TIDMGFRD
RNS Number : 0880R
Galliford Try Holdings PLC
04 March 2021
4 MARCH 2021
GALLIFORD TRY HOLDINGS PLC
HALF YEAR REPORT FOR THE SIX MONTHSED 31 DECEMBER 2020
Return to profitability and resumption of dividend. Strong
balance sheet and order book provide confidence for the future.
-- Profit before tax of GBP4.1m (H1 2020(1) : GBP5.6m
pre-exceptional loss) and divisional operating margin of 1.6%, in
line with our expectations and strategy for sustainable earnings
growth.
-- Well-capitalised balance sheet, with average month-end cash
for the period of GBP158m and PPP asset portfolio of GBP44m.
-- High quality order book of GBP3.3bn (H1 2020: GBP3.2bn) in
line with our risk-focused approach.
-- Business well placed with market leading sector positions in
our chosen public and regulated markets, underpinned by significant
opportunities.
-- All projects continue to be fully operational and delivering
near normal productivity; no use of Government Covid-19 support in
FY21.
-- Commitment to operating sustainability reflected by our
long-term inclusion in the FTSE4Good Index.
-- Resumption of dividend under a new and enhanced dividend
policy, with an interim dividend of 1.2p per share declared.
Continuing operations: H1 2021 H1 2020 H1 2020
Pre-exceptional Post-exceptional
(1) (1)
Revenue GBP542m GBP636m GBP668m
Operating profit/(loss) before
amortisation GBP3.9m GBP(6.7)m GBP15.5m
Profit/(loss) before tax GBP4.1m GBP(5.6)m GBP16.6m
Earnings/(loss) per share 3.4p (4.1)p 11.2p
Interim dividend per share 1.2p 0.0p 0.0p
Order book GBP3.3bn GBP3.2bn GBP3.2bn
(1) There were no exceptional items in H1 2021 (H1 2020:
GBP22.2m exceptional profit before tax)
Bill Hocking, Chief Executive, commented:
"The first half of the financial year has seen our people
continuing to respond excellently to the challenge of the Covid-19
pandemic, maintaining the highest standards on our sites and
protecting the health, safety and wellbeing of our staff, clients
and stakeholders.
We have a strong order book in our chosen sectors. We are
encouraged by the expected future demand across our building,
highways and environment businesses, as we maintain our disciplined
approach to project selection and risk management. We welcome the
publication of the Government's Construction Playbook, which aligns
with our own focus on delivering excellence.
I am delighted to report a return to profitability in the half
year, in line with our plans and demonstrating the benefit of our
strategic focus. We also announce today a resumption of dividend
payments and enhanced dividend policy for the Group going
forward.
I am confident for the future. Our strategy remains focused on
sustainable growth, careful cash management and margin progression
to drive long-term value creation."
Enquiries to:
Bill Hocking, Chief Executive
Galliford Try Andrew Duxbury, Finance Director 01895 855001
Tulchan Communications James Macey White, Giles Kernick 020 7353 4200
This announcement contains inside information. The person
responsible for making this announcement on behalf of Galliford Try
is Kevin Corbett, General Counsel & Company Secretary.
Galliford Try's next Trading Update is scheduled for 15 July
2021.
Presentations
A conference call for analysts and institutional investors will
be held at 09:30am GMT today, Thursday 4 March 2021. To register
for this event please follow this link:
https://webcasting.brrmedia.co.uk/broadcast/601d2b94a6bfbf43d06ada5d
Should you wish to ask a question, please dial-in on +44 (0)330
336 9126 using confirmation code 4589402, it will not be possible
to submit a question via the webcast link.
An open presentation and Q&A session for retail investors
will be held on Monday 8 March 2021 at 12.30pm GMT. Investors can
register for the event via this link
https://www.investormeetcompany.com/galliford-try-holdings-plc/register-investor
STRATEGY
Our strategy is underpinned by our commitment to operating
sustainably, balancing financial performance with our obligations
to all stakeholders, to create long-term value.
The Group is focused on construction in the public and regulated
sectors, and for high-quality private sector clients, through our
regional building businesses and national highways and environment
businesses.
- Building operates across England and Scotland and has proven
expertise in markets with significant future opportunities,
particularly education, defence, health, and the commercial
sectors.
- Highways works with both Highways England and Local Authorities in England.
- Environment specialises in water and wastewater services,
primarily through frameworks in England and Scotland.
We continue to develop our Facilities Management, Investments
and co-development businesses which provide lower risk margin
enhancing returns.
The Group has a clear strategy to retain our strong platform for
sustainable growth, with a particular focus on our progressive
culture, risk management and commercial discipline; to improve our
operational performance and drive margin progression; and to
deliver strong predictable cash flows, margin growth and
sustainable returns.
Risk management and order book
The Group's strategy is founded on risk management and
commercial discipline, and we remain selective about the contracts
that we take on. This approach is reflected in the contracts in our
order book, with 87% of work through frameworks.
At 31 December 2020 the Group had a high-quality order book of
GBP3.3bn (H1 2020: GBP3.2bn) of which 89% is in the public and
regulated sectors and 11% is in the private sector. 96% of
projected revenue for the current financial year is secured, and
76% is secured for the next financial year (H1 2020: 96% and 72%
respectively).
We welcome the publication of the Government's Construction
Playbook in December 2020. Its focus aligns with our own approach,
including for example our focus on values, long term client
relationships, modern methods of construction, sustainability, and
digital investment.
Financial targets and guidance
The Group's strategy and sector focus mean that we have been
able to operate normally during national lockdowns and are well
placed to emerge strongly from the Covid-19 pandemic. Specifically,
the Government's commitment to investment in infrastructure and the
built environment will provide further opportunities for the Group
to contribute to the UK's economic recovery from the pandemic.
The Group's medium term financial targets, which build on those
set out in September 2020, are:
- Revenue: Target range GBP1.2bn to GBP1.5bn, based on disciplined contract selection.
- Divisional operating margin: Minimum 2.0% across Building and
Infrastructure, pre-central costs, by 2022; targeting divisional
margins in excess of 2.5% in the medium term.
- Cash generative, with positive average month-end cash.
Further detail of our strategic ambitions will be provided with
our full year results in September.
As previously announced, the Group expects to report a profit in
the current financial year with divisional operating margins
(pre-central costs of circa GBP10m) expected to be 1.4% to 1.6% on
revenues of GBP1.1bn to GBP1.3bn. Average month end cash is now
expected to be in the range GBP145m to GBP165m, which is higher
than previous expectations.
