TIDMGFRD
RNS Number : 7186J
Galliford Try PLC
14 September 2016
07:00 AM WEDNESDAY 14 SEPTEMBER 2016
GALLIFORD TRY PLC
ANNUAL RESULTS STATEMENT FOR THE YEARED 30 JUNE 2016
DELIVERING RESULTS THROUGH OUR DISCIPLINED GROWTH STRATEGY
Highlights
Financial 2016 2015 Change
* Revenue(1) (including joint ventures) GBP2,670m GBP2,431m +10%
* Group revenue(1) GBP2,495m GBP2,348m +6%
* Profit before tax GBP135.0m GBP114.0m +18%
* Earnings per share 132.5p 112.8p +17%
* Dividend per share 82.0p 68.0p +21%
GBP8.7m GBP17.3m -GBP8.6m
* Net debt
* Group return on net assets(2) 25.3% 23.3% +2.0 pts
* Profit before tax, pre-exceptional(3) GBP135.0m GBP117.7m +15%
* Earnings per share, pre-exceptional(3) 132.5p 116.3p +14%
Group
-- Record profit following another strong year with growth across the Group
-- 21% increase in full year dividend payment to 82 pence
-- Minimal net debt of GBP8.7 million at 30 June 2016 (2015: GBP17.3 million)
-- Return on net assets improved to 25.3% from 23.3%
-- Management reorganised to continue to improve operational
excellence in all three businesses
Linden Homes
-- 3,078 completions(4) (2015: 2,769) producing an 8% increase
in revenue to GBP841 million (2015: GBP779 million)
-- Significant margin increase to 17.5% (2015: 16.0%)
-- Sales per outlet up 2% on last year, with 19% growth in sales
reserved, contracted or completed to GBP510 million (2015: GBP427
million)
-- Linden Homes landbank of 11,700 plots(5) (2015: 13,550 plots)
with a 14,500 total Group landbank (2015: 15,750)
-- 100% of land required for 2017 financial year in place and 85% of land secured for 2018
-- Restructuring implemented generating annualised savings of over GBP5 million from FY 2017
Partnerships and Regeneration
-- Growth in mixed-tenure revenue to GBP67 million from 526
completions(4) (2015: GBP56 million and 408 respectively)
-- Contracting revenue lower at GBP234 million (2015: GBP273
million), slightly constrained by procurement delays following the
Government's rent reforms
-- Margin improving to 3.9% (2015: 2.9%)
-- Growth in landbank to 2,800 (2015: 2,200) plots
-- New Bristol office opened in July 2016 and a new Central
Southern office planned for the current year
-- Contracting order book of GBP865 million (2015: GBP850
million) and mixed-tenure sales reserved, contracted or completed
of GBP73 million
-- Partnerships and Regeneration teams merged to enhance strategic and operational focus
Construction
-- Construction margin of 1.1% from revenue of GBP1,503 million
(2015: 1.2% and GBP1,293 million respectively)
-- Order book of GBP3.5 billion (2015: GBP3.8 billion)
-- 85% of this year's planned revenue secured (2015: 90%)
-- Cash continues to be strong at GBP161 million (2015: GBP173 million)
Peter Truscott, Chief Executive, commented:
"I am delighted to announce excellent results for the year. We
have achieved further progress on margins in Linden Homes,
increased our mixed-tenure output in Partnerships and Regeneration,
and continue to make progress in resolving older contracts in
Construction, whilst building and delivering a reliable and high
quality order book. We have reorganised management in all three
businesses during the year, creating the right platform for future
progress in both volume and margin. Reflecting the delivery of
record results and our continuing confidence in the business, we
are proposing an increase in our full year dividend of 21%.
The decision to leave the European Union inevitably creates a
backdrop of uncertainty for the new financial year. However, we
have been encouraged by visitor levels and sales rates at Linden
Homes through the summer. The balance of our businesses and the
strength of our order books mean that we are well-placed to manage
the impact of this uncertainty."
This announcement contains inside information.
Enquiries:
Galliford Try plc Peter Truscott, Chief Executive 01895
855001
Graham Prothero, Finance Director 01895 855001
Tulchan Communications James Macey White / Martin Pengelley 020 7353 4200
(1) 'Revenue' includes share of joint ventures' revenue of
GBP175.5 million (2015: GBP82.3 million). 'Group revenue' where
stated excludes share of joint ventures.
(2) Group return on net assets represents profit before tax,
exceptional items, finance costs and amortisation compared to
average net assets.
(3) Exceptional costs in 2015 of GBP3.7 million related to the
integration of Miller Construction. There were no exceptional costs
in 2016.
(4) Completions net of joint venture partner share were 2,691
(2015: 2,566) for Linden Homes and 394 (2015: 308) for Partnerships
and Regeneration.
(5) Linden Homes landbank includes 2,311 plots (2015: 1,967)
held in joint ventures.
Galliford Try will hold its results presentation at 09:30 am on
Wednesday 14 September 2016 at the London Stock Exchange, 10
Paternoster Square, London EC4M 7LS. A live audio webcast will be
available at
http://www.investis-live.com/galliford-try/57bd9fe674443c0b0037a664/9f523.
Recorded interviews with Peter Truscott and Graham Prothero,
regarding the full year results will be available on the Group's
website: www.gallifordtry.co.uk from Wednesday 14 September
2016.
CURRENT TRADING AND OUTLOOK
The result of the EU referendum inevitably created a backdrop of
uncertainty for the new financial year and we are monitoring market
conditions and consumer confidence closely.
Although there is insufficient data to predict specific effects
on our markets, customer interest in Linden Homes remains solid.
After a short-term decline in visitor numbers and small increase in
cancellation rates, broadly in line with normal seasonal patterns,
we are encouraged to see a return to growth in sales rates and
prices since the referendum. More broadly, the strength of
underlying demand for new homes, the continuing availability of
mortgage finance at low rates of interest, and the stimulus of
Help-to-Buy give grounds for confidence in both Linden Homes and
Partnerships.
We continue to pursue opportunities to acquire prime sites in
good locations at attractive hurdle rates, while remaining
disciplined in our expansion. In light of the current economic
uncertainty, we are taking a more cautious approach to land
acquisition, a stance we adopted in the period ahead of the
referendum. We continue to maintain a strong landbank which
supports 100% of our plans for the next financial year and 85% of
our plans for 2018.
