractor
involvement.
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H1 2024
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H1
2023
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Change
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Revenue (£m)
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362.0
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276.6
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31%
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Operating profit before amortisation
(£m)
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9.3
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6.5
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43%
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Operating margin (%)
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2.6
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2.3
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0.3pt
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Order book (£bn)
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1.5
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1.4
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7%
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Infrastructure revenue was up 31%
to £362.0m (H1 2023: £276.6m) with operating profit before
amortisation and exceptional items of £9.3m (H1 2023: £6.5m),
resulting in an improved operating margin of 2.6% (H1 2023:
2.3%).
Our growing Environment business,
including the acquisition of AVRS Systems in the period, provides
enhanced and specialist service delivery across UK operations
including water, engineering, off-site build and asset
optimisation, and asset security. This enhanced capability
puts the Environment business in a strong position to support our
clients accelerate the use of digital technologies as well as
improve efficiencies across the lifecycle of the UK's water and
wastewater infrastructure. The increase in revenue reflects the
particularly high level of activity across our Environment
business, as we continue to deliver on our AMP7
frameworks.
Our growing Highways business
delivers vital infrastructure across the strategic road network,
helping connect communities through a range of integrated transport
solutions. The Highways business has secured a place on Lot 4 of
the new £500m Generation 5 (Gen5) Civil Engineering, Highways and
Transportation Collaborative Framework 2024-2028, managed by
Hampshire County Council. The four-year framework, for
projects worth from £20-£175m, comprises civil engineering,
transportation and infrastructure development-related
construction.
Infrastructure currently has an
order book of £1.5bn (H1 2023: £1.4bn) comprising £562m in Highways
and £894m in Environment.
Investments
Investments delivers major
building and infrastructure projects through public private
partnerships and the co-development of Private Rented Sector (PRS)
projects, generating work for the wider Group in the process.
The business reached financial close, and has commenced
construction, on its first PRS scheme in Cardiff during the
period.
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H1 2024
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H1
2023
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Change
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Revenue (£m)
|
11.1
|
2.9
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283%
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Operating profit (£m)
|
0.3
|
1.5
|
£(1.2)m
|
Asset valuation (£m)
|
43.5
|
46.1
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£(2.6)m
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Net interest income (£m)
|
1.9
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2.0
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(5)%
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For the first half of the
financial year, revenue was £11.1m (H1 2023: £2.9m) with an
operating profit of £0.3m (H1 2023: £1.5m). This includes the
recognition of initial development fees related to the financial
close of the PRS scheme referred to above as well as the ongoing
project management fees associated with the construction of the
scheme itself. In H1 2023, operating profit included £3.6m
relating to the profit on disposal of our interest in a joint
venture arrangement.
At 31 December 2023 the Group
directors' valuation of our PPP portfolio was £43.5m (H1 2023:
£46.1m), reflecting a blended 7.3% discount rate (H1 2023:
7.1%). These assets contribute to our balance sheet strength
and generated interest income in the period of £1.9m (H1 2023:
£2.0m).
Environment, Social and Governance (ESG)
Sustainability underpins our
long-term success as it helps us to win work, engages our
employees, benefits communities and the environment, and makes us
more efficient. This is why our sustainability commitments are an
integral part of delivering our growth strategy. 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
The health, safety and wellbeing
of our staff, subcontractors, suppliers, clients and the public
remains the Group's top priority.
We continue to focus on our
pursuit of 'no harm' through our Back to Basics approach of Right
Person, Right Planning, Right Tools and Equipment and Right
Workplace. Pleasingly, our accident frequency rate fell in the
period.
Our behavioural safety programme,
Challenging Beliefs, Affecting Behaviour (CBAB), based on
awareness, training, coaching and visible leadership, forms the
backbone of our approach. This year, we launched our latest CBAB
update module which focuses on the correlation between quality and
health and safety and the parallels between both. We also continued
our quarterly CBAB Coach Forums on site, which cover the role of
the Coach and what tools we can utilise to continue pushing the
message with regard to driving a positive safety
culture.
We were delighted that our 'Choose
the Safe Path' training programme, aligned to CBAB, which involves
employees determining the outcome of site-based scenarios to
prevent incidents using immersive virtual reality technology won
the prestigious Princess Royal Training Award delivered by City and
Guilds Foundation.
People
In line with our retain and gain
people strategy and as part of our aim to become a destination
employer, we recently launched our, Grow Together People Pledge,
(our Employee Value Proposition), which encapsulates a promise to
our people, both existing and potential employees, to support our
journey to be a progressive and people orientated
employer.
We continue to place a focus on
the future of the construction industry, and we are proud to be one
of only 20 employers to have been awarded the new Platinum
membership of The 5% Club which recognises the business's
commitment to inclusion and social mobility, future growth of 'earn
as you learn' opportunities and the quality of training and
development. We have also been voted the best Construction and
Civil Engineering company for Graduates, and number two for
Apprentices, by The Job Crowd.
Equity, Diversity, and Inclusion
(ED&I) continues to be a key focus and our ED&I team
continues to work in conjunction with The Clear Assured Company, a
global diversity and inclusion specialist to ensure we continuously
embed the most inclusive practices across our organisation. Key
developments in this area have been the design and commencement of
Inclusive Leadership Training modules and a commitment to support
the construction industry to achieve a more equal gender by taking
steps to understand the potential barriers to the employment and
progression of women in our industry and take action on
these.
We continue to recognise the
importance of positive health and wellbeing, and have recently
launched the next evolution of our 'Be Well' wellbeing programme to
ensure it continues to be up to date, is accessible to all,
including our supply chain, and the approach is truly embedded
within the business.
Environment and Climate Change
We recognise the importance of the
climate change agenda and the role we have to play in decarbonising
the economy for a greener, more sustainable future.
Our near-term carbon reduction
targets have been validated by the Science Based Targets Initiative
(SBTi) and we are determined to be aligned with a 1.5°C trajectory,
the most ambitious designation available through the SBTi process.
Our near-term SBTs support our ambition to achieve net zero carbon
across our own operations (Scope 1 and 2) by 2030 and across all
activities (Scope 1, 2 and 3) by 2045 at the latest.
We continue to participate in the
Carbon Disclosure Project (CDP), a global disclosure system for
organisations to manage their environmental impacts and in 2023, we
achieved an improved score of B 'Management level', (2022 score: C
'Awareness level'), recognising the progress we are making in
embedding climate action into our governance, strategy and
operations.
We are on target to achieve PAS
2080 Carbon Management in Buildings and Infrastructure
certification by 2025 and continue to embed carbon management into
our management and operational processes.
We recognise that managing our
environmental impact goes beyond reducing carbon emissions and we
have established cross-business working groups on issues including
biodiversity, waste and green site set up. All our businesses
are developing environmental strategies tailored to the nature of
their operations, which will include objectives, baselines and
targets for areas such as waste, energy use and water
consumption.
We have also reviewed and updated
our biodiversity 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 the right thing to do as a responsible
business and remains an important priority for our clients. Since
we began reporting social value in 2022, we have delivered
over £650m in social and local economic
value through a combination of providing work for the local supply
chain, providing opportunities for training and apprenticeships and
job creation.
Last year, we took part in
'Unlocking Construction', which is developed by New Futures Network
- part of HM Prisons and Probation Service, to promote careers and
opportunities within the industry to prison leavers, aimed at
helping sectors like construction fill skills gaps, while promoting
positive change to prisoners, reducing the likelihood of repeat
offending and benefiting wider society. We have now appointed an
Outreach Partner who is building relationships with prisons to
increase our engagement, delivering employability workshops and
Release on Temporary Licence work placements.