Dividend policy and interim dividend
The Board recognises the importance of dividends to
shareholders, and in formulating its dividend policy has taken into
account the Group's return to profitability, its strong balance
sheet and high quality order book as well as its longer term
prospects.
The Board is committed to maintaining a strong balance sheet and
continues to review the Group's overall capital position. Our
priorities are to support the Group's ongoing operational
requirements and strategic opportunities and to pay a dividend to
shareholders.
Consistent with this approach, the Group expects dividend per
share to increase with earnings, with dividend cover expected to be
in the range of 2.0-2.5 times earnings. Taking into account the
Group's available cash resources, the Board will continue to review
opportunities to further reduce the dividend cover in the
future.
The directors have reviewed the Group's results and outlook for
the current financial year and have declared an interim dividend of
1.2p per share which will be paid on 9 April 2021 to shareholders
on the register at close of business on 12 March 2021.
OUTLOOK
We continue to see a strong pipeline of opportunities in our key
sectors and in line with our disciplined approach to risk
management and contract selection. Our strong weighting in the
public and regulated sectors positions the Group to benefit from
increasing Government construction and infrastructure spending.
The Group is performing well with all of our projects fully
operational since the start of the financial year on 1 July 2020
and, operating in line with current Government and industry
guidelines, we are continuing to trade at near normal levels
through the ongoing lockdown. We do not currently anticipate
significant Covid-19 related disruption to our business through the
remainder of the financial year.
The Group is confident that it is well positioned to capitalise
on the current market opportunities. We have a strong balance sheet
and order book and are operating in sectors with significant future
opportunities.
FINANCIAL REVIEW
Revenue for the half year to 31 December 2020 was GBP541.7m (H1
2020 pre-exceptional: GBP636.2m), in line with our expected
performance. The prior period figure relates only to the continuing
business, following the demerger of our housebuilding business in
January 2020.
Operating profit before amortisation was GBP3.9m (H1 2020
pre-exceptional: GBP6.7m loss), with building and infrastructure
delivering a divisional operating margin of 1.6%. The improved
performance is in line with our targets for the financial year and
driven by the performance of newer contracts in the order book. Net
interest income of GBP1.2m was lower than the net income in the
prior year of GBP2.1m due to timing on recognition of PPP interest.
Profit before tax from continuing operations was GBP4.1m (H1 2020
pre-exceptional: GBP5.6m loss).
The Group withdrew from the Government's Job Retention Scheme in
August 2020, as previously announced, and is now in the process of
repaying all amounts that were claimed from the scheme in the
current financial year (GBP1.5m). The repayment of such amounts
will be charged in the second half of the year.
There were no exceptional items in the period. In the previous
half year to 31 December 2019 the Group reported a net exceptional
profit of GBP22.2m, being GBP28.0m exceptional net income on
settlement of a contract less GBP5.8m transaction costs related to
the demerger of our housebuilding business.
The taxation charge for continuing operations of GBP0.3m
reflects a forecast effective tax rate for continuing operations of
7.1% (H1 2020: 19.1%) for the year to 30 June 2021. We anticipate a
similar effective tax rate for the following financial year, due to
the utilisation of tax credits on historic contract losses.
A post-tax loss of GBP2.1m in discontinued operations was
recorded in the period, related to the finalisation of the disposal
of the Group's housebuilding business in January 2020.
Based on continuing earnings per share of 3.4p (H1 2020: loss
per share 4.1p), and the outlook for the remainder of the financial
year, the Board has declared an interim dividend of 1.2p (H1 2020:
0.0p).
As previously disclosed, the Group provided services in respect
of three contracts with entities owned by a major infrastructure
fund of a blue-chip listed company. Our work on these contracts
formally ceased on their termination in August 2018. Costs were
significantly impacted by client-driven scope changes and the Group
has submitted claims and variations to the value of circa GBP95m in
respect of these costs (June 2020: GBP95m). The Group has received
extensive advice on our entitlement, and we have been successful in
two adjudications supporting the validity of the Group's position.
Taking into account the requirements of IFRS 15, the Group had
constrained the revenue recognised in prior periods to the extent
that it was highly probable not to result in a significant reversal
in the future. At 31 December 2020 the Group has updated its
assessed recoverability in accordance with IFRS 15 and expected
credit loss provision in accordance with IFRS 9, both of which
assessments are unchanged in the period.
Our strong balance sheet is increasingly important to our
clients and supply chain. We have reported further improvements in
our prompt payment performance in the period to 31 December 2020,
with 92% of invoices paid within 60 days.
The Group is well capitalised and continues to focus on
disciplined cash management. The Group operates with daily net
cash, no debt facilities and no defined benefit pension
liabilities. Average month end cash balances for the first half
year were GBP158m, with the equivalent amount for the full
financial year now expected to be in the range GBP145m to GBP165m.
The Group also benefits from a PPP asset portfolio of GBP44m,
valued at an 8% discount rate.
OPERATING SUSTAINABLY
Fundamental to the Group's strategy is our belief that, for
long-term value creation, we must balance our financial performance
with delivering against the priorities of all our stakeholders.
We have continued to make significant progress against our
sustainability objectives and intend to publish updated targets
later in the year. Our overall ESG performance is reflected by our
continued inclusion in the FTSE4Good Index for the sixth
consecutive year, scoring 3.3 out of 5 - well above the
construction sector average of 1.9.
The six fundamental pillars of our sustainability strategy,
which are mapped to the UN Sustainable Development Goals, are as
follows:
Health, safety and wellbeing
The health, safety and wellbeing of our staff, subcontractors,
suppliers, clients and the public continues to be the Group's
number one priority, particularly in our response to the ongoing
Covid-19 pandemic.
Our focus remains on providing Covid-19 secure working
environments. All our workplaces have specific Covid-19 risk
assessments to ensure works are carried out in full compliance with
the latest Construction Leadership Council Site Operating
Procedures, as well as adhering to our own strict protocols. Recent
accreditation to the new ISO 45001 confirmed our focus on continual
improvement in Health and Safety.
Our industry-leading behavioural programme 'Challenging Beliefs,
Affecting Behaviour' forms the backbone of our approach to health
and safety. Having reduced our Accident Frequency Rate to 0.06, we
are placing increasing emphasis on proactive measures that will
lead to further improvements as we instil a zero-harm culture
across the business.