In Partnerships and Regeneration, affordable housing remains
high on the political agenda with renewed emphasis on home
ownership. Despite the challenges of welfare reform, the recent
Government rent reforms and market uncertainty following the EU
referendum, housing associations remain financially robust and are
continuing to leverage their balance sheets to support mixed-tenure
developments. Building on our experience and relationships with
public sector commissioners, the prospects for our Partnerships
business are considered to be excellent, with significant unmet
demand for low-cost, intermediate and rented affordable homes.
Further geographic expansion and increase in mixed-tenure revenues
will drive growth in both the top line and margins.
The construction market remains positive, helped by the
substantial infrastructure maintenance and improvement required in
the UK. The late-cycle nature and public sector focus of our
Construction business are key advantages for the Group, with the
order book already 85% secured for the current financial year. The
pipeline of opportunities in both Building and Infrastructure
remains encouraging, although the speed of some work coming through
the public sector remains slower than expected. Whilst there has
undoubtedly been a cooling in demand for new private commercial
buildings in the period leading up to and since the EU referendum,
our focus on the public and regulated sectors, which represent 90%
of our order book, give us a strong and reliable outlook. We will
remain disciplined in our approach to securing work: whilst it is
desirable to maintain a certain scale of operations, we will always
prioritise quality of the order book over quantity.
Overall, the outlook remains positive for all three of our
businesses. Strong demand in housebuilding, stable construction
markets, an aggregate order book of GBP4.9 billion, and our balance
sheet position give the Board continued confidence in the Group's
prospects.
STRATEGY
The strategy we outlined in February 2014, which set out
detailed Group and divisional targets to 2018, has provided an
excellent plan for sustainable growth and we have delivered a
strong performance each year, creating a platform for continuing
sustainable and disciplined growth. Further detail around our
longer-term strategy and objectives will be communicated at our
capital markets day in February 2017.
DIVID
The directors are proposing a final dividend of 56 pence per
share, an increase of 22%. Together with the interim dividend of 26
pence per share paid in April, this will result in a total dividend
for 2016 of 82 pence per share, an increase of 21% over 2015. The
total dividend is 1.6 times covered by earnings, in line with our
guidance. Subject to shareholder approval at the AGM, the dividend
will be paid on 23 November 2016 to shareholders on the register at
28 October 2016.
For 2017 we retain our target of 1.6 times cover. As part of our
current review of strategy, and specifically considering our
disciplined growth plans for Linden Homes and Partnerships and
Regeneration, we are proposing to build cover, beginning in 2018,
aiming in each year at least to maintain the absolute payment
(subject as always to market conditions and profit
performance).
FINANCIAL REVIEW
Galliford Try enjoyed another year of strong progress,
delivering record profit before tax and earnings per share, and a
further increase in return on net assets, whilst making significant
strides against our strategic targets for 2018.
Revenue including our share of joint ventures rose 10% to
GBP2,670 million (2015: GBP2,431 million). Group revenue, excluding
joint ventures, was 6% higher at GBP2,495 million (2015: GBP2,348
million).
Profit from operations, which is stated before finance costs,
exceptional items, tax and our share of joint ventures' interest
and tax, rose 13% to GBP157.5 million (2015: GBP138.9 million).
This resulted in profit before tax of GBP135.0 million, up 15% from
GBP117.7 million (pre-exceptional) in 2015, principally reflecting
revenue growth and improving margins in Linden Homes and
Partnerships.
Earnings per share increased by 14% to 132.5 pence (2015: 116.3
pence pre-exceptional), with post-exceptional earnings per share up
17%.
Average net debt during the year was GBP204 million and year end
net debt was GBP8.7 million, both of which were in line with our
plans as we continue to invest in the growth of Linden Homes and
Partnerships. We enjoy strong support from our syndicate banks, and
during the year we agreed an increase in our bank facility by GBP50
million to GBP450 million, on the same terms, in particular to
create comfortable headroom for the faster expansion of
Partnerships and Regeneration.
We continue to purchase land on deferred payment terms where
possible, in order to optimise our return on capital employed. As
explained in note 1 of the financial information, we have reviewed
our policy on land creditors to bring this into line with our
sector peer companies. Under the new policy, land creditors
declined to GBP202.8 million (2015: GBP224.8 million as restated,
compared with GBP390.9 million on the previous basis).
Group return on net assets, which is profit before tax, finance
costs and amortisation, divided by average net assets, increased to
25.3% from 23.3%, reflecting profit growth across the Group. This
year we have enhanced our disclosure by providing a segmental split
of our balance sheet, as shown in note 2 in the financial
statements, enabling us to refine our estimation of divisional
return on net assets.
OPERATIONAL REVIEW
LINDEN HOMES
2016 2015
Revenue (GBPm) 840.8 779.0
Profit from operations
(GBPm) 147.2 124.3
Operating profit
margin (%) 17.5 16.0
Completions 3,078 2,769
Linden Homes benefited from a robust housing market throughout
the year, underpinned by supply shortages, an ample availability of
low-cost mortgages, and a land market that remained positive.
Underlying demand is strong and mortgage availability and
affordability remains positive. We increased our revenue and
margins, benefitting from a rigorous drive in efficiency, and
maintained our landbank at an appropriate level, given our
expansion plans and a good supply of new opportunities in all
regions. We have restructured and strengthened senior management,
and achieved significant overhead savings through process
rationalisation.
Linden Homes revenue increased by GBP61.8 million to GBP840.8
million, with completions of 3,078 compared with 2,769 in 2015.
Excluding our joint venture partners' share, completions were 2,691
against 2,566 in 2015. Private housing completions accounted for
2,487 of the total (2015: 2,059). The average selling price of
these units rose by 2% to GBP335,000.
Average sales rates in the second half were strong, at 0.68
units per site per week from an increased average number of outlets
of 84; for the full year we achieved 0.62 sales per site per week
from an average of 80 outlets (2015: 0.61 sales pspw from 62
outlets).
Linden Homes achieved a gross margin of 23.8%, compared with
22.5% in 2015.
Profit from operations increased by 18% to GBP147.2 million
(2015: GBP124.3 million). The operating margin rose significantly
from 16.0% in 2015 to 17.5%. Following an operating margin in the
first half of the year of 17.0%, the margin achieved in the second
half of the year was 17.9%. Excluding land sales (which mainly
represented transfers into strategic joint ventures), the operating
margin for the year was 16.2% (2015: 14.7%). Return on net assets
calculated under our updated segmental disclosure was 31.7%,
compared with 27.9% in 2015, reflecting continued strong working
capital management.
Linden Homes' landbank is 11,700 plots. Including 2,800 plots in
Partnerships and Regeneration, our total housebuilding landbank is
14,500 plots (2015: 15,750 plots). The figure represents the number
of plots we own and control, including sites under option but
excluding longer-term strategic options.