Working in partnership with the
Department for Work and Pensions, we have developed the Mentoring
the Next Generation programme which aims to encourage more females
to explore a career in construction through face-to-face
presentations, mentoring, careers awareness and skill-building over
the course of a structured three-year programme. At the end of the
programme, we offer interviews for roles at Galliford
Try.
We continue to take part in the
Considerate Constructors Scheme (CCS), which assesses sites on
criteria including being considerate of local neighbourhoods and
the public and we achieved an average CCS audit score of 42.7 in
the six months to December 2023, which remained above the industry
average of 40.4.
Clients
Providing excellent service for
our clients includes the ability to unlock new and innovative
methods to deliver high quality, low carbon, value for money
projects. Our approach is reflected by the fact that 88% of our
order book is repeat business (H1 2023: 92%).
A key aspect of our drive for
excellence is how we embrace modern methods of construction, use
resources more efficiently and analyse sustainable alternatives.
Our Morrison Construction business is using lower carbon Electric
Arc Furnace steel, reducing the embodied carbon of projects.
Electric Arc Furnace steel significantly reduces the quantity of
fossil fuels by using electrical processes and higher percentages
of recycled content. The process creates a 77% carbon saving
compared to traditional alternatives. The first scheme to feature
this steel is our Easthouses Primary School project for Midlothian
Council.
Our Infrastructure business has
trialled a concrete monitoring system on our A303 project for
National Highways. The sensors placed in the concrete pour provide
real time monitoring for anyone involved in the project. The system
demonstrates when the concrete reaches the correct strength,
helping to accelerate the construction programme, improve quality
and reduce costs.
Our focus on providing excellent
service for our clients has seen our business named Contractor of
the Year for the third time at the Education Estates Awards. The
award recognises the success of the business, and the progress we
have made in producing Net Zero Carbon in Operation schools for the
Department for Education.
Supply Chain
As a signatory of the Prompt
Payment Code, we are committed to paying 95% of supply chain
invoices within 60 days. We continue to
outperform this target, with 97% of invoices paid within 60 days in
the latest six months to 31 December 2023 (January to June 2023:
98%) and the average days to pay now 24 days (January to June 2023:
26 days), maintaining our position in the
top 10 contractors in Build UK's league table. The implementation
of a new ERP system during H1 2024 has had a short-term negative
impact on performance against the target of paying 95% of invoices
from suppliers with fewer than 50 employees within 30 days, with
81% paid within 30 days (January to June 2023: 87%), however we
expect this metric to improve again over the next financial
year.
We continue to enhance our
procedures to minimise the risk of modern slavery within our
operations and supply chain and use the UK Government Modern
Slavery Assessment tool to assess our performance and identify
opportunities for improvement. As part of this ongoing improvement,
we will be commencing an audit of our preferred supplier labour
agencies to assess their compliance, financial stability, and
ethical practices.
We continue to retain Gold status
from the Supply Chain Sustainability School, an award-winning
collaboration designed to upskill its members through free training
and resources covering sustainability, off-site manufacturing,
Building Information Modelling (BIM), Lean and
Management.
PRINCIPAL RISKS AND UNCERTAINTIES
The directors consider that the
principal risks and uncertainties which may have a material impact
on the Group's performance in the second half of the financial year
remain primarily the same as those outlined on pages 53 to 56 of
the Group's annual report and financial statements for the year
ended 30 June 2023. Those risks the Group considers to be of
particular importance and highlighted as the principal risks in
focus within the 30 June 2023 annual report are; work winning,
project delivery, resources and regulatory
compliance.
BOARD
As previously announced Andrew
Duxbury, Group Finance Director, will leave the Group during the
year. The Group is making good progress on securing Andrew's
replacement and we expect to provide an update shortly. As
previously announced, Marisa Cassoni, Non-executive Director and
Chair of the Audit Committee, was appointed Senior Independent
Director with effect from 1 November 2023. Also, as
previously announced, Kevin Boyd joined the Board as a
Non-executive director on 1 March 2024. On appointment Kevin
became a member of the audit, remuneration and nomination
committees.
Condensed consolidated income statement
for the half year ended 31
December 2023 (unaudited)
|
|
Half year
to
31 December
2023
|
Half
year to
31
December 2022
|
Year
to
30 June
2023 (audited)
|
|
|
Pre-exceptional
items
|
Exceptional
items
(note 6)
|
Total
|
Pre-exceptional items
|
Exceptional items
(note
6)
|
Total
|
Pre-exceptional items
|
Exceptional items
(note
6)
|
Total
|
Notes
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
4
|
819.1
|
-
|
819.1
|
679.2
|
-
|
679.2
|
1,393.7
|
-
|
1,393.7
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
(758.4)
|
-
|
(758.4)
|
(634.0)
|
-
|
(634.0)
|
(1,292.3)
|
-
|
(1,292.3)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
60.7
|
-
|
60.7
|
45.2
|
-
|
45.2
|
101.4
|
-
|
101.4
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
5
|
-
|
-
|
-
|
3.6
|
-
|
3.6
|
3.6
|
-
|
3.6
|
Administrative expenses
|
|
(47.8)
|
(2.6)
|
(50.4)
|
(39.5)
|
(4.5)
|
(44.0)
|
(86.1)
|
(10.5)
|
(96.6)
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of financial
assets
|
13
|
-
|
-
|
-
|
-
|
-
|
-
|
(2.8)
|
-
|
(2.8)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
|
12.9
|
(2.6)
|
10.3
|
9.3
|
(4.5)
|
4.8
|
16.1
|
(10.5)
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
7
|
4.3
|
-
|
4.3
|
3.2
|
-
|
3.2
|
6.3
|
-
|
6.3
|
Finance costs
|
7
|
(1.6)
|
-
|
(1.6)
|
(0.8)
|
-
|
(0.8)
|
(1.8)
|
-
|
(1.8)
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before income tax
|
|
15.6
|
(2.6)
|
13.0
|
11.7
|
(4.5)
|
7.2
|
20.6
|
(10.5)
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense)/
credit
|
8
|
(2.3)
|
0.6
|
(1.7)
|
(2.3)
|
1.0
|
(1.3)
|
(3.1)
|
2.1
|
(1.0)
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the period from continuing
operations
|
|
13.3
|
(2.0)
|
11.3
|
9.4
|
(3.5)
|
5.9
|
17.5
|
(8.4)
|
9.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
- Profit from continuing operations
attributable to ordinary shareholders
|
|
|
|
|
|
|
|
10
|
13.2p
|
|
11.3p
|
8.8p
|
|
5.5p
|
16.6p
|
|
8.7p
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
- Profit from continuing
operations attributable to ordinary shareholders
|
|
|
|
|
|
|
|
10
|
12.7p
|
|
10.8p
|
8.2p
|
|
5.1p
|
15.6p
|
|
8.1p
|
|
|
|
|
|
|
|
|
|
|
|
The notes are an integral part of
the condensed consolidated financial statements.