Environment and climate change
It is clearer than ever that the number one sustainability
priority for our clients, investors and regulators is tackling
climate change. We already manage and mitigate our environmental
impacts through our ISO 14001 certified management system.
We continue to reduce our carbon footprint, measured by Scope 1
& 2 emissions, focusing for instance on our offices, site
accommodation, fleet, and site waste. As an example of our
progress, over 35% of our fleet is now electric or hybrid and our
fleet carbon emissions will reduce by a further 60% over the next
five years.
We also help our clients to achieve their own carbon reduction
objectives by incorporating modern methods and sustainable
environmental considerations into our design standards and
construction practices.
Clients
Our clients expect us to design and construct assets to a high
quality. Through the creation of our Technical Services team, we
are investing in the development and deployment of new technology
to help us drive continuous improvement in the quality of the
assets we build. In Building, our client net promoter score is 89%
and customer satisfaction 83%.
Our people
Recognising the challenges of working on site, in the office or
at home during Covid-19, we have increased our focus on wellbeing.
Alongside our award-winning 'Be Well' initiative we have introduced
an extensive programme of support that is available to all of our
staff and their families.
Our commitment to developing the workforce of the future
continues to be recognised as we were again named a 'Top Graduate
& Apprentice Employer' by TheJobCrowd - the UK's only graduate
and apprentice employer ranking system based on employee feedback.
Galliford Try was listed as a top three employer in construction
and civil engineering, as well as being 18th out of 100 across all
graduate employers UK-wide.
Promoting inclusivity facilitates the diversity of thought,
innovative approaches and experiences that create stronger, better
balanced teams which enhance our offering for our stakeholders.
Since before the pandemic, our investment in agile working has
supported our ability to be flexible for those who have a
requirement or preference to work from home, so we can recruit from
a more diverse pool of candidates.
Our Employee Forum, chaired by the Group's Senior Independent
Non-executive Director, provides direct engagement with individuals
from across the Group and enables us to better understand how we
can be an employer of choice.
Communities
We are committed to creating a positive legacy in the
communities in which we operate and have launched a national
Galliford Try Social Value Calculator across the business, with a
focus on local employment, work placements, spend with the local
supply chain and volunteering. As Partners of the Considerate
Constructors Scheme, during 2020 we achieved an average score of
40.3, significantly higher than the industry average, and received
17 awards for the positive impact we make.
Supply chain
Our approach to our supply chain establishes and maintains
long-term trading relationships with key suppliers and
manufacturers. We have further improved our performance in respect
of the Government's Prompt Payment Code, and our Advantage through
Alignment programme provides selected suppliers with greater
insight into our operations and access to our training programmes.
We remain a Gold member and Partner of the Supply Chain
Sustainability School.
OPERATIONAL REVIEW
Building
H1 2021 H1 2020 Change
Revenue (GBPm) 374.5 423.5 (12)%
Operating profit before
amortisation (GBPm) 6.0 2.4 +3.6m
Operating margin (%) 1.6 0.6 +1.0ppt
Order book (GBPbn) 2.0 2.1 (5)%
Building operates through nine regional offices, serving a range
of public and commercial clients across the UK, with a focus on the
Education, Defence and Health sectors, where we have core and
proven strengths. Building has a substantial presence in Scotland
operating as Morrison Construction.
During the first six months of the year, Building won contracts
and framework positions in our chosen sectors. These appointments
included:
- the GBP10.5bn NHS Shared Business Services framework,
- the GBP2.1bn Construction West Midlands framework,
- the GBP105m commercial and PRS development at Monk Bridge for Highline Investments,
- the GBP60m Winchburgh Schools project in West Lothian for West Lothian Council, and
- the GBP50m refurbishment project at 280 Bishopsgate in London for Arax Properties.
Building generated revenue of GBP374.5m (H1 2020: GBP423.5m),
equating to 69% of the Group's revenue. The reduction from the
previous half year is in line with our expectations and reflects
our focus on selective bidding. Operating profit before
amortisation was GBP6.0m (H1 2020: GBP2.4m), resulting in a 1.6%
operating margin (H1 2020: 0.6%). The margin increase reflects
encouraging performance of projects that were added to the order
book in recent periods.
Building currently has an order book of GBP2.0bn (H1 2020:
GBP2.1bn), including 27% in Education, 19% in Defence and
Custodial, 20% in Facilities Management and 13% in Health.
Infrastructure
H1 2021 H1 2020(1) Change
Revenue (GBPm) 164.1 208.7 (21)%
Operating profit/(loss) before
amortisation (GBPm) 2.4 (1.4) +3.8m
Operating margin (%) 1.5 (0.7) +2.2ppt
Order book (GBPbn) 1.3 1.1 +18%
(1) Pre-exceptional
The Infrastructure business carries out civil engineering
projects across the UK, focused on Highways and Environment
(incorporating principally our activities in water and wastewater).
This business maintains long-term relationships with customers with
whom we have a strong track record, focusing on lower risk public
and regulated sector work and bids with early contractor
involvement.
During the first six months of the year, Infrastructure won
contracts and positions on frameworks worth GBP395m. These
appointments included lots 3 and 6 of Thames Water's GBP590m AMP7
four-year framework in the London region and the GBP85m M56
junctions 6 to 8 works for Highways England.
Infrastructure generated revenue of GBP164.1m (H1 2020:
GBP208.7m), 30% of the Group's revenue. The reduction compared to
the previous half year, which is in line with our expectations,
includes the impact of transitioning to the new water asset
management cycle. Operating profit before amortisation was GBP2.4m
(H1 2020: GBP1.4m loss), resulting in a 1.5% operating margin (H1
2020: loss 0.7%) providing encouragement for our margin improvement
plan.
Infrastructure currently has an order book of GBP1.3bn (H1 2020:
GBP1.1bn) comprising GBP576m in Highways and GBP681m in
Environment.
PPP Investments
H1 2021 H1 2020 Change
Revenue (GBPm) 3.1 3.8 (18)%
Operating (loss) (GBPm) (0.7) (0.9) +0.2m
PPP Investments delivers major building and infrastructure
projects through public private partnerships. The business leads
bid consortia and arranges finance, making equity investments and
managing construction through to operations. This activity supports
our Building and Infrastructure businesses, and the Group is
reviewing opportunities to increase its co-development and
investment activities, particularly in the private rental sector,
student accommodation and modular construction.