We continued to roll out the Linden Homes Layouts, which provide
templates for the interiors of our homes and allow us to benefit
from a more standardised procurement and construction process. A
significant focus on rationalising our operating processes will
generate annualised savings of over GBP5 million in FY 2017, while
retaining capacity to grow unit numbers.
We opened a second business in Yorkshire in July 2016, building
on our successful acquisition of Shepherd Homes in 2015.
Given the potential for margin enhancement we have increased our
focus in strategic land.
In August we restructured the senior leadership of the business,
creating two divisions led by Tom Nicholson (Divisional Chairman
East) and Andrew Hammond (Divisional Chairman West). Peter Truscott
will chair the board of Linden Homes, and Tom and Andrew have both
joined the Group Executive Board.
PARTNERSHIPS AND REGENERATION
2016 2015
Revenue (GBPm) 300.6 329.4
Profit from operations
(GBPm) 11.7 9.4
Operating profit
margin (%) 3.9 2.9
Completions 526 408
Order book (GBPm) 865 850
Partnerships and Regeneration delivered strong growth in
mixed-tenure revenues and margin increases.
There was some disruption to our registered provider clients'
procurement activities in the first half of the year due to the
Government's rent reforms, resulting in a small reduction in
revenue from GBP329.4 million in 2015 to GBP300.6 million in 2016.
Of this, GBP66.7 million came from mixed-tenure developments (up
19%) and GBP233.9 million from contracting (down 14%). We continue
to be encouraged by our strong position in favourable markets in
which we secured a number of major project wins.
The business continued its successful relationship with the
ExtraCare Charitable Trust and was contracted to build a GBP45
million ExtraCare village in High Wycombe, and the GBP42 million
Stoke Gifford Retirement Village. Partnerships was one of six
contractors appointed to North Yorkshire County Council's Extra
Care Housing Programme Framework, which has an anticipated value of
up to GBP650 million over six years, and was also selected for five
of the eight lots available under the Hyde Housing Group Main
Contractor Framework Agreement. The framework is anticipated to be
worth up to GBP1 billion.
Partnerships and Regeneration contributed profit from operations
of GBP11.7 million, up from GBP9.4 million in 2015. This
represented a blended operating margin of 3.9% (2015: 2.9%).
Net debt in the business stood at GBP12.1 million at 30 June
2016 (2015: GBP15 million cash), with the movement reflecting our
investment of cash to fund mixed-tenure developments.
The contracting order book is GBP865 million (2015: GBP850
million). The business has GBP73 million of unit sales in hand.
We are setting ambitious growth plans for the business. Building
on our experience and relationships with public sector
commissioners, we will use our skills in housebuilding and
place-making to deliver an increase in the number of new homes we
provide. Geographical expansion is a key part of our growth
strategy. We opened our new office in Bristol in July, giving us
six offices across England and South Wales, and plan to open a new
Central Southern office this year and further offices over the
coming years.
In recognition of the size of the opportunity we perceive for
this business, we have strengthened the strategic leadership with
the appointment of Stephen Teagle as Chief Executive, Partnerships
and Regeneration. Stuart Gibbons continues to lead the operating
businesses and to deliver the planned organic growth. We have
brought our Affordable Housing & Regeneration teams into a
combined business, in order to build upon their respective and
complementary knowledge and expertise. This will allow us to
strengthen our strategic offering and leadership in this area
whilst providing greater clarity to clients and external
investors.
CONSTRUCTION
Construction 2016 2015
Revenue (GBPm) 1,503.4 1,293.2
Profit from operations
(GBPm) 15.8 15.7
Operating profit
margin (%) 1.1 1.2
Order book (GBPbn) 3.5 3.8
During the year, the UK construction market continued to
generate an improving pipeline of projects at appropriate margins,
supported by the substantial infrastructure renewal required in the
UK. Build cost increases moderated, and the availability of skilled
labour improved across all regions. The Government's pipeline of
economic and social infrastructure work was positive, covering all
the key sectors in which we operate, including the public and
regulated sectors where over 90% of our order book is focused. We
were pleased with a number of significant framework appointments
and contract wins, although the speed of work coming through in the
public sector remains overall slower than expected. We continue to
follow our strategy of being selective about the work we bid for in
order to protect our margins and maintain our focus on cash.
Revenue increased by 16% to GBP1,503.4 million (2015: GBP1,293.2
million) benefitting from new contract wins.
Construction achieved a margin of 1.1% compared with 1.2% in
2015. Margins continued to be constrained, in particular in
Building, by contracts won in the more difficult economic climate.
Due to the finalisation of these contracts and the settlement of
their final accounts, these contracts are unlikely to achieve the
levels of margin at which we are now winning work and will
consequently hold back the reported figure in 2017.
Construction's result included the sale of our site
accommodation portfolio to a third party equipment hirer, achieving
a profit of GBP5.2 million on the disposal, and securing
competitive rates going forward.
We continued to manage our cash carefully and had a cash balance
in Construction of GBP161 million at the year-end (2015: GBP173
million) representing 11% of revenue.
Our order book is GBP3.5 billion (2015: GBP3.8 billion). Of the
total order book, 74% is in the public sector (2015: 72%), 16% is
in regulated industries (2015: 16%) and 10% is in the private
sector (2015: 12%).
Importantly, 74% of our order book is in frameworks (2015: 69%),
which is an unprecedented position for us. The level of work we
generate through frameworks is a significant advantage, as they
allow us to work collaboratively with clients, gain a deep
understanding of their needs and build up expertise through
delivering follow-on projects.
From 1 August 2016, as planned, Bill Hocking became Chief
Executive of Construction.
Building
2016 2015
Revenue (GBPm) 1,013.8 906.9
Profit from operations
(GBPm) 9.0 8.0
Operating profit
margin (%) 0.9 0.9
Order book (GBPm) 2,340 2,570
During the year, Building secured a number of key projects and
continued to implement its framework strategy. It won a place on
the Ministry of Defence's South West and South East Next Generation
Estate Contracts regional frameworks, which are worth up to GBP1
billion in total over four years. Building was also appointed to
the YORbuild2 framework, which has a potential pipeline of
approximately GBP1.9 billion over four years.
Education frameworks continue to provide a healthy pipeline of
work and Building is now a key contractor to the Education Funding
Agency (EFA), reaching financial close with the EFA for the GBP48.5
million North and North East Lincolnshire batch of schools and the
GBP41.9 million Greenwich, Lewisham and Croydon batch. Other
notable wins in the education sector included a contract with
Birmingham City University to build the GBP46 million
Conservatoire, a GBP62 million contract with Newcastle University
to construct the Park View Student Village and a GBP40 million
contract to provide student accommodation at Coventry University.