Condensed consolidated statement of comprehensive
income
for the half year ended 31
December 2023 (unaudited)
|
|
Half year
to
31
December
2023
|
Half
year to
31
December
2022
|
Year
to
30 June
2023
(audited)
|
|
Notes
|
£m
|
£m
|
£m
|
Profit for the period
|
|
11.3
|
5.9
|
9.1
|
|
|
|
|
|
Other comprehensive expense:
|
|
|
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
Movement in fair value of PPP and
other investments - continuing operations
|
12
|
(0.4)
|
(1.0)
|
(2.4)
|
|
|
|
|
|
Other comprehensive expense for the period net of
tax
|
|
(0.4)
|
(1.0)
|
(2.4)
|
|
|
|
|
|
Total comprehensive income for the period
|
|
10.9
|
4.9
|
6.7
|
The notes are an integral part of
the condensed consolidated financial statements.
Condensed consolidated balance sheet
at 31 December 2023
(unaudited)
|
|
31 December
2023
|
31
December 2022
|
30 June
2023
(audited)
|
|
Notes
|
£m
|
£m
|
£m
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Intangible assets
|
19
|
5.3
|
7.6
|
5.6
|
Goodwill
|
11
|
93.5
|
92.9
|
92.7
|
Property, plant and
equipment
|
|
5.6
|
7.0
|
7.2
|
Right of use assets
|
|
41.0
|
27.6
|
38.6
|
Investments in joint
ventures
|
|
-
|
0.1
|
-
|
PPP and other investments
|
12
|
43.5
|
46.1
|
44.6
|
Deferred income tax
assets
|
|
15.3
|
13.4
|
15.5
|
Total non-current assets
|
|
204.2
|
194.7
|
204.2
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
13
|
325.9
|
264.3
|
286.5
|
Current income tax assets
|
|
2.0
|
3.1
|
1.8
|
Cash and cash equivalents
|
|
209.2
|
195.8
|
220.2
|
Total current assets
|
|
537.1
|
463.2
|
508.5
|
Total assets
|
|
741.3
|
657.9
|
712.7
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
14
|
(567.5)
|
(476.1)
|
(525.1)
|
Lease liabilities
|
|
(16.4)
|
(11.2)
|
(14.9)
|
Provisions for other liabilities and
charges
|
15
|
(28.8)
|
(26.6)
|
(29.9)
|
Total current liabilities
|
|
(612.7)
|
(513.9)
|
(569.9)
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
|
(26.3)
|
(16.7)
|
(24.2)
|
Total non-current
liabilities
|
|
(26.3)
|
(16.7)
|
(24.2)
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
(639.0)
|
(530.6)
|
(594.1)
|
Net
assets
|
|
102.3
|
127.3
|
118.6
|
|
|
|
|
|
Equity
|
|
|
|
|
Ordinary share capital
|
|
51.3
|
54.3
|
52.4
|
Other reserves
|
|
136.4
|
133.4
|
135.3
|
Retained earnings
|
|
(85.4)
|
(60.4)
|
(69.1)
|
|
|
|
|
|
Total shareholders' equity
|
|
102.3
|
127.3
|
118.6
|
The notes are an integral part of
the condensed consolidated financial statements.
These condensed consolidated
financial statements were approved by the Board of Directors on 6
March 2024.
Condensed consolidated statement of changes in
equity
for the half year ended 31
December 2023 (unaudited)
|
Notes
|
Ordinary
share capital
£m
|
Other
reserves
£m
|
Retained
earnings
£m
|
Total
shareholders' equity
£m
|
As
at 31 December 2023
|
|
|
|
|
|
At 30 June 2023
|
|
52.4
|
135.3
|
(69.1)
|
118.6
|
|
|
|
|
|
|
Profit for the period
|
|
-
|
-
|
11.3
|
11.3
|
Other comprehensive
expense
|
|
-
|
-
|
(0.4)
|
(0.4)
|
Total comprehensive expense for the
period
|
|
-
|
-
|
10.9
|
10.9
|
Transactions with owners:
|
|
|
|
|
|
Dividends
|
9
|
-
|
-
|
(20.2)
|
(20.2)
|
Share-based payments
|
|
-
|
-
|
0.5
|
0.5
|
Tax relating to share-based
payments
|
|
|
|
1.5
|
1.5
|
Purchase of own shares
|
10
|
-
|
-
|
(9.0)
|
(9.0)
|
Cancellation of
shares
|
10
|
(1.1)
|
1.1
|
-
|
-
|
At
31 December 2023
|
|
51.3
|
136.4
|
(85.4)
|
102.3
|
|
|
|
|
|
|
As
at 31 December 2022
|
|
|
|
|
|
At 30 June 2022
|
|
55.5
|
132.2
|
(55.6)
|
132.1
|
|
|
|
|
|
|
Profit for the period
|
|
-
|
-
|
5.9
|
5.9
|
Other comprehensive
expense
|
|
-
|
-
|
(1.0)
|
(1.0)
|
Total comprehensive income for the
period
|
|
-
|
-
|
4.9
|
4.9
|
Transactions with owners:
|
|
|
|
|
|
Dividends
|
9
|
-
|
-
|
(6.4)
|
(6.4)
|
Share-based payments
|
|
-
|
-
|
1.8
|
1.8
|
Purchase of own shares
|
10
|
-
|
-
|
(5.1)
|
(5.1)
|
Cancellation of shares
|
10
|
(1.2)
|
1.2
|
-
|
-
|
At 31 December 2022
|
|
54.3
|
133.4
|
(60.4)
|
127.3
|
|
|
|
|
|
|
As
at 30 June 2023 (audited)
|
|
|
|
|
|
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
|
9
|
-
|
-
|
(9.6)
|
(9.6)
|
Share-based payments
|
|
-
|
-
|
3.4
|
3.4
|
Purchase of shares
|
10
|
-
|
-
|
(14.0)
|
(14.0)
|
Cancellation of shares
|
10
|
(3.1)
|
3.1
|
-
|
-
|
At
30 June 2023
|
|
52.4
|
135.3
|
(69.1)
|
118.6
|
The notes are an integral part of
the condensed consolidated financial statements.
