In an update for the year to 30 June 2021, Galliford Try (GFRD ) said it has performed strongly which has resulted in improved profitability and a high-quality order book.
The UK construction group, which expects to announce its results for the full year on 16 September 2021, said it had made good progress against margin improvement target, with full year profit before tax expected to be towards the upper end of the analysts' current range.
The Group outlined that the current range of analysts' estimates for profit before tax for the year ending 30 June 2021 is £9 million to £11.2 million based on forecasts as at 1 July 2021.
In March 2021, the Company announced a return to profitability and the resumption of dividends. Since then, Galliford said it has made further good operational progress with all of its construction sites remaining fully operational since the start of the new financial year.
Galliford holds a positive outlook and maintains a high-quality order book across its chosen sectors of £3.3bn, a marginal increase from £3.2bn in FY20. To date, Galliford has secured 90% of revenue for the year (2020: 90%) and a strong pipeline of future orders, it reported.
‘Our focus on the public and regulated sectors makes us well placed to benefit from increasing Government investment in economic and social infrastructure, and our pipeline of work with high quality private sector clients continues to be robust,’ the firm noted.
Over the period, Galliford reported several major contract wins included within its £3.3bn order book; this included £700m worth of contracts under the firm’s Environment division, £448m in contracts under its Highways division, and £41m under its Building division.
The Group told investors that its strong balance sheet ‘continues to be a differentiator for our clients and supports its ability to win high quality contracts and framework positions.’
Galliford had an average month-end cash for the financial year to 30 June 2021 of c.£164m with a portfolio of PPP assets, no pensions liabilities and no debt or associated covenants.
The Group reiterated its commitment to achieving net zero carbon across its own operations by 2030. To date, it has already reduced emissions by 62% since 2012. The group said it is also targeting net zero emissions across all activities by 2045 at the latest.
"We are meeting our objectives of operating sustainably and delivering controlled growth, cash generation and improved margins. The Group has an excellent order book and is strongly positioned to contribute to the UK's economic recovery,” said CEO, Bill Hocking.
He added, “We were pleased to publish our net zero carbon targets recently, which build on our successful track record of reducing carbon emissions over the last decade. We start the new financial year in an excellent position. The quality of our people, our balance sheet and our order book mean that I look forward to the new financial year with confidence."
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Earlier this month, Galliford announced that its Environment business had successfully secured a place on a strategically targeted framework with Scottish Water worth £350m.
The second appointment followed a strong set of first half results to 31 December 2020 and a return of dividend payments under a new and enhanced dividend policy of 1.2p per share.
Galliford delivered several multi-year contracts in 1H21. It says its risk-based approach to new business provides it with significant confidence in market expectations for FY21 and beyond.
Shares in Galliford Try have increased by over 17% since the beginning of January 2021. While the impact of COVID-19 resulted in the business losing around half of its value last year, it has since regained its value and the Company has reported a return to profitability.
Galliford Try is a leading UK construction group listed on the London Stock Exchange.
Operating as Galliford Try and Morrison Construction, the group carries out building and infrastructure projects with clients in the public, private and regulated sectors in the UK.
Strategy for Sustainable and Profitable Growth
The Group is well capitalised with no debt, no pension liability, a portfolio of high-quality PPP assets, a strong order book and is expecting to be profitable this year and reinstating its Dividend at the Half Year stage.
Risk Management at Its Core
Galliford Try is laser focused on robust risk management and concentrating on growth sectors where the Company has a highly differentiated offering with a high value proposition for its clients.
High Visibility on Future Earnings
Galliford Try has signed a number of high-value longstanding contracts with exposure to long-term Government funded Infrastructure projects as part of its economic recovery plan.
The leading UK construction platform, combined with the Company’s strong client relationships, provides the Board with confidence in the future performance of the business.
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