The business also secured a place on the four-year GBP4.0 billion
ProCure 22 framework for the Department of Health. The Scottish Hub
operations are also busy in education and in healthcare, including
the award of the GBP55 million Anderson High School in the Shetland
Islands, the GBP43.3 million construction of the new Largs
education campus for North Ayrshire Council and the GBP72 million
East Lothian Community Hospital.
In the Commercial building sector, Building won a GBP66 million
contract to construct the 2 Arena Central building in Birmingham,
which will include 210,000 sq ft of office space. Building was also
awarded a GBP40 million contract to construct 185,000 sq ft of
office space in the Forbury Place development in Reading.
Building delivered profit from operations of GBP9.0 million
(2015: GBP8.0 million), with a margin of 0.9% (2015: 0.9%).
Infrastructure
2016 2015
Revenue (GBPm) 489.6 386.3
Profit from operations
(GBPm) 6.8 7.7
Operating profit
margin (%) 1.4 2.0
Order book (GBPm) 1,160 1,230
Infrastructure secured several significant wins during the year.
Our joint venture with Costain was appointed as a delivery partner
by Highways England for its Smart Motorways programme, which is
worth a total of GBP1.5 billion. The joint venture has been
allocated three construction packages, with a value to Galliford
Try of more than GBP180 million. We are working on three of the
AMP5 water frameworks in England, Scotland and Wales and we have
been awarded a GBP75 million package of biomass energy plants. In
addition, the Manchester Airports Group, Network Rail and
Environment Agency frameworks all continue to provide good
workstreams.
Infrastructure's profit from operations was GBP6.8 million
(2015: GBP7.7 million), representing a margin of 1.4% (2015:
2.0%).
PPP Investments
2016 2015
Revenue (GBPm) 25.0 28.8
(Loss)/Profit from
operations (GBPm) (1.4) 3.7
Directors Valuation
(GBPm) 21.5 18.1
During the year, PPP Investments invested GBP6.6 million in
equity and disposed of investments generating an aggregate profit
on disposal of GBP0.5 million compared to a GBP6.6 million profit
on disposal in 2015.
In addition to making its own investments, PPP Investments
continued to provide good opportunities for our Construction and
facilities management businesses, with projects closed during the
year adding over GBP300 million to the order books for these
divisions.
There were delays to closing a number of PPP contracts in
Scotland in the first half of the financial year while a public
sector accounting classification issue was resolved. We took the
opportunity to review opportunities in other markets and have
developed new models for the student housing, energy service
company and private rented sectors, which see us well positioned
for the future.
HEALTH, SAFETY AND ENVIRONMENT
Keeping our people safe and healthy is our number one
priority.
Our centralised Health, Safety and Sustainability (HS&S)
function is independent of our business units and reports directly
to the Executive Board. Across the business we retain around 65
HS&S professionals and a BS OHSAS 18001 certified management
system that covers the entire Group. Every site is subject to a
monthly HS&S review, which covers on-site performance and -
crucially - planning for safety in the next four weeks. Our
behavioural safety programme, 'Challenging Beliefs, Affecting
Behaviour', is central to our approach.
Strong business growth and employee churn mean that we continue
to manage the challenge of inducting large numbers of new people on
our sites. We believe that continued training and effective
supervision, along with initiatives such as our 'Golden Rules' and
our new health and safety database, will help us to achieve
continuing improvement. We will also focus increasingly on health
and wellbeing, building on initiatives we are currently trialling
in our business.
BOARD
Peter Truscott was appointed as Chief Executive with effect from
1 October 2015 with Greg Fitzgerald becoming Non-Executive Chairman
on 1 January 2016.
Further to his previous announcement in 2014, Greg Fitzgerald
announced his decision to retire from the Board following
conclusion of the 2016 AGM on 11 November 2016. Following Greg
Fitzgerald stepping down, Peter Ventress, the current Deputy
Chairman and Senior Independent Director, will assume the role of
Non-Executive Chairman.
As previously announced, Ken Gillespie retired from the Board on
31 July 2016 and will step down from the Group in February
2017.
EXECUTIVE BOARD
From 6 September 2016 Stephen Teagle, Chief Executive of
Partnerships and Regeneration, Tom Nicholson, Linden Homes
Divisional Chairman East, and Andrew Hammond, Linden Homes
Divisional Chairman West, joined the Executive Board.
Consolidated income statement
for the year ended 30 June 2016
2016 2015
---------------------------------- ----- --------- ---------------------------------------
Pre-exceptional Exceptional
Total items items Total
Notes GBPm GBPm GBPm GBPm
---------------------------------- ----- --------- --------------- ----------- ---------
Group revenue 2 2,494.9 2,348.4 - 2,348.4
Cost of sales (2,223.2) (2,081.2) - (2,081.2)
---------------------------------- ----- --------- --------------- ----------- ---------
Gross profit 271.7 267.2 - 267.2
Administrative expenses (152.3) (144.2) (3.7) (147.9)
Profit on disposal of property
plant and equipment 5.2 - - -
Share of post tax profits from
joint ventures 19.2 5.0 - 5.0
---------------------------------- ----- --------- --------------- ----------- ---------
Profit before finance costs 143.8 128.0 (3.7) 124.3
Profit from operations 2 157.5 138.9 (3.7) 135.2
Share of joint ventures' interest
and tax (9.4) (6.6) - (6.6)
Amortisation of intangibles (4.3) (4.3) - (4.3)
---------------------------------- ----- --------- --------------- ----------- ---------
Profit before finance costs 143.8 128.0 (3.7) 124.3
---------------------------------- ----- --------- --------------- ----------- ---------
Finance income 3 7.6 4.6 - 4.6
Finance costs 3 (16.4) (14.9) - (14.9)
Profit before income tax 135.0 117.7 (3.7) 114.0
Income tax expense 4 (26.1) (22.5) 0.8 (21.7)
---------------------------------- ----- --------- --------------- ----------- ---------
Profit for the year 108.9 95.2 (2.9) 92.3
---------------------------------- ----- --------- --------------- ----------- ---------
Earnings per share
- Basic 6 132.5p 116.3p 112.8p
- Diluted 6 131.3p 114.4p 110.9p
---------------------------------- ----- --------- --------------- ----------- ---------
Consolidated statement of comprehensive income
for the year ended 30 June 2016
2016 2015
GBPm GBPm
------------------------------------------------------------ ------ -----
Profit for the year 108.9 92.3
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or
loss
Actuarial (losses) recognised on retirement benefit
obligations (11.9) (5.8)
Deferred tax on items recognised in equity that will
not be reclassified 1.0 1.2
Current tax through equity 2.3 0.5
------ -----
Total items that will not be reclassified to profit
or loss (8.6) (4.1)
Items that may be reclassified subsequently to profit
or loss
Movement in fair value of derivative financial instruments:
- Movement arising during the financial year (5.4) (0.4)
- Reclassification adjustments for amounts included
in profit or loss 1.2 0.1
Deferred tax on items recognised in equity that may
be reclassified (1.0) 1.0
------ -----
Total items that may be reclassified subsequently
to profit or loss (5.2) 0.7
Other comprehensive (expense) for the year net of
tax (13.8) (3.4)
------------------------------------------------------------- ------ -----
Total comprehensive income for the year 95.1 88.9
------------------------------------------------------------- ------ -----
Balance sheet
at 30 June 2016
2015