For the first half of 2021, revenue was GBP3.1m (H1 2020:
GBP3.8m), on which the loss from operations was GBP0.7m (H1 2020:
GBP0.9m). There were no asset disposals in the period.
At 31 December 2020 the Group held a PPP portfolio of GBP44.1m
(H1 2020: GBP38.7m) on its balance sheet, valued at a 8.0% discount
rate (H1 2020: 9.0%).
BOARD
On 30 September 2020, as previously announced, Jeremy Townsend,
Non-executive Director and Chair of the Audit Committee stepped
down from the Board. On the same date Marisa Cassoni, Non-executive
and then Chair of the Remuneration Committee assumed the role of
Chair of the Audit Committee with Terry Miller, Senior Independent
Non-executive Director, replacing Marisa as Chair of the
Remuneration Committee.
Condensed consolidated income statement
for the half year ended 31 December 2020 (unaudited)
Half Half year Half year Half Year to Year to Year
year to to year 30 June 30 June to
to 31 December 31 December to 2020 (audited) 2020 30 June
31 2019 2019 31 Pre-exceptional (audited) 2020
December Pre-exceptional Exceptional December items Exceptional (audited)
2020 items items 2019 items
(note 5) (note 5) Total
Total Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
3,
Revenue 4 541.7 636.2 32.0 668.2 1,089.6 32.0 1,121.6
Cost of sales (508.7) (608.9) (4.0) (612.9) (1,085.9) (6.3) (1,092.2)
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
Gross profit 33.0 27.3 28.0 55.3 3.7 25.7 29.4
Administrative
expenses (29.1) (34.0) (5.8) (39.8) (65.9) (0.6) (66.5)
Amortisation
of intangibles (1.0) (1.0) - (1.0) (2.1) - (2.1)
Share of post-tax
losses from
joint
ventures - - - - (0.2) - (0.2)
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
Operating
profit/(loss) 2.9 (7.7) 22.2 14.5 (64.5) 25.1 (39.4)
Finance income 6 1.9 2.6 - 2.6 5.8 - 5.8
Finance costs 6 (0.7) (0.5) - (0.5) (1.0) - (1.0)
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
Profit/(loss)
before income
tax 4.1 (5.6) 22.2 16.6 (59.7) 25.1 (34.6)
Income tax
(expense)/credit 7 (0.3) 1.0 (5.2) (4.2) 6.8 (4.8) 2.0
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
Profit/(loss)
from continuing
operations for
the period 3.8 (4.6) 17.0 12.4 (52.9) 20.3 (32.6)
(Loss)/profit
from
discontinued
operations, net
of income tax
for the period 8 (2.1) 48.1 - 48.1 353.0 - 353.0
Profit for the
period 1.7 43.5 17.0 60.5 300.1 20.3 320.4
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
Earnings per
share
Basic
- Profit/(loss) from continuing operations
attributable to ordinary shareholders
10 3.4p (4.1)p 11.2p (47.7)p (29.4)p
- Profit attributable to ordinary
shareholders
10 1.5p 39.3p 54.6p 270.9p 289.2p
Diluted
- Profit/(loss) from continuing operations
attributable to ordinary shareholders
10 3.4p (4.1)p 11.2p (47.7)p (29.4)p
- Profit attributable to ordinary
shareholders
10 1.5p 39.3p 54.6p 270.9p 289.2p
------------------ ------ --------- ---------------- ------------ --------- ---------------- ------------ ----------
There were no exceptional items in the period.
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated statement of comprehensive income
for the half year ended 31 December 2020 (unaudited)
Half year Half year
to to Year to
30 June
31 December 31 December 2020
2020 2019 (audited)
Notes GBPm GBPm GBPm
----------------------------------------------- ------ ------------- ------------- -----------
Profit for the period 1.7 60.5 320.4
Other comprehensive income/(expense):
Items that will not be reclassified
to profit or loss
Remeasurement of retirement benefit
obligations - discontinued operations 17 - 2.0 2.0
Deferred tax on items recognised in
equity that will not be reclassified
- discontinued operations - (1.2) -
Total items that will not be reclassified
to profit or loss - 0.8 2.0
Items that may be reclassified subsequently
to profit or loss
Movement relating to cashflow hedging:
- Movement arising during the financial
year - discontinued operations - 0.6 0.8
- Reclassification adjustments for
amounts included in profit or loss -
discontinued operations - (0.3) (0.4)
Net movement in fair value of PPP and
other investments - continuing operations 12 3.6 (2.1) (1.8)
Deferred tax on items recognised in
equity that may be reclassified - continuing
operations - (0.1) (0.1)
------------- ------------- -----------
Total items that may be reclassified
subsequently to profit or loss 3.6 (1.9) (1.5)
Other comprehensive income/(expense)
for the period net of tax 3.6 (1.1) 0.5
----------------------------------------------- ------ ------------- ------------- -----------
Total comprehensive income for the period 5.3 59.4 320.9
----------------------------------------------- ------ ------------- ------------- -----------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated balance sheet
at 31 December 2020 (unaudited)
31 December 31 December 30 June 2020
2020 2019
(audited)
Notes GBPm GBPm GBPm
------------------------------------------ ------ ------------ ------------ -------------
Assets
Non-current assets
Intangible assets 6.8 8.3 7.8
Goodwill 11 77.2 77.2 77.2
Property, plant and equipment 3.8 10.6 3.8
Right of use assets 20.0 23.0 22.8
Investments in joint ventures - 0.3 0.2
PPP and other investments 12 44.1 38.7 40.7
Retirement benefit asset - 0.9 1.0
Deferred income tax assets 7.3 - 4.3
------------------------------------------ ------ ------------ ------------ -------------
Total non-current assets 159.2 159.0 157.8
------------------------------------------ ------ ------------ ------------ -------------
Current assets
Trade and other receivables 13 230.9 358.0 247.5
Current income tax assets 15.8 13.5 23.1
Cash and cash equivalents 14 211.1 273.2 197.2
------------------------------------------ ------ ------------ ------------ -------------
Total current assets 457.8 644.7 467.8
------------------------------------------ ------ ------------ ------------ -------------
Assets classified as held for
sale 15 - 2,483.3 -
Total assets 617.0 3,287.0 625.6
------------------------------------------ ------ ------------ ------------ -------------
Liabilities
Current liabilities
Borrowings 14 - (378.4) -
Trade and other payables 16 (471.9) (582.5) (458.8)
Lease liabilities (8.2) (10.4) (9.5)
Provisions for other liabilities
and charges - (0.3) (13.9)
------------------------------------------ ------ ------------ ------------ -------------
Total current liabilities (480.1) (971.6) (482.2)
------------------------------------------ ------ ------------ ------------ -------------
Non-current liabilities
Financial liabilities
* Borrowings 14 - (120.0) -
* Derivatives financial liabilities 18 - (0.1) -
Deferred income tax liabilities - (0.1) -
Lease liabilities (11.2) (12.4) (12.8)
Provisions - (0.2) (10.1)
------------------------------------------ ------ ------------ ------------ -------------
Total non-current liabilities (11.2) (132.8) (22.9)
------------------------------------------ ------ ------------ ------------ -------------
Liabilities directly associated
with assets held for sale 15 - (1,483.7) -
Total liabilities (491.3) (2,588.1) (505.1)