Condensed consolidated statement of cash
flows
for the half year ended 31
December 2023 (unaudited)
|
Notes
|
Half year to
31 December 2023
£m
|
Half year to
31 December 2022
£m
|
Year to
30 June 2023 (audited)
£m
|
Cash flows from operating activities
|
|
|
|
|
Profit for the period
|
|
11.3
|
5.9
|
9.1
|
Adjustments for:
|
|
|
|
|
Income tax expense
|
|
1.7
|
1.3
|
1.0
|
Net finance income
|
|
(2.7)
|
(2.4)
|
(4.5)
|
Depreciation and amortisation
|
|
9.6
|
8.1
|
17.1
|
Profit on disposal of joint venture
|
|
-
|
(3.6)
|
(3.6)
|
Share-based payments
|
|
0.5
|
1.8
|
3.4
|
Impairment of financial asset
|
|
-
|
-
|
2.8
|
Other non-cash movements
|
|
(0.5)
|
-
|
(0.2)
|
Net cash generated from operations before changes in
working capital
|
|
19.9
|
11.1
|
25.1
|
(Increase)/decrease in trade and other
receivables
|
|
(36.7)
|
(16.0)
|
(43.3)
|
Increase/(decrease) in trade and other payables
|
|
42.8
|
(1.7)
|
47.7
|
(Decrease)/increase in provisions
|
|
(1.1)
|
(0.8)
|
2.5
|
Net cash (used in)/generated from operations
|
|
24.9
|
(7.4)
|
32.0
|
Interest received
|
|
3.0
|
3.2
|
6.3
|
Interest paid
|
|
(1.6)
|
(0.8)
|
(1.8)
|
Corporation tax paid
|
|
(0.2)
|
(0.5)
|
(1.0)
|
Net cash generated/(used in) from operating
activities
|
|
26.1
|
(5.5)
|
35.5
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Dividends received from joint ventures and
associates
|
|
-
|
-
|
0.3
|
Increase in amounts due from joint ventures
|
|
(2.0)
|
(1.8)
|
-
|
Decrease in amounts due from joint ventures
|
|
-
|
-
|
0.2
|
Proceeds from disposal of joint venture
|
|
-
|
3.6
|
3.6
|
PPP loan repayments
|
|
0.7
|
0.4
|
0.5
|
Acquisition of business combination, net of
cash/borrowings
|
19
|
(3.7)
|
(1.0)
|
(1.0)
|
Proceeds from disposal of subsidiary, net of cash
|
21
|
1.8
|
-
|
-
|
Acquisition of property, plant and equipment
|
|
(0.6)
|
(1.1)
|
(2.2)
|
Net cash generated from investing activities
|
|
(3.8)
|
0.1
|
1.4
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Repayment of lease liabilities
|
|
(7.6)
|
(6.2)
|
(12.0)
|
Purchase of own shares
|
|
(5.5)
|
(5.1)
|
(14.0)
|
Dividends paid to Company shareholders
|
|
(20.2)
|
(6.4)
|
(9.6)
|
Net cash used in financing activities
|
|
(33.3)
|
(17.7)
|
(35.6)
|
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents
|
|
(11.0)
|
(23.1)
|
1.3
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
220.2
|
218.9
|
218.9
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
209.2
|
195.8
|
220.2
|
The notes are an integral part of
the condensed consolidated financial statements.
Notes to the condensed consolidated half year financial
statements
for the half year ended 31
December 2023 (unaudited)
1
Basis of preparation
Galliford Try Holdings plc is a
public limited company incorporated in England and Wales and
domiciled in the UK. The address of its registered office is Blake
House, 3 Frayswater Place, Cowley, Uxbridge, Middlesex, UB8 2AD.
The Company has its listing on the London Stock Exchange. This
condensed consolidated half year financial information was approved
for issue on 6 March 2024.
This condensed consolidated half
year financial information does not comprise statutory financial
statements within the meaning of Section 434 of the Companies Act
2006. Statutory financial statements for the year ended 30
June 2023 were approved by the board of directors on 20 September
2023
and delivered to the Registrar of
Companies. The report of the auditors on those financial statements
was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under Section 498 of the
Companies Act 2006. This condensed consolidated half year financial
information has been reviewed, not audited. The auditors' review
opinion is included in this report.
This condensed consolidated half
year financial information for the half year ended 31 December 2023
has been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority and with UK
adopted International Accounting Standard 34, "Interim financial
reporting". The condensed consolidated half year financial
information should be read in conjunction with the annual financial
statements for the year ended 30 June 2023, which have been
prepared in accordance with UK adopted International Accounting
Standards.
The Group's activities, together
with the factors likely to affect the future development,
performance and position of the business are set out in this half
year report. The annual financial statements for the year ended 30
June 2023 included the Group's objectives, policies and processes
for managing capital, its financial risk management objectives,
details of its financial instruments and hedging activities and its
exposure to credit risk and liquidity risk.
After making enquiries, the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for at least twelve
months from the date of signing the condensed consolidated half
year information, and accordingly continue to adopt the going
concern basis of preparation.
2
Accounting policies
The accounting policies applied
are consistent with those of the annual financial statements for
the year ended 30 June 2023. There are no new standards effective
for the first time in the period beginning 1 July 2023 which have a
material impact on the Group's reported results.
Critical accounting estimates and
judgements
The Group's principal judgements
and key sources of estimation uncertainty remain unchanged since
the year-ended 30 June 2023. The principal judgements and key
sources of estimation uncertainty are set out in note 1 on pages
136 - 137 of the annual financial statements for the year ended 30
June 2023.
The Group's five largest unagreed
variations and claims positions as at 31 December 2023 are
summarised in aggregate below.
|
£m
|
Overall contract value (including
total estimated end of contract variations and claims after IFRS 15
constraints)
|
533.8
|
Revenue in the period
|
58.9
|
Total estimated end of contract
variations and claims before IFRS 15 constraints
|
104.8
|
Total estimated end of contract
variations and claims after IFRS 15 constraints
|
34.9
|
These five positions represent the
most significant estimates of revenue. The total estimated end of
contract variations and claims after IFRS 15 constraints of the
subsequent five largest positions is £15.0m.
3
Segmental reporting
Segmental reporting is presented
in the condensed consolidated half year 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 material activities outside the UK,
segmental 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 reportable segments
of the Group to be Building, Infrastructure, 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. 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.
Half year to 31 December 2023
|
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Revenue
|
|
446.0
|
362.0
|
11.1
|
-
|
819.1
|
|
|
|
|
|
|
|
Pre-exceptional operating
profit/(loss) before amortisation of intangibles
|
|
10.6
|
9.3
|
0.3
|
(6.1)
|
14.1
|
Finance income
|
|
-
|
0.1
|
1.9
|
2.3
|
4.3
|
Finance costs
|
|
(0.6)
|
(0.7)
|
-
|
(0.3)
|
(1.6)
|
Pre-exceptional profit/(loss) before
amortisation and taxation
|
|
10.0
|
8.7
|
2.2
|
(4.1)
|
16.8
|
Amortisation of intangible
assets
|
|
(0.5)
|
(0.5)
|
-
|
(0.2)
|
(1.2)
|
Pre-exceptional profit/(loss) before
taxation
|
|
9.5
|
8.2
|
2.2
|
(4.3)
|
15.6
|
Exceptional items
|
|
-
|
-
|
-
|
(2.6)
|
(2.6)
|
Profit/(loss) before
taxation
|
|
9.5
|
8.2
|
2.2
|
(6.9)
|
13.0
|
Income tax charge
|
|
|
|
|
|
(1.7)
|
Profit for the period
|
|
|
|
|
|
11.3
|
Half year to 31 December 2022
|
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Revenue
|
|
399.7
|
276.6
|
2.9
|
-
|
679.2
|
|
|
|
|
|
|
|
Pre-exceptional operating
profit/(loss) before amortisation of
intangibles1
|
|
9.3
|
6.5
|
1.5
|
(6.5)
|
10.8
|
Finance income
|
|
-
|
0.3
|
2.0
|
0.9
|
3.2
|
Finance costs
|
|
(0.3)
|
(0.3)
|
-
|
(0.2)
|
(0.8)
|
Pre-exceptional profit/(loss) before
amortisation and taxation
|
|
9.0
|
6.5
|
3.5
|
(5.8)
|
13.2
|
Amortisation of intangible
assets
|
|
(0.5)
|
(0.5)
|
-
|
(0.5)
|
(1.5)
|
Pre-exceptional profit/(loss) before
taxation
|
|
8.5
|
6.0
|
3.5
|
(6.3)
|
11.7
|
Exceptional items
|
|
-
|
-
|
-
|
(4.5)
|
(4.5)
|
Profit/(loss) before
taxation
|
|
8.5
|
6.0
|
3.5
|
(10.8)
|
7.2
|
Income tax charge
|
|
|
|
|
|
(1.3)
|
Profit for the period
|
|
|
|
|
|
5.9
|
1 Investments includes other income as detailed in note
5.