GBPm
2016 (Restated
Notes GBPm - note 1)
------------------------------------ ----- --------- ----------
Assets
Non-current assets
Intangible assets 16.7 20.9
Goodwill 7 135.5 135.5
Property, plant and equipment 19.1 20.8
Investments in joint ventures 24.8 9.2
Financial assets
- Available for sale financial
assets 16.9 11.0
Trade and other receivables 10 75.8 28.3
Retirement benefit asset 13 - 1.2
Deferred income tax assets 2.2 3.0
------------------------------------ ----- --------- ----------
Total non-current assets 291.0 229.9
Current assets
Inventories 0.1 0.3
Developments 9 820.8 813.3
Trade and other receivables 10 718.0 711.5
Cash and cash equivalents 8 166.3 164.9
------------------------------------ ----- --------- ----------
Total current assets 1,705.2 1,690.0
------------------------------------ ----- --------- ----------
Total assets 1,996.2 1,919.9
------------------------------------ ----- --------- ----------
Liabilities
Current liabilities
Financial liabilities
- Borrowings 8 (0.3) (0.3)
Trade and other payables 11 (1,059.2) (984.2)
Current income tax liabilities (12.2) (14.5)
Provisions for other liabilities
and charges (0.3) (0.4)
------------------------------------ ----- --------- ----------
Total current liabilities (1,072.0) (999.4)
------------------------------------ ----- --------- ----------
Net current assets 633.2 690.6
------------------------------------ ----- --------- ----------
Non-current liabilities
Financial liabilities
- Borrowings 8 (174.7) (181.9)
- Derivative financial liabilities (4.5) (0.3)
Retirement benefit obligations 13 (4.3) -
Other non-current liabilities 12 (139.1) (167.2)
Provisions for other liabilities
and charges (1.6) (1.9)
------------------------------------ ----- --------- ----------
Total non-current liabilities (324.2) (351.3)
------------------------------------ ----- --------- ----------
Total liabilities (1,396.2) (1,350.7)
------------------------------------ ----- --------- ----------
Net assets 600.0 569.2
------------------------------------ ----- --------- ----------
Equity
Ordinary shares 41.4 41.1
Share premium 194.4 191.8
Other reserves 4.8 4.8
Retained earnings 359.4 331.5
------------------------------------ ----- --------- ----------
Total equity attributable to owners
of the Company 600.0 569.2
------------------------------------ ----- --------- ----------
Consolidated statement of changes in equity
for the year ended 30 June 2016
Total
Ordinary Share Other Retained shareholders'
shares premium reserves earnings equity
Notes GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ----- -------- -------- --------- --------- --------------
Consolidated statement
At 1 July 2014 41.1 191.8 4.8 296.5 534.2
Profit for the year - - - 92.3 92.3
Other comprehensive (expense) - - - (3.4) (3.4)
---------------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for the year - - - 88.9 88.9
Transactions with owners:
Dividends 5 - - - (49.3) (49.3)
Share-based payments - - - 3.9 3.9
Purchase of own shares - - - (8.5) (8.5)
At 1 July 2015 41.1 191.8 4.8 331.5 569.2
Profit for the year - - - 108.9 108.9
Other comprehensive (expense) - - - (13.8) (13.8)
---------------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for the year - - - 95.1 95.1
Transactions with owners:
Dividends 5 - - - (59.3) (59.3)
Share-based payments - - - 4.0 4.0
Purchase of own shares - - - (11.9) (11.9)
Issue of shares 0.3 2.6 - - 2.9
At 30 June 2016 41.4 194.4 4.8 359.4 600.0
---------------------------------------- ----- -------- -------- --------- --------- --------------
Statement of cash flows
for the year ended 30 June 2016
2016 2015
Notes GBPm GBPm
------------------------------------------ ----- ------ -------
Cash flows from operating activities
Continuing operations
Profit before finance costs 143.8 124.3
Adjustments for:
Depreciation and amortisation 8.6 8.4
Profit on sale of property, plant
and equipment (5.2) -
Profit on sale of available for
sale financial assets (0.5) (7.0)
Share-based payments 4.0 3.9
Share of post-tax profits from
joint ventures (19.2) (5.0)
Movement on provisions (0.4) (0.6)
Other non-cash movements 0.4 0.7
------------------------------------------ ----- ------ -------
Net cash generated from/(used in)
operations before pension deficit
payments and changes in working
capital 131.5 124.7
Deficit funding payments to pension
schemes (6.6) (6.2)
------------------------------------------ ----- ------ -------
Net cash generated from/(used in)
operations before changes in working
capital 124.9 118.5
Decrease in inventories 0.2 -
(Increase) in developments (7.5) (101.6)
(Increase) in trade and other receivables (54.0) (190.0)
Increase/(decrease) in trade and
other payables 46.1 240.9
------------------------------------------ ----- ------ -------
Net cash generated from/(used in)
operations 109.7 67.8
Interest received 7.6 3.6
Interest paid (14.6) (11.7)
Income tax (paid)/received (25.3) (20.1)
------------------------------------------ ----- ------ -------
Net cash generated from operating
activities 77.4 39.6
------------------------------------------ ----- ------ -------
Cash flows from investing activities
Dividends received from joint ventures 3.6 0.4
Acquisition of available for sale
financial assets (6.6) (1.4)
Proceeds from available for sale
financial assets 1.2 12.8
Purchase of intangible assets (0.1) -
Business combinations - (21.6)
Cash acquired with acquired subsidiary
undertakings - 23.6
Acquisition of property, plant
and equipment (7.8) (6.7)
Proceeds from sale of property,
plant and equipment 10.4 0.1
------------------------------------------ ----- ------ -------
Net cash generated from investing
activities 0.7 7.2
------------------------------------------ ----- ------ -------
Cash flows from financing activities
Net proceeds from issue of ordinary
share capital 2.9 -
Purchase of own shares (11.9) (8.5)
Increase in borrowings (8.4) 35.5
Dividends paid to Company shareholders (59.3) (49.3)
------------------------------------------ ----- ------ -------
Net cash (used in) financing activities (76.7) (22.3)
------------------------------------------ ----- ------ -------
Net increase in cash and cash equivalents 1.4 24.5
------------------------------------------ ----- ------ -------
Cash and cash equivalents at 1
July 164.9 140.4
------------------------------------------ ----- ------ -------
Cash and cash equivalents at 30
June 8 166.3 164.9
------------------------------------------ ----- ------ -------
Notes to the consolidated financial statements
1. Basis of preparation
This consolidated financial information has been prepared in
accordance with the Listing Rules of the Financial Conduct
Authority and uses EU adopted International Accounting Standards
(IASs), International Financial Reporting Standards (IFRSs), IFRS
Interpretations committee and those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The accounting
policies adopted are consistent with those described in the Annual
Report and Financial Statements 2015 which have not changed
significantly, other than updating the Group's policy on timing of
recognition of conditional land acquisitions as set out in the
inventories and developments policy below. The financial
information set out in this document does not constitute statutory
accounts for the years ended 30 June 2015 or 30 June 2016 but is
derived from the Annual Report and Financial Statements 2016. The
Annual Report and Financial Statements for 2015 have been delivered
to the Registrar of Companies and the Annual Report and Financial
Statements for 2016 will be delivered to the Registrar of Companies
in due course. The auditors have reported on those accounts and
have given an unqualified report which does not contain a statement
under Chapter 3 of Part 16 of the Companies Act 2006.
