28th Oct 2005 07:00
Galliford Try PLC28 October 2005 GALLIFORD TRY PLC ANNUAL GENERAL MEETING STATEMENT Tony Palmer, Chairman of Galliford Try plc, will make the following comments atthe annual general meeting of the Company to be held at 12:00 noon today: "When announcing our results for the year to 30 June, I was delighted to reportanother excellent year. We achieved record financial results and deliveredgrowth in both construction and housebuilding. Construction profits have steadily risen and we achieved a margin of 1.5%, wellon the way towards our 2% target. The business is generating good cash flows,and we are now clearly seeing the benefits of our focus on specific marketsectors where clients seek early contractor involvement in their constructionprogrammes. In one of the most difficult housebuilding markets we haveexperienced for many years we increased our profit, and saw our margin rise to14.1%. This demonstrates that our strategy of providing individually designeddevelopments for the mainstream market, and not being dependent on majorconsortium sites or high rise apartment developments, is proving to be asuccessful business model. Our record results for the year to 30 June 2005 and the 24% increase in thedividend represents a combination of the delivery of our strategy in bothconstruction and housebuilding and our confidence that the business is wellpositioned to deliver sustainable future growth to shareholders. Our task in construction is now to increase profits by expanding the business ata rate that does not compromise margin. Investment in the country'sinfrastructure is continuing, and, as one of the key construction providers tothe water and rail industries, we work both through frameworks and by carryingout single projects. We are in the third year of our successful framework withScottish Water, and are now in the first year of our new five year extendableframework with United Utilities to carry out around £250m of work. The majority of future work in health and education will be through PFI's,Building Schools for the Future or Local Improvement Finance Trust frameworks.We have extensive experience of all these methods of procurement, particularlyfor delivering the series of mid range projects that form the backbone of thebuilding works required by education and health authorities. We are currentlyworking towards financial close on one of the largest multi school PFIprogrammes, for Northamptonshire County Council, which we anticipate willgenerate over £150m of work on 41 schools over a 3 year period. We are one of the UK's leading providers of design and construction services forthe mobile phone industry. Earlier this month we were delighted to announce theacquisition of Pentland Limited, a provider of site acquisition and town andcountry planning services to the industry. As the latest generation of mobilephones are expected to result in an increase in network capacity requirements,this is an excellent example of how we can further grow our business byextending and enhancing the services we offer. The success we have had in securing frameworks, particularly in water andhealth, has resulted in our overall current construction order book standing at£931m compared to £703m at the same stage last year. Of this, 90% has beensecured on a non price competitive basis and 80% is in the public and regulatedsectors. I am pleased to report that, compared to the difficult selling period of lastyear, housebuilding sales since the start of our new financial year aresignificantly higher at £72m. We have currently either reserved, contracted orcompleted sales in hand with a value of £137m, a 19% increase over a year ago,representing 56% of our planned sales for the year to 30 June 2006. Thisdemonstrates the resilience of our business model in a market that remainsfragile, and in which our recent performance has reinforced our confidence tomaintain our expansion plan for the more consistent markets that will return inthe future. The number of selling outlets in the first half of this financial year is up20%. We will not ease back on our strict selectivity criteria for landacquisition, adding to our holdings where the profit potential meets ourrequirements. We have a good track record in obtaining planning consents in anincreasingly difficult planning environment. Having obtained a consent for amixed scheme of 190 units, we have started work on the old hospital site in thecentre of Truro, our joint redevelopment in partnership with Westco, part of theDevon & Cornwall Housing Association. Since the year end we have acquired theredundant Roman Catholic seminary in Osterley, West London, an eight acre sitewhere we anticipate securing consent for a substantial mixed refurbishment andnew build scheme that will provide both homes for sale and affordable housing. Both of our divisions are increasing their presence in the affordable housingmarket. Our construction capability is particularly strong to the East ofLondon, an area where significant regeneration is expected to occur prior to the2012 Olympics. The requirement for affordable housing as part of our housing developments meansthat we can harness that expertise, in partnership with housing associations, togenerate new projects. We are also one of a limited number of developers thathave pre-qualified for inclusion in the Government's £3.9billion national "NewPartnerships in Affordable Housing" programme by the Housing Corporation whichallows for grant direct to developers. As you know, Greg Fitzgerald was appointed Chief Executive of the Company on 1stJuly, and I am delighted to report that he is already demonstrating the skillsand experience to deliver profitable growth going forward. As announced lastFebruary, I shall be stepping down as Chairman at the end of the meeting, andwill hand over to David Calverley. David was a first class chief executive and Iknow he will be an excellent Chairman. We have a business model that has proved its worth and we have clear strategiesin both construction and housebuilding to deliver growth. We are in a goodfinancial position and have started the year in line with our expectations. I amconfident that we have the team in place to continue to drive the businessforward. Tony PalmerChairman28 October 2005 Further enquiries to: Greg Fitzgerald, Chief Executive Galliford Try Plc 01895 855 219Frank Nelson, Finance Director Galliford Try Plc 01895 855 226Ann-marie Wilkinson/Geoff Callow Bell Pottinger Financial 020 7861 3877 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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