Year ended 30 June 2023 (audited)
|
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Revenue
|
|
797.1
|
590.8
|
5.8
|
-
|
1,393.7
|
|
|
|
|
|
|
|
Pre-exceptional operating
profit/(loss) before amortisation 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
amortisation, 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/(loss) before
taxation
|
|
16.8
|
10.4
|
5.2
|
(22.3)
|
10.1
|
Income tax charge
|
|
|
|
|
|
(1.0)
|
Profit for the year
|
|
|
|
|
|
9.1
|
Inter-segment revenue, which is
priced on an arm's length basis, is eliminated from revenue above.
In the half year to 31 December 2023 this amounted to £41.7m (31
December 2022: £26.7m; 30 June 2023: £61.0m), of which £0.2m (31
December 2022: £0.1m; 30 June 2023: £nil) was in Building, £27.1m
(31 December 2022: £16.2m; 30 June 2023: £40.1m) was in
Infrastructure, £4.7m (31 December 2022: £nil; 30 June 2023: £nil)
was in Investments, and £9.7m (31 December 2022: £10.4m; 30 June
2023: £20.9m) was in Central.
Half year to 31 December 2023
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Balance Sheet
|
|
|
|
|
|
|
Goodwill and intangible
assets
|
|
40.5
|
58.3
|
-
|
-
|
98.8
|
Working capital employed
|
|
(43.4)
|
(174.3)
|
45.2
|
(33.2)
|
(205.7)
|
Net cash
|
|
130.5
|
45.0
|
(9.0)
|
42.7
|
209.2
|
Net assets/(liabilities)
|
|
127.6
|
(71.0)
|
36.2
|
9.5
|
102.3
|
Total Group liabilities
|
|
|
|
|
|
(639.0)
|
Total Group assets
|
|
|
|
|
|
741.3
|
|
|
|
|
|
|
|
|
Half year to 31 December 2022
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Balance Sheet
|
|
|
|
|
|
|
Goodwill and intangible
assets
|
|
41.5
|
57.8
|
-
|
1.2
|
100.5
|
Working capital employed
|
|
(57.2)
|
(160.4)
|
43.0
|
5.6
|
(169.0)
|
Net cash
|
|
127.1
|
20.0
|
(8.8)
|
57.5
|
195.8
|
Net assets/(liabilities)
|
|
111.4
|
(82.6)
|
34.2
|
64.3
|
127.3
|
Total Group liabilities
|
|
|
|
|
|
(530.6)
|
Total Group assets
|
|
|
|
|
|
657.9
|
Year ended 30 June 2023 (audited)
|
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Balance Sheet
|
|
|
|
|
|
|
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
|
|
139.0
|
42.7
|
(8.6)
|
47.1
|
220.2
|
Net assets/(liabilities)
|
|
119.1
|
(78.4)
|
34.7
|
43.2
|
118.6
|
Total Group liabilities
|
|
|
|
|
|
(594.1)
|
Total Group assets
|
|
|
|
|
|
712.7
|
|
|
|
|
|
|
|
|
|
|
|
4
Revenue
Nature of revenue streams
(i) Building &
Infrastructure segments
Our Construction business operates
nationwide, working with clients predominantly in the public and
regulated sectors. 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.
Revenue stream
|
Nature, timing of satisfaction of performance obligations 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 interdependent 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.
No significant financing component
typically exists in these contracts.
|
Cost-reimbursable
|
A number of projects within these
segments are undertaken using open-book/cost-plus/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 management
|
Contracts undertaken within the
Building segment that 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.
|
(ii) Investments
segment
Through public private
partnerships, the business leads bid consortia and arranges
finance, makes debt and equity investments (which are recycled) and
manages construction through to operations.
Revenue stream
|
Nature, timing of satisfaction of performance obligations and
significant payment terms
|
Investments
|
The Group has investments in a
number of PPP Special Purpose Vehicles (SPVs), delivering major
building and infrastructure projects.
Development fees and land sales on
co-development private rental schemes represent a performance
obligation that is recognised at a point in time when control is
deemed to pass to the customer (on financial close).
The business additionally provides
management services and project manages developments under
Management Service Agreements (MSA) or separate development
arrangements. Revenue for these services is typically recognised
over time as and when the service is delivered to the
customer.
Any variable consideration is
constrained in accordance with IFRS 15.
|
Disaggregation of revenue
The Group considers the split of
revenue by operating segment to be the most appropriate
disaggregation.
With the exception of £7.3m (31
December 2022: £nil, 30 June 2023: £nil) relating to the financial
close fees of our PRS development schemes as outlined in the Groups
strategy in the 30 June 2023 annual report, all revenue has been
derived from performance obligations settled over time.
5 Other
income
In the prior year, the Group
disposed of its 60% interest in Community Ventures Partnerships
Limited on 11 November 2022, recognising a gain on disposal of
£3.6m.
6
Exceptional items
|
Half year
to
31 December
2023
£m
|
Half
year to
31
December 2022
£m
|
Year to
30 June 2023
(audited)
£m
|
Exceptional
items1
|
2.6
|
4.5
|
10.5
|
An associated tax credit of £0.6m
(31 December 2022: £1.0m, 30 June 2023 £2.1m) has been
recognised.
1
The Group incurred customisation and
configuration costs associated with the move to 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 new system went live during the interim
period.
7
Net finance income
Group
|
Half year
to
31 December
2023
£m
|
Half
year to
31
December 2022
£m
|
Year to
30 June 2023
(audited)
£m
|
Interest receivable on bank
deposits
|
2.4
|
0.9
|
2.4
|
Interest receivable from PPP
investments and joint ventures
|
1.9
|
2.0
|
3.9
|
Other
|
|
0.3
|
-
|
Finance income
|
4.3
|
3.2
|
6.3
|
|
|
|
|
Other (including interest on lease
liabilities)
|
(1.6)
|
(0.8)
|
(1.8)
|
Finance costs
|
(1.6)
|
(0.8)
|
(1.8)
|
|
|
|
|
Net
finance income
|
2.7
|
2.4
|
4.5
|
8
Income tax expenses
The effective tax rate on profit
for pre-exceptional operations for the period is 15.0% (31 December
2022: 19.6%, 30 June 2023: 15.1%). The expected pre-exceptional
effective tax rate for the year to 30 June 2024 is 19.7%. This is
higher than the effective tax rate applicable to the period to 31
December 2023, largely because of the timing of the recognition of
prior year tax adjustments. The expected full year effective tax
rate excluding the impact of the prior year tax adjustments is in
line with the statutory tax rate.
The Group has approximately £53m
(31 December 2022: £53m, 30 June 2023: £53m) 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.