------------------------------------------ ------ ------------ ------------ -------------
Net assets 125.7 698.9 120.5
------------------------------------------ ------ ------------ ------------ -------------
Equity
Ordinary shares 55.5 55.5 55.5
Share premium - 197.7 -
Other reserves 85.7 4.8 85.7
Retained earnings (15.5) 440.9 (20.7)
------------------------------------------ ------ ------------ ------------ -------------
Total shareholders' equity 125.7 698.9 120.5
------------------------------------------ ------ ------------ ------------ -------------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated statement of changes in equity
for the half year ended 31 December 2020 (unaudited)
Ordinary Share Other Retained Total shareholders'
shares premium reserves earnings equity
Notes GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ------ --------- --------- ---------- ---------- --------------------
As at 31 December 2020
At 30 June 2020 55.5 - 85.7 (20.7) 120.5
Profit for the period - - - 1.7 1.7
Other comprehensive income - - - 3.6 3.6
--------- --------- ---------- ---------- --------------------
Total comprehensive income for
the period - - - 5.3 5.3
Transactions with owners:
Dividends 9 - - - - -
Share-based payments - - - 0.3 0.3
Purchase of own shares - - - (0.4) (0.4)
At 31 December 2020 55.5 - 85.7 (15.5) 125.7
---------------------------------------- ------ --------- --------- ---------- ---------- --------------------
As at 31 December 2019
At 30 June 2019 55.5 197.7 4.8 421.3 679.3
Adjustment as a result of transition
to IFRS 16 on 1 July 2019 - - - (1.0) (1.0)
--------- --------- ---------- ---------- --------------------
Adjusted equity at 1 July 2019 55.5 197.7 4.8 420.3 678.3
Profit for the period - - - 60.5 60.5
Other comprehensive expense - - - (1.1) (1.1)
--------- --------- ---------- ---------- --------------------
Total comprehensive income for
the period - - - 59.4 59.4
Transactions with owners:
Dividends 9 - - - (38.9) (38.9)
Share-based payments - - - 0.1 0.1
At 31 December 2019 55.5 197.7 4.8 440.9 698.9
---------------------------------------- ------ --------- --------- ---------- ---------- --------------------
As at 30 June 2020 (audited)
At 30 June 2019 55.5 197.7 4.8 421.3 679.3
Adjustment as a result of transition
to IFRS 16 on 1 July 2019 - - - (1.0) (1.0)
----- -------- ----- -------- --------
Adjusted equity at 1 July 2019 55.5 197.7 4.8 420.3 678.3
Profit for the year - - - 320.4 320.4
Other comprehensive income - - - 0.5 0.5
----- -------- ----- -------- --------
Total comprehensive income for
the year - - - 320.9 320.9
Transactions with owners:
Dividends 9 - - - (38.9) (38.9)
Distribution of Galliford Try
Homes Ltd - - - (840.0) (840.0)
Capital reorganisation - (197.7) 80.9 116.8 -
Share-based payments - discontinued
operations - - - 0.2 0.2
At 30 June 2020 55.5 - 85.7 (20.7) 120.5
---------------------------------------- ----- -------- ----- -------- --------
The notes are an integral part of the condensed consolidated
half year financial statements.
Condensed consolidated statement of cash flows
for the half year ended 31 December 2020 (unaudited)
Half year
Half year to
to 31 December Year to
31 December 2019 (restated) 30 June
2020 (1) 2020 (audited)
Notes GBPm GBPm GBPm
----------------------------------------------------- ----- ------------ ---------------- ---------------
Cash flows from operating activities
Pre-exceptional profit for the year 1.7 43.5 300.1
Exceptional profit for the year - 17.0 20.3
------------ ---------------- ---------------
Profit for the year 1.7 60.5 320.4
Adjustments for:
Loss/(profit) for the year from discontinued
operations 2.1 (48.1) (353.0)
Income tax expense/(credit) - continuing operations 0.3 4.2 (2.0)
Net finance income - continuing operations (1.2) (2.1) (4.8)
------------ ---------------- ---------------
Operating profit/(loss) for continuing operations 2.9 14.5 (39.4)
Adjustments for continuing operations:
Depreciation and amortisation 7.4 7.1 13.8
Profit on sale of PPP and other investments - - (0.6)
Share-based payments 0.3 0.2 -
Movement on provisions (0.3) (0.3) 23.2
Other movements - 0.2 0.2
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash generated from/(used in) operations
before changes in working capital 10.3 21.7 (2.8)
Decrease/(increase) in trade and other receivables 17.8 (15.4) 128.5
(Decrease) in trade and other payables (0.8) (3.3) (257.1)
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash generated from/(used) in operations 27.3 3.0 (131.4)
Interest received 1.9 4.0 4.9
Interest paid (0.7) (0.5) (1.0)
Net surplus returned on wind up of defined
benefit pension scheme 1.0 - -
Income tax received 4.5 4.2 7.5
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash generated from/(used in) operating
activities from continuing operations 34.0 10.7 (120.0)
Net cash used in operating activities from
discontinued operations (2.6) (66.1) (32.1)
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash generated from/(used) in operating
activities 31.4 (55.4) (152.1)
Cash flows from investing activities
Amounts advanced to joint ventures (1.0) 0.4 (2.4)
Acquisition of PPP and other investments - - (6.6)
Proceeds from disposal of PPP and other investments 0.2 - 5.8
Acquisition of property, plant and equipment (0.7) (0.7) (1.4)
Proceeds from sale of property, plant and
equipment - 2.0 -
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash (used in)/generated from investing
activities from continuing operations (1.5) 1.7 (4.6)
Net cash (used in)/generated from investing
activities from discontinued operations (10.0) (70.7) 362.6
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash (used in)/generated from investing
activities (11.5) (69.0) 358.0
Cash flows from financing activities
Repayment of lease liabilities (5.6) (4.9) (10.0)
Purchase of own shares (0.4) - -
Repayment of borrowings - 120.0 -
Net dividends paid to Company shareholders - (38.9) (38.9)
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash (used in)/generated from financing
activities from continuing operations (6.0) 76.2 (48.9)
Net cash used in financing activities from
discontinued operations - - (101.4)
----------------------------------------------------- ----- ------------ ---------------- ---------------
Net cash (used in)/generated from financing
activities (6.0) 76.2 (150.3)
Net increase/(decrease) in cash and cash equivalents 13.9 (48.2) 55.6
----------------------------------------------------- ----- ------------ ---------------- ---------------
Cash and cash equivalents at beginning of
period 14 197.2 141.6 141.6
----------------------------------------------------- ----- ------------ ---------------- ---------------
Cash and cash equivalents at end of period 14 211.1 93.4 197.2
----------------------------------------------------- ----- ------------ ---------------- ---------------
1 The prior period cashflow statement has been restated to
correctly reflect the IFRS 16 lease depreciation (GBP4.5m), lease
interest paid (GBP0.5m) and lease liability payments (GBP4.9m)
which had been previously reflected in movement in trade
payables.