Land inventory is recognised at the time a liability is
recognised. Previously the Group generally recognised land
inventory after the exchange of conditional contracts, when it was
considered virtually certain the contract would be completed.
Having completed a review of the policy in the year, and a
comparison of our sector peer group, the Group has determined it is
more appropriate to recognise land inventory on unconditional
exchange of contract or once the acquisition has completed. This
had the effect of reducing land inventory and development land
payables at 30 June 2016 by GBP105 million, and reducing the
interest charge on discounted payables by GBP0.6 million in the
year. The Group has restated its 30 June 2015 land inventory and
development land payables gures accordingly, by GBP166 million, but
determined that the impact on previous period results and reserves
was not material.
Full financial statements that comply with IFRS are included in
the Annual Report and Financial Statements 2016 which will be made
available to shareholders in October 2016 and will be available at
www.gallifordtry.co.uk.
2. Segmental reporting
Segmental reporting is presented in the consolidated 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,
segment 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
operating segments as Linden Homes; Partnerships &
Regeneration; Construction, including Building and Infrastructure;
and PPP Investments. The business of each segment is described in
the Strategic Report.
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.
Primary reporting format - business segments
Construction
------------------------- ------- --------------- --------------------------------- ------------ ------- -------
Linden Partnerships PPP Central
Homes & Regeneration Building Infrastructure Total Investments costs Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Year ended 30 June 2016
Group revenue and share
of joint ventures'
revenue 840.8 300.6 1,013.8 489.6 1,503.4 25.0 0.6 2,670.4
Share of joint ventures'
revenue (132.3) (15.5) (0.7) (9.8) (10.5) (17.2) - (175.5)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Group revenue 708.5 285.1 1,013.1 479.8 1,492.9 7.8 0.6 2,494.9
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Segment result:
Profit/(loss) from
operations
before share of joint
ventures' profit 120.8 9.6 8.9 6.8 15.7 (1.4) (15.8) 128.9
Share of joint ventures'
profit 26.4 2.1 0.1 - 0.1 - - 28.6
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit/(loss) from
operations
* 147.2 11.7 9.0 6.8 15.8 (1.4) (15.8) 157.5
Share of joint ventures'
interest and tax (8.7) (0.7) - - - - - (9.4)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit/(loss) before
finance
costs, amortisation and
taxation 138.5 11.0 9.0 6.8 15.8 (1.4) (15.8) 148.1
Finance income 6.4 0.3 - 0.5 0.5 0.8 (0.4) 7.6
Finance (costs) (46.6) (0.8) (0.2) - (0.2) (1.1) 32.3 (16.4)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit/(loss) before
amortisation
and taxation 98.3 10.5 8.8 7.3 16.1 (1.7) 16.1 139.3
Amortisation of
intangibles (1.0) - (2.2) - (2.2) - (1.1) (4.3)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit before taxation 97.3 10.5 6.6 7.3 13.9 (1.7) 15.0 135.0
Income tax expense (26.1)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit for the year 108.9
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Year ended 30 June 2015
Group revenue and share
of joint ventures'
revenue 779.0 329.4 906.9 386.3 1,293.2 28.8 0.3 2,430.7
Share of joint ventures'
revenue (47.4) (10.8) (1.1) (9.9) (11.0) (13.1) - (82.3)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Group revenue 731.6 318.6 905.8 376.4 1,282.2 15.7 0.3 2,348.4
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Segment result:
Profit/(loss) from
operations
before share of joint
ventures' profit 113.9 8.5 7.7 7.7 15.4 3.7 (14.2) 127.3
Share of joint ventures'
profit 10.4 0.9 0.3 - 0.3 - - 11.6
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit/(loss) from
operations
* 124.3 9.4 8.0 7.7 15.7 3.7 (14.2) 138.9
Exceptional items - - (3.7) - (3.7) - - (3.7)
Share of joint ventures'
interest and tax (6.0) (0.5) - - - (0.1) - (6.6)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit/(loss) before
finance
costs, amortisation and
taxation 118.3 8.9 4.3 7.7 12.0 3.6 (14.2) 128.6
Finance income 4.2 - - 0.8 0.8 - (0.4) 4.6
Finance (costs) (42.7) (0.3) (0.8) - (0.8) (0.6) 29.5 (14.9)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit/(loss) before
amortisation
and taxation 79.8 8.6 3.5 8.5 12.0 3.0 14.9 118.3
Amortisation of
intangibles (1.0) - (2.2) - (2.2) - (1.1) (4.3)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit before taxation 78.8 8.6 1.3 8.5 9.8 3.0 13.8 114.0
Income tax expense (21.7)
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
Profit for the year 92.3
------------------------- ------- --------------- -------- -------------- ------- ------------ ------- -------
* Profit from operations is stated before finance costs,
amortisation, exceptional items, share of joint ventures' interest
and tax and taxation.