9
Dividends
The following dividends were paid
and recognised by the Company in each accounting period
presented:
|
Half year to 31 December
2023
|
Half
year to 31 December 2022
|
Year to
30 June 2023 (audited)
|
|
£m
|
pence per
share
|
£m
|
pence
per share
|
£m
|
pence
per share
|
Previous year net final
|
7.7
|
7.5
|
6.4
|
5.8
|
6.4
|
5.8
|
Special
|
12.5
|
12.0
|
|
|
|
|
Current period interim
|
-
|
-
|
-
|
-
|
3.2
|
3.0
|
Dividend recognised in the year
|
20.2
|
19.5
|
6.4
|
5.8
|
9.6
|
8.8
|
The following dividends were
declared by the Company in respect of each accounting period
presented:
|
Half year to 31 December
2023
|
Half
year to 31 December 2022
|
Year to
30 June 2023 (audited)
|
|
£m
|
pence per
share
|
£m
|
pence
per share
|
£m
|
pence
per share
|
Interim
|
4.1
|
4.0
|
3.2
|
3.0
|
3.2
|
3.0
|
Special
|
-
|
-
|
-
|
-
|
12.6
|
12.0
|
Final
|
-
|
-
|
-
|
-
|
7.9
|
7.5
|
Dividend relating to the year
|
4.1
|
4.0
|
3.2
|
3.0
|
23.7
|
22.5
|
The interim dividend for 2024 of
4.0p per share was approved by the board on 6 March 2024 and has
not been included as a liability as at 31 December 2023. This
interim dividend will be paid on 12 April 2024 to shareholders who
are on the register at the close of business on 15 March
2024.
10 Earnings per share
Basic and diluted earnings per share
Basic earnings per share 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 Employee
Share Trust, which are treated as cancelled.
The average number of shares is
diluted by reference to the average number of potential ordinary
shares held under option in the period. The dilutive effects
amount 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 purchase of own shares
represents shares purchased by the Galliford Try Employee Share
Trust for £1.1m (31 December 2022: £1.4m,
30 June 2023: £3.4m) and other share related transactions of £3.5m
(31 December 2022: £nil, 30 June 2023: £1.5m), in addition to £4.4m
(31 December 2022: £3.7m, 30 June 2023: £10.6m) purchased by the
Company as part of the share buyback announced in September 2022.
The buyback programme has now completed as announced on 17 November
2023.
The earnings and weighted average
number of shares used in the calculations are set put
below.
|
Half year to 31 December
2023
|
Half
year to 31 December 2022
|
Year to
30 June 2023 (audited)
|
|
Earnings
£m
|
Weighted average number of
shares
|
Per share amount
pence
|
Earnings
£m
|
Weighted
average number of shares
|
Per
share amount pence
|
Earnings
£m
|
Weighted
average number of shares
|
Per
share amount pence
|
Total operations
|
|
|
|
|
|
|
|
|
|
Basic EPS - pre-exceptional
|
|
|
|
|
|
|
|
|
|
Pre-exceptional earnings
attributable to ordinary shareholders
|
13.3
|
100,358,176
|
13.2
|
9.4
|
107,218,581
|
8.8
|
17.5
|
105,180,316
|
16.6
|
Basic EPS
|
|
|
|
|
|
|
|
|
|
Earnings attributable to ordinary
shareholders post exceptional items
|
11.3
|
100,358,176
|
11.3
|
5.9
|
107,218,581
|
5.5
|
9.1
|
105,180,316
|
8.7
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
Options
|
n/a
|
4,497,594
|
n/a
|
n/a
|
8,070,133
|
n/a
|
n/a
|
7,286,375
|
n/a
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - pre-exceptional
|
13.3
|
104,805,770
|
12.7
|
9.4
|
115,288,713
|
8.2
|
17.5
|
112,466,691
|
15.6
|
Diluted EPS
|
11.3
|
104,805,770
|
10.8
|
5.9
|
115,288,713
|
5.1
|
9.1
|
112,466,691
|
8.1
|
11 Goodwill
Goodwill is allocated to the
Group's cash-generating units (CGUs) identified according to
business segment. The goodwill is
attributable to the following business segments:
|
31 December
2023
|
31
December 2022
|
30 June
2023
(audited)
|
|
£m
|
£m
|
£m
|
Building
|
40.0
|
40.0
|
40.0
|
Infrastructure
|
53.5
|
52.9
|
52.7
|
|
93.5
|
92.9
|
92.7
|
As stated in the annual financial
statements for the year ended 30 June 2023, detailed impairment
reviews were carried out for all business segments.
Consideration has been given as to whether any events have
occurred since the year ended 30 June 2023 which could give rise to
an impairment trigger. No impairments have been identified from
these reviews.
The increase in goodwill relates
to acquisitions made during the period. The increase in goodwill
since 30 June 2023 relates to the acquisition of AVRS Systems
Limited (note 19). There was no goodwill associated with the
disposal of Rock & Alluvium Limited.
12 PPP and other investments
|
31 December 2023
£m
|
31 December 2022
£m
|
30 June 2023
(audited)
£m
|
At 1 July
|
44.6
|
47.5
|
47.5
|
Disposals and
subordinated loan repayments
|
(0.7)
|
(0.4)
|
(0.5)
|
Movement in fair
value
|
(0.4)
|
(1.0)
|
(2.4)
|
At 31 December and 30
June
|
43.5
|
46.1
|
44.6
|
The portfolio reflects a blended
discount rate of 7.3% (31 December 2022: 7.1%; 30 June 2023: 7.3%),
with the discount rates applied ranging from 6.3% to 8.0% (31
December 2022: 6.0% to 7.8%; 30 June 2023: 6.3% to 8.0%). An
increase/reduction of 0.5% (which is considered an appropriate
range given the relatively low risk associated with the portfolio)
would result in a corresponding decrease/increase in the fair value
of approximately £1.6m (31 December 2022: £1.7m; 30 June 2023:
£1.6m).
13 Trade and other receivables
|
31 December
2023
|
31
December 2022
|
30 June
2023
(audited)
|
|
£m
|
£m
|
£m
|
Amounts falling due within one
year:
|
|
|
|
Trade receivables
|
66.1
|
42.3
|
52.0
|
Less: Provision for impairment of
receivables
|
(0.1)
|
(0.1)
|
(0.1)
|
Trade receivables - net
|
66.0
|
42.2
|
51.9
|
Contract assets
|
227.0
|
193.8
|
204.9
|
Amounts due from joint venture
undertakings
|
2.9
|
2.9
|
0.9
|
Research and development expenditure
credits
|
5.3
|
4.3
|
5.8
|
Prepayments and other
receivables
|
24.7
|
21.1
|
23.0
|
|
325.9
|
264.3
|
286.5
|
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
£2.8m was recognised in the financial year to 30 June
2023.
14 Trade and other payables
|
31 December
2023
|
31
December 2022
|
30 June
2023
(audited)
|
|
£m
|
£m
|
£m
|
Trade payables
|
107.9
|
106.8
|
136.6
|
Contract liabilities
|
115.4
|
116.7
|
106.6
|
Other taxation and social security
payable
|
66.7
|
43.3
|
53.4
|
Accruals and other
payables
|
277.5
|
209.3
|
228.5
|
|
567.5
|
476.1
|
525.1
|
15 Provisions for other liabilities and
charges
Group
|
Onerous contracts
|
Rectification
|
Total
£m
|
At 1 July 2023
|
(2.0)
|
(27.9)
|
(29.9)
|
Utilised
|
1.7
|
2.0
|
3.7
|
Additions
|
(1.1)
|
(1.5)
|
(2.6)
|
At 31 December 2023
|
(1.4)
|
(27.4)
|
(28.8)
|
Group
|
Onerous contracts
|
Rectification
|
Total
£m
|
At 1 July 2022
|
(4.6)
|
(22.8)
|
(27.4)
|
Utilised
|
2.2
|
1.7
|
3.9
|
Additions
|
(2.2)
|
(0.9)
|
(3.1)
|
At 31 December 2022
|
(4.6)
|
(22.0)
|
(26.6)
|
Group
|
Onerous contracts
|
Rectification
|
Total
£m
|
At 1 July 2022
|
(4.6)
|
(22.8)
|
(27.4)
|
Utilised
|
6.8
|
3.5
|
10.3
|
Additions
|
(4.2)
|
(8.6)
|
(12.8)
|
At 30 June 2023
|
(2.0)
|
(27.9)
|
(29.9)
|
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.
