6th Jul 2005 07:01
Galliford Try PLC06 July 2005 WEDNESDAY 06TH JULY 2005 GALLIFORD TRY PLC TRADING UPDATE Galliford Try plc, the construction and housebuilding group, is providing thefollowing update to trading for the year to 30 June 2005 prior to entering itsclose period. Galliford Try expects to report full year profits well ahead of last year andabove current market expectations. The construction division is continuing toincrease its margin and we are delivering growth in housebuildingnotwithstanding the difficult market. This is being achieved with Groupborrowings at 30 June at a similar level to last year. We see excellent prospects in the affordable housing market for both ourconstruction and housebuilding divisions. In the South West we are a marketleader, and in joint venture with affordable housing provider Westco, havesecured planning consent for the redevelopment of Truro Hospital into 190 units,45% of which will be affordable. Public sector investment in social housing andkey worker accommodation is rising, and the planning requirements nownecessitate a different perspective on the affordable housing element on sitesfor private sale. We are one of around 20 developers that have been shortlistedby the Housing Corporation for inclusion in the Government's "New partnershipsin affordable housing" scheme which allows for grant direct to developers. Weare currently working with sixteen affordable housing providers on a variety ofschemes and in June we won the best social housing development award for ascheme in Devon at the National housebuilder design awards. The current construction order book has been maintained at £950million, of which78% is in the public and regulated sectors and over 90% has been secured on anon price competitive basis. In May we secured the five year AMP 4 contract forwater and waste water infrastructure works for United Utilities and we havecontinued our strong presence in framework contracting. We have been awarded anumber of projects on the rail network arising from our building and structuresframework agreements with Network Rail and the train operating companies. Education and health are key sectors for us and with four schemes totalling£120million having financially closed in the year, we have a real opportunityfor growth with the next phase of NHS LIFT projects as well as Building Schoolsfor the Future. We have sold our Private Finance Initiative investment inBirmingham Schools Partnership (Holdings) Ltd for a consideration of £1.8millionin cash, resulting in a profit of £1.5million, which has contributed towardsoffsetting significantly higher PFI/PPP costs during the year as our involvementin this market continues to grow. We are taking advantage of the steady improvement in the commercial market,where our expertise in developments such as the recently completed £19millionmixed scheme for the Corporation of London in Sedley Place is leading to anumber of new opportunities. We have commenced the first year's work on ourlatest project for the All England Lawn Tennis Club at Wimbledon, thereconstruction of the Centre Court buildings to incorporate a retractable roof,due for completion in 2009. Housebuilding completions for the year were up 12% at 853 on an average sellingprice down 7% to £208,000, in line with our strategy of growing the business inthe mainstream market. Our business model, focusing on individually designeddevelopments, with a particular strength in conversions and brownfielddevelopment, is demonstrating its value in difficult market conditions. We haveno high rise apartment developments and do not depend on major consortium sites,giving us a competitive advantage in a purchaser driven market and minimisingthe level of sales incentives required. We have made satisfactory sales progress in the last 6 months following the slowmarket of the first half and ended the financial year with sales in hand at£65million. This compares to £74million last year following the exceptionallybuoyant market in early 2004, but is substantially up on the £37million of theyear before. In the next six months the number of active sites from which wewill be selling will be up by over 20% in line with our planned growth for theyear. Good progress on our cost reduction programme is assisting our margins,and we are obtaining better sub-contract prices in the current market. We remain selective in purchasing sites that meet our more stringent acquisitionhurdles, but there are good opportunities in the current market. In May weacquired the redundant Banstead hospital in Surrey, which we are planning toconvert into around 100 units in a mixture of new build and conversion. At theyear end our land bank was marginally up at 2,455 units compared to 2,333 lastyear. The preliminary results for the year to 30 June 2005 are expected to beannounced on Thursday 08 September 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 3232 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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