2nd Jul 2007 07:00
Galliford Try PLC02 July 2007 TRADING UPDATE Galliford Try plc, the construction and housebuilding group, is providing thefollowing update to trading for the year to 30 June 2007 prior to entering itsclose period. Preliminary results are expected to be announced on 6 September2007. KEY HIGHLIGHTS • Full year profits expected to be significantly above market expectations and substantially ahead of last year. • Excellent performances from Morrison Construction and Chartdale Homes in their first full year following acquisition. • Integration of Linden Homes progressing well. • Construction order book maintained at over £2.1 billion. • Regeneration and affordable homes business working on seven major English Partnership projects. • Housebuilding reached record levels • Completions of 1,530 units (2006: 1,054 units) • Sales carried forward of £185 million (2006: £78 million) • Land bank of 11,100 units (2006: 4,022 units) • Strong construction cash flows. • Year end borrowings well below market expectations. OPERATIONS The building division continues to benefit from very good markets across thecountry. We have well established bases in the south of England, Midlands andScotland, and are making good progress in growing our business in the north ofEngland, where we were recently awarded the £41 million contract to constructthe National Museum of Liverpool. We are mid-way through our major education PFIprojects, the £192 million 41 school scheme in Northamptonshire and the £134million, 11 school scheme in the Highlands of Scotland. Progress is good on bothschemes. Commercial and retail clients continue to provide good opportunities,and we are working on a number of projects for Marks & Spencer. Our market penetration within the key sectors of the infrastructure divisioncontinues to grow. In the remediation sector our Olympic Park framework in eastLondon for the Olympic Development Authority is progressing well, as is our workon Europe's largest onshore wind farm at Whitelee in Scotland in our renewableenergy business. In the Highways sector we have over £100 million of roadprojects currently under construction, and were recently appointed as one of theEnvironment Agency's contractors on its four year framework for its £500 millionflood defence, waterways and water resources programme. Through our Network Railframework we continue to develop our presence in the sector and have secured ourfirst contract in Scotland. As a market leader in the water sector, we havesecured a number of new projects in addition to our existing long termframeworks with seven of the eleven regulated water companies in the UK, such asthe £50 million water treatment works secured in joint venture for Anglian Waterand announced earlier this month. Overall, the construction order book has been maintained at £2.1 billion. The investments division secured preferred bidder status during the period onthe £25 million PPP contract to build and operate a new community hospital andhealth centre in St Andrews. It also expects to achieve financial close on the£100 million south east Essex LIFT in the autumn. Our regeneration and affordable housing business is growing significantly, andthe acquisition of Linden Homes has increased our project base with EnglishPartnerships and affordable housing providers. Our ability to offer the fullrange of housebuilding and contracting skills from across all Galliford Try'soperations gives us a key advantage in the larger more complex sites. We arecurrently working on seven English Partnerships' projects, having secured in thelast six months the 430 homes Turner Village scheme in Colchester, the 700 homeEpsom Cluster Hospital scheme in Surrey being carried out in joint venture andthe 123 home scheme in Millbay, Plymouth. Following our appointment asdevelopment partner, we recently exchanged contracts to undertake a 440 homeregeneration scheme in Grimsby with Shoreline Housing Partnership and announcedlast week our appointment as development partner for a 500 homes scheme forWestco Properties, part of Devon and Cornwall Housing Association, in Plymouth. The results will include four months trading from Linden Homes, which wasacquired in March 2007. The integration of the business into our housebuildingdivision is progressing well, and a number of quality projects that were in thepipeline are now coming to fruition. We are also confident of exceeding the costsavings projected. Following the acquisition we have reorganised our regionalstructure in the south east of England, rebranding as Linden Homes throughoutthe area. The housebuilding division exceeded its sales targets in a market that moderatedin the second half of our financial year, with the effect of interest rate risesresulting in a market that is at an acceptable, but competitive level.Completions for the year were up 45% at 1,530 at an average sales price up 5% to£222,000. We ended the financial year with a strong level of sales carriedforward of £185 million compared to £78 million last year. We have continued to selectively add to our land bank across our regions in thesouth west, south east and eastern counties of England. 4,800 plots wereacquired with Linden Homes, and we entered the new financial year with a recordland bank of 11,100 units compared to 4,022 last year, giving an excellent baseon which to continue our growth. OUTLOOK Galliford Try expects to report full year profits significantly above marketexpectations and substantially ahead of last year. The integration of LindenHomes, acquired in March, is on track and we are already seeing the benefits ofa greater market presence across all areas of operation. Morrison Constructionand Chartdale Homes have been fully integrated into our operations and havedelivered an excellent performance in their first full financial year sinceacquisition. Our construction divisions are generating strong cash flows, and,despite the increase in the land bank, the group's borrowings have beenmaintained well below the levels expected on the acquisition of Linden Homes. Further enquiries to: Greg Fitzgerald, Chief Executive Galliford Try plc 01895 855219Frank Nelson, Finance Director Galliford Try plc 01895 855226Ann marie Wilkinson/Dan De Belder Bell Pottinger 020 7861 3232 Corporate & Financial This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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