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. The impact of discounting is not
material.
16 Financial instruments
The Group's activities expose it
to a variety of financial risks. The condensed consolidated half
year financial statements do not include all financial risk
management information and disclosures required in the annual
financial statements; they should be read in conjunction with the
Group's financial statements for the year ended 30 June
2023.
There have been no significant
changes in the risk management policies since the year
end.
Fair value estimation
Specific valuation techniques used
to value financial instruments are defined as:
i. Level 1 -
Quoted market prices or dealer quotes in active markets for similar
instruments.
ii. Level 2 -
The fair value of equity securities and interest rate swaps is
calculated as the present value of the estimated future cash flows
based on observable yield curves.
iii.
Level 3 - Other techniques, such as discounted
cash flow analysis, are used to determine fair value for the
remaining financial instruments.
The following table presents the
Group's assets that are measured at fair value:
|
31
December 2023
|
31
December 2022
|
30 June
2023 (audited)
|
|
Level 3
£m
|
Total
£m
|
Level
3
£m
|
Total
£m
|
Level
3
£m
|
Total
£m
|
Assets
|
|
|
|
|
|
|
Other investments
|
|
|
- PPP and
other investments
|
43.5
|
43.5
|
46.1
|
46.1
|
44.6
|
44.6
|
Total
|
43.5
|
43.5
|
46.1
|
46.1
|
44.6
|
44.6
|
|
|
|
|
|
|
|
|
|
There were no transfers between
levels during the period. The valuation techniques used to derive
level 3 fair values are consistent with those set out in the 30
June 2023 financial statements. Level 3 fair values are determined
using valuation techniques that include inputs not based on
observable market data. For all other financial instruments, the
fair value is materially in line with the carrying value.
The key assumptions used in Level 3 valuations
include the expected timing of receipts, credit risk and discount
rates. The typical repayment period is 10-15 years and the timing
of receipts is based on historical data.
During the period, government
gilts have decreased, while the base rate has increased. The
underlying assets remain low risk and insulated from short term
changes to the macro-economic environment. The fair value of the
portfolio reflects a blended discount rate of 7.3% (31 December
2022: 7.1%; 30 June 2023: 7.3%) and is based on current market
conditions. The sensitivity to discount rates is set out in note
12. If receipts were to occur earlier than expected, the fair
value could increase.
17 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, including joint
arrangements, amounting to £167.4m (31 December 2022: £148.5m; 30
June 2023 £165.5m).
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 net 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.
18 Related party transactions
Since the last Group annual
financial statements for the year ended 30 June 2023, there have
been no significant changes to the nature of related party
transactions.
19 Business combinations
On 8 November 2023, the Group
acquired 100% of the share capital of AVRS Systems Limited
("AVRS"), a leading mechanical and electrical engineering
specialist for £4.5m settled in cash. The addition of AVRS's
capabilities is complementary to the operations of Galliford Try's
expanding Environment asset optimisation and capital maintenance
business in line with the Groups strategy. In particular, AVRS
provides additional competencies that complement those acquired
over the past two years with nmcn's Water business, Lintott Control
Systems Limited, MCS Control Systems Limited and the capital
maintenance business of Ham Baker.
The goodwill of £0.8m 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.
|
£m
|
Recognised amounts of
identifiable assets acquired and liabilities assumed
|
|
Property plant and
equipment (including right of use assets)
|
1.2
|
Intangible
assets
|
0.9
|
Trade and other
receivables
|
3.1
|
Cash and cash
equivalents
|
0.8
|
Trade and other
payables
|
(1.3)
|
Corporation tax
liability
|
(0.3)
|
Lease
liabilities
|
(0.4)
|
Deferred tax
liability
|
(0.3)
|
Total identifiable net
liabilities
|
3.7
|
Goodwill
|
0.8
|
Total
|
4.5
|
|
|
Consideration
|
|
Cash
|
4.5
|
Total
|
4.5
|
As part of the conditions of the
sale and in addition to the initial consideration of £4.5m, an earn
out arrangement is in place, whereby the sellers are entitled up to
additional £2.5m. Due to the nature of the earn out, this will be
treated as remuneration as it requires the sellers to remain in
employment during the earn out period of two years.
The acquisition contributed £1.8m
of revenue and a profit before tax of £0.2m in the period to 31
December 2023. If the acquisition had taken place at the start of
the interim period, it would have contributed £6.4m of revenue and
a profit before tax of £0.7m.
During the previous year, the
Group acquired 100% of the share capital of MCS Control Systems
Limited and certain contracts and assets of Ham Baker Limited (in
administration) which is detailed in the annual report and
financial statements for the year ended 30 June 2023.
20 Alternative performance measures
Throughout the Interim statement,
the Group has presented financial performance measures which are
used to manage the Group's performance. These financial performance
measures are chosen to provide a balanced view of the Group's
operations and are considered useful to investors as they provide
relevant information on the Group's performance. They are also
aligned to measures used internally to assess business performance
in the Group's budgeting process and when determining compensation.
An explanation of the Group's financial performance measures and
appropriate reconciliations to its statutory measures are provided
below.
Measuring the Group's performance
The following measures are referred
to in this report:
Statutory
measures
Statutory measures are derived from
the Group's reported financial statements, which are prepared in
accordance with UK adopted International Accounting Standards and
in line with the Group's accounting policies. The Group's statutory
measures take into account all of the factors, including
exceptional items which do not reflect the ongoing underlying
performance of the Group.
Alternative performance
measures
In assessing its performance, the
Group has adopted certain non-statutory measures that more
appropriately reflect the underlying performance of the Group.
These typically cannot be directly extracted from its financial
statements but are reconciled to statutory measures
below:
a) Pre-exceptional performance
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. A reconciliation of the statutory
measure to the pre-exceptional measure is shown in the following
tables. 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 £2.8m).
b) Operating profit/(loss) before amortisation and operating
margin
The Group adjusts operating profit
to exclude the amortisation of intangible assets as this better
reflects the ongoing performance of the business. Operating margin
reflects the ratio of pre-exceptional operating profit before
amortisation of intangible assets and revenue. In the financial
year to 30 June 2023, operating margin also excludes the one off
contract settlement as announced on 8 June 2023. This differs from
the statutory measure of operating profit which includes the
amortisation of intangible assets. Divisional operating margin is
the combined operating margin of Building and
Infrastructure.