Notes to the condensed consolidated half year financial
statements
for the half year ended 31 December 2020 (unaudited)
1 Basis of preparation
Galliford Try Holdings plc is a public limited company
incorporated in England and Wales and domiciled in the UK. The
address of its registered office is Blake House, 3 Frayswater
Place, Cowley, Uxbridge, Middlesex, UB8 2AD. The Company has its
listing on the London Stock Exchange. This condensed consolidated
half year financial information was approved for issue on 4 March
2021.
Following the disposal of the Linden Homes and Partnerships
& Regeneration divisions of Galliford Try Limited (formerly
Galliford Try plc) effective from 3 January 2020, the entire issued
share capital of Galliford Try Holdings plc, was admitted to the
premium listing segment of the Official List of the FCA and to
trading on the main market for listed securities of the London
Stock Exchange with a corresponding cancellation of trading in all
shares of Galliford Try Limited (formerly Galliford Try plc).
Further details of the transaction and discontinued operations can
be found in note 8, in addition to the details within notes 9 and
32 of the Group's annual financial statements for the year ended 30
June 2020.
This condensed consolidated half year financial information does
not comprise statutory financial statements within the meaning of
Section 434 of the Companies Act 2006. Statutory financial
statements for the year ended 30 June 2020 were approved by the
board of directors on 16 September 2020 and delivered to the
Registrar of Companies. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement under Section
498 of the Companies Act 2006.This condensed consolidated half year
financial information has been reviewed, not audited. The auditors'
review opinion is included in this report.
This condensed consolidated half year financial information for
the half year ended 31 December 2020 has been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority and with IAS 34, "Interim financial
reporting" as adopted by the European Union. The condensed
consolidated half year financial information should be read in
conjunction with the annual financial statements for the year ended
30 June 2020, which have been prepared in accordance with IFRSs as
adopted by the European Union. UK International Accounting
Standards become effective for accounting periods beginning on or
after 1 January 2021 following the completion of the United
Kingdom's transition period for departing from the European Union
on 31 December 2020.
The Group's activities, together with the factors likely to
affect the future development, performance and position of the
business are set out in this half year report. The annual financial
statements for the year ended 30 June 2020 included the Group's
objectives, policies and processes for managing capital, its
financial risk management objectives, details of its financial
instruments and hedging activities and its exposure to credit risk
and liquidity risk.
The Group's cash forecasts incorporate appropriate contingencies
against plausible day-to-day downside risks, primarily the Group's
principal risks as disclosed previously. Against this base case, we
have stress-tested the forecasts and modelled the impact on cash
flow and liquidity of a number of downside scenarios related to our
principal risks, including the potential impact of Covid-19 as well
as a combined downside scenario that includes a number of these
sensitivities occurring together as well as the mitigations and
interventions available to manage the impact of one or more of the
downside scenarios occurring. Having reviewed these forecasts and
after making enquiries, the directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the condensed
consolidated half year financial information.
2 Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 30 June 2020.
There are no new material accounting standards that have
impacted on the Group's reported results in the period.
Critical accounting estimates and judgements
In the period, the Group has recorded a deferred tax asset in
respect of unutilised tax credits resulting from historic contract
losses. The Group has assessed that an asset equal to the value of
unutilised tax credits expected to be utilised over the next two
financial years is appropriate, as, based on the already secured
work for that timeframe, management have assessed it is probable
that the Group will have sufficient taxable profits to enable the
deferred tax asset to be recovered. Any remaining unutilised tax
credits have not been recognised.
The Group's other principal judgements and key sources of
estimation uncertainty remain unchanged since the year-end. The
principal judgements and key sources of estimation uncertainty are
set out in note 1 on pages 95-96 of the annual financial statements
for the year ended 30 June 2020.
The Group's five largest unagreed variations and claims
positions as at 31 December 2020 are summarised in aggregate below,
the most significant of which relates to three contracts with
entities owned by a major infrastructure fund of a blue-chip listed
company (note 13). Of these five projects, four are materially
complete with only one remaining on-site:
GBPm
--------------------------------------------------------------------- ------
Overall contract value (including revenue recognised for variations
and claims) 423.3
Revenue in the period 56.9
--------------------------------------------------------------------- ------
Total estimated end of contract variations and claims before
IFRS 15 constraints 165.7
--------------------------------------------------------------------- ------
Total constrained revenue recognised in respect of variations
and claims 66.9
--------------------------------------------------------------------- ------
These five positions represent the most significant estimates of
revenue.
3 Segmental reporting
Segmental reporting is presented in the condensed consolidated
half year 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, segmental 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 of the resulting Group to be Building,
Infrastructure, PPP Investments and Central (primarily representing
central overheads).
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.