Inter-segment revenue, which is priced on an arm's length basis,
is eliminated from Group revenue above. In the year to 30 June 2016
this amounted to GBP79.9 million (2015: GBP97.9 million) of which
GBP35.7 million (2015: GBP43.1 million) was in Building, GBP42.9
million (2015: GBP53.5 million) was in Infrastructure and GBP1.3
million (2015: GBP1.3 million) was in central costs.
Balance Sheet
Construction
---------------- ----- ------- --------------- --------------------------------- ------------ ------- ---------
Linden Partnerships PPP
Homes & Regeneration Building Infrastructure Total Investments Central Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
30 June 2016
Goodwill
& intangible
assets 53.4 6.0 47.7 37.2 84.9 - 7.9 152.2
Working capital
employed 601.7 38.0 (81.6) (74.0) (155.6) 15.4 (43.0) 456.5
Net cash/(debt) 8 (525.0) (12.1) 90.1 71.0 161.1 (7.8) 375.1 (8.7)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Net assets 130.1 31.9 56.2 34.2 90.4 7.6 340.0 600.0
Total Group
liabilities (1,396.2)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Total Group
assets 1,996.2
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
30 June 2015
Goodwill
& intangible
assets 54.4 6.0 49.9 37.2 87.1 - 8.9 156.4
Working capital
employed 615.5 2.4 (126.6) (54.0) (180.6) 8.0 (15.2) 430.1
Net cash/(debt) 8 (560.1) 15.0 127.6 45.1 172.7 1.0 354.1 (17.3)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Net assets 109.8 23.4 50.9 28.3 79.2 9.0 347.8 569.2
Total Group
liabilities (1,350.7)
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Total Group
assets 1,919.9
---------------- ----- ------- --------------- -------- -------------- ------- ------------ ------- ---------
Return on net assets for Linden Homes is calculated as Linden
Homes EBITA divided by average of the aggregate of Linden Homes and
Central net assets.
3. Net finance costs
2016 2015
GBPm GBPm
----------------------------------------------------- ------ ------
Interest receivable on bank deposits 0.1 0.1
Interest receivable from joint ventures 7.0 3.5
Net finance income on retirement benefit obligations 0.2 0.2
Unwind of discount on shared equity receivables - 0.8
Other 0.3 -
----------------------------------------------------- ------ ------
Finance income 7.6 4.6
Interest payable on borrowings (15.5) (12.3)
Unwind of discounted payables (0.8) (2.0)
Other (0.1) (0.6)
----------------------------------------------------- ------ ------
Finance costs (16.4) (14.9)
Net finance costs (8.8) (10.3)
----------------------------------------------------- ------ ------
4. Income tax expense
2016 2015
GBPm GBPm
---------------------------------------------------------- ----- -----
Analysis of expense in year
Current year's income tax
Current tax 24.4 26.2
Deferred tax - (3.4)
Adjustments in respect of prior years
Current tax 0.9 (3.5)
Deferred tax 0.8 2.4
----------------------------------------------------------- ----- -----
Income tax expense 26.1 21.7
----------------------------------------------------------- ----- -----
Tax on items recognised in other comprehensive income
Deferred tax expense/(credit) for share-based payments 1.8 (1.0)
Current tax (credit) for retirement benefit obligations (1.3) -
Current tax (credit) for share-based payments (1.0) (0.5)
Deferred tax (credit) on derivative financial instruments (0.8) -
Deferred tax (credit) on retirement benefit obligations (1.0) (1.2)
----------------------------------------------------------- ----- -----
Tax recognised in other comprehensive income (2.3) (2.7)
----------------------------------------------------------- ----- -----
Total taxation 23.8 19.0
----------------------------------------------------------- ----- -----
The standard rate of Corporation Tax in the UK changed from 21%
to 20% with effect from 1 April 2015. Accordingly, the Group's
profits for the accounting period to 30 June 2015 were taxed at a
blended standard rate of 20.75%; and for the period to 30 June 2016
are taxed at the standard rate of 20.0%.
5. Dividends
2016 2015
-------------------------------- --------------- ---------------
pence per pence per
GBPm share GBPm share
-------------------------------- ---- --------- ---- ---------
Previous year final 37.8 46.0 31.3 38.0
Current period interim 21.5 26.0 18.0 22.0
-------------------------------- ---- --------- ---- ---------
Dividend recognised in the year 59.3 72.0 49.3 60.0
-------------------------------- ---- --------- ---- ---------
The following dividends were declared by the Company in respect
of each accounting period presented:
2016 2015
------------------------------ --------------- ---------------
pence per pence per
GBPm share GBPm share
------------------------------ ---- --------- ---- ---------
Interim 21.5 26.0 18.0 22.0
Final 46.4 56.0 37.8 46.0
------------------------------ ---- --------- ---- ---------
Dividend relating to the year 67.9 82.0 55.8 68.0
------------------------------ ---- --------- ---- ---------
The directors are proposing a final dividend in respect of the
financial year ended 30 June 2016 of 56 pence per share, bringing
the total dividend in respect of 2016 to 82 pence per share (2015:
68 pence). The final dividend will absorb approximately GBP46.4
million of equity. Subject to shareholder approval at the AGM to be
held on 11 November 2016, the dividend will be paid on 23 November
2016 to shareholders who are on the register of members on 28
October 2016.
6. Earnings Per Share
Basic and diluted earnings per share (EPS)
Basic EPS 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
Trust, which are treated as cancelled.
Under normal circumstances, 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 effect amounts
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 earnings and weighted average number of shares used in the
calculations are set out below.
2016 2015
------------------------------- -------------------------------- -------------------------------
Weighted Weighted
average Per share average Per share
Earnings number of amount Earnings number of amount
GBPm shares pence GBPm shares pence
------------------------------- -------- ----------- --------- -------- ---------- ---------
Basic EPS - pre-exceptional
Earnings attributable
to ordinary shareholders
pre-exceptional items 108.9 82,166,065 132.5 95.2 81,833,586 116.3
Basic EPS
Earnings attributable
to ordinary shareholders
post-exceptional items 108.9 82,166,065 132.5 92.3 81,833,586 112.8
Effect of dilutive securities:
Options 748,016 1,400,331
Diluted EPS 108.9 82,914,081 131.3 92.3 83,233,917 110.9
------------------------------- -------- ----------- --------- -------- ---------- ---------
7. Goodwill
GBPm
------------------------------------------------------------------ -----
Cost
At 1 July 2014 115.7
Additions in year to 30 June 2015 20.5
------------------------------------------------------------------ -----
At 30 June 2015 and 30 June 2016 136.2
------------------------------------------------------------------ -----
Aggregate impairment at 1 July 2014, 1 July 2015 and 30 June 2016 (0.7)
------------------------------------------------------------------ -----
Net book amount
At 30 June 2015 and 30 June 2016 135.5
------------------------------------------------------------------ -----
30 June 2014 115.0
------------------------------------------------------------------ -----
The increase in goodwill in the year to 30 June 2015 arose from
the acquisition of Miller Construction and Shepherd Homes. This was
allocated to the Building and Linden Homes segments
respectively.