A reconciliation of the statutory
measure to the Group's performance measure is shown below, based on
continuing operations:
|
Building
£m
|
Infrastructure
£m
|
Investments
£m
|
Central
£m
|
Total
£m
|
Half year ended 31 December 2023
|
|
|
|
|
|
Statutory operating
profit/(loss)
|
10.1
|
8.8
|
0.3
|
(8.9)
|
10.3
|
Exclude: amortisation of intangible
assets
|
0.5
|
0.5
|
-
|
0.2
|
1.2
|
Exclude: exceptional items (note
6)
|
-
|
-
|
-
|
2.6
|
2.6
|
Pre-exceptional operating profit/(loss) before
amortisation
|
10.6
|
9.3
|
0.3
|
(6.1)
|
14.1
|
|
|
|
|
|
|
Revenue
|
446.0
|
362.0
|
11.1
|
-
|
819.1
|
|
|
|
|
|
|
Pre-exceptional operating margin
|
2.4%
|
2.6%
|
n/a
|
n/a
|
1.7%
|
|
|
|
|
|
|
Half year ended 31 December 2022
|
|
|
|
|
|
Statutory operating
profit/(loss)
|
8.8
|
6.0
|
1.5
|
(11.5)
|
4.8
|
Exclude: amortisation of intangible
assets
|
0.5
|
0.5
|
-
|
0.5
|
1.5
|
Exclude: exceptional items (note
6)
|
-
|
-
|
-
|
4.5
|
4.5
|
Pre-exceptional operating profit/(loss) before
amortisation
|
9.3
|
6.5
|
1.5
|
(6.5)
|
10.8
|
|
|
|
|
|
|
Revenue
|
399.7
|
276.6
|
2.9
|
-
|
679.2
|
|
|
|
|
|
|
Pre-exceptional operating margin
|
2.3%
|
2.3%
|
n/a
|
n/a
|
1.6%
|
|
|
|
|
|
|
Year ended 30 June 2023 (audited)
|
|
|
|
|
|
Statutory operating
profit/(loss)
|
17.5
|
10.8
|
1.4
|
(24.1)
|
5.6
|
Exclude: amortisation of intangible
assets
|
1.0
|
0.9
|
-
|
1.1
|
3.0
|
Exclude: exceptional items (note
6)
|
-
|
-
|
-
|
10.5
|
10.5
|
Pre-exceptional operating profit/(loss) before
amortisation
|
18.5
|
11.7
|
1.4
|
(12.5)
|
19.1
|
Exclude: impairment of financial
assets
|
-
|
2.8
|
-
|
-
|
2.8
|
Pre-exceptional operating profit/(loss) before amortisation
excluding the impairment of financial assets
|
18.5
|
14.5
|
1.4
|
(12.5)
|
21.9
|
|
|
|
|
|
|
Revenue
|
797.1
|
590.8
|
5.8
|
-
|
1,393.7
|
|
|
|
|
|
|
Pre-exceptional operating margin excluding the impairment of
financial assets
|
2.3%
|
2.5%
|
n/a
|
n/a
|
1.6%
|
|
|
|
|
|
|
c) Pre-exceptional profit before tax
The Group uses a profit before tax
measure which excludes exceptional items as noted above, whereas
the statutory measure includes exceptional items.
A reconciliation of the statutory
measure to the Group's performance measure is shown below, based on
continuing operations:
|
Half year to 31 December
2023
£m
|
Half
year to 31 December 2022
£m
|
Year to
30 June 2023 (audited)
£m
|
Statutory profit before
tax
|
13.0
|
7.2
|
10.1
|
Exclude: exceptional items (note
6)
|
2.6
|
4.5
|
10.5
|
Pre-exceptional profit before tax
|
15.6
|
11.7
|
20.6
|
d) Pre-exceptional earnings per share
In line with the Group's
measurement of pre-exceptional performance, the Group also presents
its earnings per share on a pre-exceptional basis. This differs
from the statutory measure of earnings per share which includes
exceptional items.
A reconciliation of the statutory
measure to the Group's performance measure is shown below, based on
continuing operations:
|
|
Half year to 31 December
2023
|
|
|
|
Earnings
£m
|
Ave number of
shares
|
EPS
pence
|
Statutory results
|
|
|
|
11.3
|
100,358,176
|
11.3
|
Exclude: exceptional loss (note 6)
|
|
|
|
2.0
|
n/a
|
n/a
|
Pre-exceptional earnings per share
|
|
|
|
13.3
|
100,358,176
|
13.2
|
|
|
Half year to 31
December 2022
|
|
|
|
Earnings
£m
|
Ave
number of shares
|
EPS
pence
|
Statutory results
|
|
|
|
5.9
|
107,218,581
|
5.5
|
Exclude: exceptional earnings (note 6)
|
|
|
|
3.5
|
n/a
|
n/a
|
Pre-exceptional earnings per share
|
|
|
|
9.4
|
107,218,581
|
8.8
|
|
|
Year ended 30 June 2023
(audited)
|
|
|
|
Earnings
£m
|
Ave
number of shares
|
EPS
pence
|
Statutory results
|
|
|
|
9.1
|
105,180,316
|
8.7
|
Exclude: exceptional earnings (note 6)
|
|
|
|
8.4
|
n/a
|
n/a
|
Pre-exceptional earnings per share
|
|
|
|
17.5
|
105,180,316
|
16.6
|
21 Disposal of subsidiary
On 30 November 2023, the Group
disposed of 100% of the share capital of Rock & Alluvium
Limited for consideration of £3.9m, of which £1.8m was satisfied on
completion of the disposal, with a further £2.1m due on 30 November
2024, which generated £nil gain on disposal.
Forward looking statements
Certain statements in this half
year report are forward looking. Such statements should be
treated with caution as they are based on current information and
expectations and are subject to a number of risks and uncertainties
that could cause actual events or outcomes to differ materially
from expectations.
Directors' responsibilities
The half-yearly financial report
is the responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
The condensed set of financial
statements has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting' as adopted by
the UK.
The directors confirm that these
condensed consolidated half year financial statements have been
prepared in accordance with IAS 34 as adopted by the UK; and that
the interim management report herein includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8 namely:
·
an indication of important events that have
occurred during the six months and their impact on the condensed
set of financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
·
material related party transactions in the first
six months and any material changes in the related party
transactions described in the last annual report.
The directors of Galliford Try
Holdings plc are:
Alison Wood
Non-executive Chair
Bill Hocking
Chief Executive
Andrew Duxbury
Finance
Director
Marisa Cassoni
Non-executive Director and Senior Independent Director
Sally Boyle
Non-executive Director
Michael Topham
Non-executive Director
Kevin Boyd
Non-executive Director
Signed on behalf of the
Board.
Bill Hocking
Chief Executive
Andrew Duxbury
Finance Director
6 March 2024
Independent review report to Galliford Try Holdings
plc
Report on the condensed consolidated interim financial
statements
Conclusion
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 31 December 2023 is not prepared, in all
material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct
Authority.
We have been engaged by the
company to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 December
2023 which comprises the condensed consolidated income statement,
the condensed consolidated statement of comprehensive income, the
condensed consolidated balance sheet, the condensed consolidated
statement of changes in equity and the condensed consolidated
statement of cash flows.
Basis for conclusion
We conducted our review in
accordance with Revised International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK)
2410 (Revised)"). A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
As disclosed in note 1, the annual
financial statements of the group are prepared in accordance with
UK adopted international accounting standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately
disclosed.
This conclusion is based on the
review procedures performed in accordance with ISRE (UK) 2410
(Revised), however future events or conditions may cause the group
to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
In preparing the half-yearly
financial report, the directors are responsible for assessing the
company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the review of the financial
information
In reviewing the half-yearly
report, we are responsible for expressing to the Company a
conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of our report
Our report has been prepared in
accordance with the terms of our engagement to assist the Company
in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority and for no other purpose. No person is entitled to
rely on this report unless such a person is a person entitled to
rely upon this report by virtue of and for the purpose of our terms
of engagement or has been expressly authorised to do so by our
prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London, UK
6 March 2024
BDO LLP is a limited liability
partnership registered in England and Wales (with registered number
OC305127).