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2020 GBPm GBPm GBPm GBPm GBPm
---------
Revenue 374.5 164.1 3.1 - 541.7
Operating profit/(loss) before amortisation
of intangibles 6.0 2.4 (0.7) (3.8) 3.9
Finance income - 0.1 1.8 - 1.9
Finance costs (0.2) (0.3) - (0.2) (0.7)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit/(loss) before amortisation
and taxation 5.8 2.2 1.1 (4.0) 5.1
Amortisation of intangible assets (0.5) - - (0.5) (1.0)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit before taxation 5.3 2.2 1.1 (4.5) 4.1
Income tax expense (0.3)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit for the period 3.8
---------------------------------------------- --------- --------------- ------------- -------- ------
PPP
Half year to 31 December 2019 - continuing Building Infrastructure Investments Central Total
operations GBPm GBPm GBPm GBPm GBPm
---------
Pre-exceptional revenue 423.5 208.7 3.8 0.2 636.2
Exceptional items (note 5) - 32.0 - - 32.0
---------------------------------------------- --------- --------------- ------------- -------- ------
Revenue 423.5 240.7 3.8 0.2 668.2
Pre-exceptional operating profit/(loss)
before amortisation of intangibles 2.4 (1.4) (0.9) (6.8) (6.7)
Exceptional items (note 5) - 28.0 - (5.8) 22.2
---------------------------------------------- --------- --------------- ------------- -------- ------
Operating profit/(loss) before amortisation
and taxation 2.4 26.6 (0.9) (12.6) 15.5
Finance income - - 2.4 0.2 2.6
Finance costs (1.8) (4.0) (0.9) 6.2 (0.5)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit/(loss) before amortisation
and taxation 0.6 22.6 0.6 (6.2) 17.6
Amortisation of intangible assets (0.5) - - (0.5) (1.0)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit before taxation 0.1 22.6 0.6 (6.7) 16.6
Income tax expense (4.2)
---------------------------------------------- --------- --------------- ------------- -------- ------
Profit for the period 12.4
---------------------------------------------- --------- --------------- ------------- -------- ------
PPP
Year ended 30 June 2020 (audited) Building Infrastructure Investments Central Total
- continuing operations GBPm GBPm GBPm GBPm GBPm
Pre-exceptional revenue 719.9 357.1 8.2 4.4 1,089.6
Exceptional items (note 5) - 32.0 - - 32.0
---------------------------------------------- --------- --------------- ------------- -------- --------
Revenue 719.9 389.1 8.2 4.4 1,121.6
Pre-exceptional operating profit/(loss)
before amortisation of intangibles (51.9) (1.8) (0.5) (8.2) (62.4)
Exceptional items (note 5) (2.0) 27.3 - (0.2) 25.1
---------------------------------------------- --------- --------------- ------------- -------- --------
Operating profit/(loss) before amortisation
and taxation (53.9) 25.5 (0.5) (8.4) (37.3)
Finance income - - 4.3 1.5 5.8
Finance costs (2.7) (5.8) (1.4) 8.9 (1.0)
---------------------------------------------- --------- --------------- ------------- -------- --------
(Loss)/profit before amortisation
and taxation (56.6) 19.7 2.4 2.0 (32.5)
Amortisation of intangible assets (1.0) - - (1.1) (2.1)
---------------------------------------------- --------- --------------- ------------- -------- --------
(Loss)/profit before taxation (57.6) 19.7 2.4 0.9 (34.6)
Income tax credit 2.0
---------------------------------------------- --------- --------------- ------------- -------- --------
(Loss) for the year (32.6)
---------------------------------------------- --------- --------------- ------------- -------- --------
Inter-segment revenue, which is priced on an arm's length basis,
is eliminated from revenue above. In the half year to 31 December
2020 this amounted to GBP20.2m (31 December 2019: GBP35.2m; 30 June
2020: GBP51.8m) for continuing operations, of which GBP0.1m (31
December 2019: GBP12.2m; 30 June 2020: GBP16.9m) was in Building,
GBP12.5m (31 December 2019: GBP13.7m; 30 June 2020: GBP21.9m) was
in Infrastructure and GBP7.6m (31 December 2019: GBP9.3m; 30 June
2020: GBP13.0m) was in Central costs.
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2020 GBPm GBPm GBPm GBPm GBPm
-------------------------------- ---------- --------------- ------------- -------- --------
Balance Sheet
Goodwill and intangible assets 43.4 37.2 - 3.4 84.0
Working capital employed (170.2) (28.3) 39.3 (10.2) (169.4)
Net cash 125.7 (62.1) (10.6) 158.1 211.1
Net assets (1.1) (53.2) 28.7 151.3 125.7
Total Group liabilities (491.3)
--------------------------------- --------- --------------- ------------- -------- --------
Total Group assets 617.0
--------------------------------- --------- --------------- ------------- -------- --------
PPP
Building Infrastructure Investments Central Total
Half year to 31 December 2019 GBPm GBPm GBPm GBPm GBPm
----------------------------------- ---------- --------------- ------------- -------- ----------
Balance Sheet
Goodwill and intangible assets 44.1 37.2 - 4.2 85.5
Working capital employed (59.5) 7.0 55.2 (163.7) (161.0)
Net cash 64.1 (99.6) (29.6) (160.1) (225.2)
------------------------------------ --------- --------------- ------------- -------- ----------
Net assets (excluding net assets
held for sale) 48.7 (55.4) 25.6 (319.6) (300.7)
Net assets held for sale(1) 999.6
------------------------------------ --------- --------------- ------------- -------- ----------
Total Group net assets 698.9
------------------------------------ --------- --------------- ------------- -------- ----------
Total Group liabilities (2,588.1)
------------------------------------ --------- --------------- ------------- -------- ----------
Total Group assets 3,287.0
------------------------------------ --------- --------------- ------------- -------- ----------
PPP
Building Infrastructure Investments Central Total
Year ended 30 June 2020 (audited) GBPm GBPm GBPm GBPm GBPm
----------------------------------- --------- --------------- ------------- -------- ----------
Balance Sheet
Goodwill and intangible assets 43.9 37.2 - 3.9 85.0
Working capital employed (160.7) (26.1) 37.7 (12.6) (161.7)
Net cash 111.1 (66.3) (10.0) 162.4 197.2
------------------------------------ --------- --------------- ------------- -------- ----------
Net assets (5.7) (55.2) 27.7 153.7 120.5
Total Group liabilities (505.1)
------------------------------------ --------- --------------- ------------- -------- ----------
Total Group assets 625.6
------------------------------------ --------- --------------- ------------- -------- ----------
(1) Linden Homes and Partnerships & Regeneration were
classified as assets held for sale as at 31 December 2019 due to
the disposal of those divisions to Vistry Group plc on 3 January
2020.