Goodwill is allocated to the Group's CGUs identified according
to business segment. The goodwill is attributable to the following
business segments:
2016 2015
GBPm GBPm
---------------------------- ----- -----
Linden Homes 52.5 52.5
Partnerships & Regeneration 5.8 5.8
Building 40.0 40.0
Infrastructure 37.2 37.2
---------------------------- ----- -----
135.5 135.5
---------------------------- ----- -----
Goodwill is tested for impairment at least annually. The
recoverable amount of a CGU is determined based on value in use
calculations. These calculations use pre-tax cash flow projections
based on future financial budgets approved by the Board, based on
past performance and its expectation of market developments. The
key assumptions within these budgets relate to revenue and the
future profit margin achievable, in line with our strategy as set
out in the Strategic Report. Future budgeted revenue is based on
management's knowledge of actual results from prior years and
latest forecasts for the current year, along with the existing
secured works, management's expectation of the future level of work
available within the market sector and expected changes in selling
volumes and prices for completed houses. In establishing future
profit margins, the margins currently being achieved are considered
in conjunction with expected inflation rates in each cost category
and to reflect the current market value of land being acquired.
8. Cash and cash equivalents
2016 2015
GBPm GBPm
---------------------------------------------------- ------- -------
Net (debt)
Cash and cash equivalents excluding bank overdrafts 166.3 164.9
Current borrowings (0.3) (0.3)
Non-current borrowings (174.7) (181.9)
Net (debt) (8.7) (17.3)
---------------------------------------------------- ------- -------
9. Developments
2015
GBPm
2016 (Restated
GBPm - note 1)
----------------- ----- ----------
Land 538.7 579.3
Work in progress 282.1 234.0
----------------- ----- ----------
820.8 813.3
----------------- ----- ----------
10. Trade and other receivables
2016 2015
GBPm GBPm
---------------------------------------------- ----- -----
Amounts falling due within one year:
Trade receivables 162.6 178.2
Less: provision for impairment of receivables (0.8) (1.6)
---------------------------------------------- ----- -----
Trade receivables - net 161.8 176.6
Amounts recoverable on construction contracts 283.7 260.4
Amounts due from joint ventures 125.3 161.2
Other receivables 49.6 46.4
Prepayments and accrued income 97.6 66.9
---------------------------------------------- ----- -----
718.0 711.5
---------------------------------------------- ----- -----
2016 2015
GBPm GBPm
------------------------------------------- ----- -----
Amounts falling due in more than one year:
Amounts due from joint ventures 75.4 27.8
Other receivables 0.4 0.5
------------------------------------------- ----- -----
75.8 28.3
------------------------------------------- ----- -----
11. Trade and other payables
2015
GBPm
2016 (Restated
GBPm - note 1)
------------------------------------------------------- ------- ----------
Payments received on account on construction contracts 77.8 32.1
Trade payables 296.6 270.6
Development land payables 104.2 94.6
Amounts due to joint ventures 31.9 15.9
Other taxation and social security payable 17.0 25.2
Other payables 7.0 3.3
Accruals and deferred income 524.7 542.5
------------------------------------------------------- ------- ----------
1,059.2 984.2
------------------------------------------------------- ------- ----------
12. Other non-current liabilities
2015
GBPm
2016 (Restated
GBPm - note 1)
----------------------------- ----- ----------
Development land payables 98.6 130.2
Other payables 0.6 3.4
Accruals and deferred income 39.9 33.6
----------------------------- ----- ----------
139.1 167.2
----------------------------- ----- ----------
13. Retirement benefit obligations
All employees are entitled to join the Galliford Try Pension
Scheme, a defined contribution scheme established as a stakeholder
plan, with a company contribution based on a scale dependent on the
employee's age and the amount they choose to contribute. The Group
also operates three defined benefit pension schemes, all of which
are closed to future service accrual.
Pension costs for the schemes were as follows:
2016 2015
GBPm GBPm
----------------------------------------------------------- ----- -----
Defined benefit schemes - expense recognised in the income
statement 0.2 0.2
Defined contribution schemes 17.1 14.2
----------------------------------------------------------- ----- -----
Total included within employee benefit expenses 17.3 14.4
----------------------------------------------------------- ----- -----
The principal actuarial assumptions used in the calculation of
the defined benefit schemes are as follows:
2016 2015
----------------------------------------- ----- -----
Rate of increase in pensionable salaries n/a n/a
Rate of increase in pensions in payment 2.90% 3.25%
Discount rate 3.00% 3.75%
Retail price inflation 3.00% 3.35%
Consumer price inflation 2.00% 2.35%
----------------------------------------- ----- -----
The fair value of the assets and present value of the
obligations at 30 June of the Group's defined benefit arrangements
are as follows:
2016 2015
GBPm GBPm
--------------------------------------------- ------- -------
Fair value of plan assets 231.4 220.1
Present value of defined benefit obligations (235.7) (218.9)
--------------------------------------------- ------- -------
(Deficit)/surplus in scheme recognised as
non-current (liability)/asset (4.3) 1.2
--------------------------------------------- ------- -------
14. Share-based payments
The Company operates performance-related share incentive plans
for executives. The Company also operates sharesave schemes. The
total charge for the year relating to employee share-based payment
plans was GBP4.0 million (2015: GBP3.9 million), all of which
related to equity-settled share-based payment transactions. After
deferred tax, the total charge was GBP1.4 million (2015: GBP4.9
million).
15. Guarantees and contingent liabilities
Galliford Try 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 and joint ventures, amounting to
GBP313.8 million (2015: GBP312.3 million).
Disputes arise in the normal course of business, some of which
lead to litigation or arbitration procedures. The directors make
proper provision in the financial statements when they believe a
liability exists. 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 adverse effect on the
Group's financial position.
16. Post balance sheet events
No matters have arisen since the year end that require
disclosure in the financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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