4 Revenue
Nature of revenue streams
(i) Building & Infrastructure segments
Our Construction business operates nationwide, working with
clients predominantly in the public and regulated sectors. Projects
include the construction of assets (with services including design
and build, construction only and refurbishment) in addition to the
maintenance, renewal, upgrading and managing of services across
utility and infrastructure assets.
Revenue stream Nature, timing of satisfaction of performance obligations
and significant payment terms
Fixed price A number of projects within these segments are undertaken
using fixed-price contracts.
Contracts are typically accounted for as a single performance
obligation; even when a contract (or multiple combined contracts)
includes both design and build elements, they are considered
to form a single performance obligation as the two elements
are not distinct in the context of the contract given that
each is highly interdependent on the other.
The Group typically receives payments from the customer
based on a contractual schedule of value that reflects the
timing and performance of service delivery. Revenue is therefore
recognised over time (the period of construction) based
on an input model (reference to costs incurred to date).
Un-invoiced amounts are presented as contract assets.
Management does not expect a financing component to exist.
-------------------------------------------------------------------
Cost-reimbursable A number of projects within these segments are undertaken
using open-book/cost-plus/target-price (possibly with a
pain/gain share mechanism) contracts.
Contracts are typically accounted for as a single performance
obligation with the majority of these contracts including
a build phase only.
The Group typically receives payments from the customer
based on actual costs incurred. Revenue is therefore recognised
over time (the period of construction) based on an input
model (reference to costs incurred to date). Un-invoiced
amounts are presented as contract assets.
Management does not expect a financing component to exist.
-------------------------------------------------------------------
(ii) Investments segment
Through public private partnerships, the business leads bid
consortia and arranges finance, makes debt and equity investments
(which are recycled) and manages construction through to
operations.
Revenue stream Nature, timing of satisfaction of performance obligations
and significant payment terms
PPP Investments The Group has investments in a number of PPP Special Purpose
Vehicles (SPVs), delivering major building and infrastructure
projects.
The business additionally provides management services to
the SPVs under Management Service Agreements (MSA). Revenue
for these services is typically recognised over time as
and when the service is delivered to the customer.
Revenue for reaching project financial close (such as success
fees) is recognised at a point in time, at financial close
(when control is deemed to pass to the customer).
---------------------------------------------------------------
Disaggregation of revenue
The Group derives its revenue from contracts with customers for
the transfer of goods and services that are predominantly
recognised over time. The split of revenue was GBP541.7m recognised
over-time and GBPnil recognised at a point in time (31 December
2019: GBP668.2m and GBPnil respectively; 30 June 2020: GBP1,120.8m
and GBP0.8m respectively).
5 Exceptional items
Half year Half year Year to 30
to to June 2020
31 December 31 December
2020 2019 (audited)
Continuing operations GBPm GBPm GBPm
----------------------------------------------- -------------- ------------- -----------
Revenue - impact of legacy contracts(1) - 32.0 32.0
Cost of sales - charge on legacy contracts(1) - (4.0) (4.0)
Cost of sales - restructure costs(2) - - (2.3)
Administrative expenses - restructure
costs(2) - - (0.6)
Administrative expenses - transaction
costs(3) - (5.8) -
Operating profit - 22.2 25.1
----------------------------------------------- -------------- ------------- -----------
There were no exceptional items in the period. The items in
respect of the prior periods were as follows:
1 The Group agreed settlement terms with a client in respect of
the final account of a major infrastructure project and the
settlement income of GBP32.0m was recognised (in revenue) net of
final cost estimates of GBP4.0m (in cost of sales) as exceptional
items.
2 Following the disposal of the housebuilding divisions and the
impact of the Covid-19 pandemic during 2020, the Group completed a
restructure exercise to reflect the revised size and structure of
the business, resulting in GBP2.9m of redundancy costs (of which
GBP2.3m was recorded in cost of sales and GBP0.6m was recorded in
administrative expenses).
3 The Group had incurred professional fees of GBP5.8m in respect
of the sale of the Group's housebuilding divisions on 3 January
2020 (which were recorded within administrative expenses). In the
2020 financial statements, these costs were treated as part of the
overall net gain on disposal.
6 Net finance income
Half year Half year Year to 30
to to June 2020
31 December 31 December
2020 2019 (audited)
Group - continuing operations GBPm GBPm GBPm
------------------------------------------ ------------- ------------- -----------
Interest receivable on bank deposits - 0.1 0.3
Interest receivable from PPP investments
and joint ventures 1.8 2.4 5.4
Other 0.1 0.1 0.1
------------------------------------------ ------------- ------------- -----------
Finance income 1.9 2.6 5.8
Other (including interest on lease
liabilities) (0.7) (0.5) (1.0)
------------------------------------------ ------------- ------------- -----------
Finance costs (0.7) (0.5) (1.0)
Net finance income 1.2 2.1 4.8
------------------------------------------ ------------- ------------- -----------
7 Income tax expenses
The taxation expense on profit for continuing operations for the
period of 7.1% (31 December 19: pre-exceptional rate of 19.1%, 30
June 2020: pre-exceptional rate of 11.4%) reflects the expected
continuing effective tax rate for the year to 30 June 2021. The
lower than standard rate reflects the anticipated utilisation of
tax credits on historic contract losses.
8 Discontinued operations
On 3 January 2020, the Group completed the disposal of the
Linden Homes and Partnerships & Regeneration divisions of
Galliford Try Limited (formerly Galliford Try plc) following the
implementation of a Group restructuring and scheme of arrangement
under Part 26 of the Companies Act 2006 becoming effective on 2
January 2020. In addition, certain other assets and liabilities
transferred to Vistry plc as part of this transaction. With effect
from 8:00 a.m. on 3 January 2020, 111,053,489 Galliford Try
Holdings plc shares with a nominal value of 50p each, being the
entire issued share capital of Galliford Try Holdings plc, was
admitted to the premium listing segment of the Official List of the
FCA and to trading on the main market for listed securities of the
London Stock Exchange with a corresponding cancellation of all
shares of Galliford Try plc. Further details can be found in notes
9 and 32 of the Group's annual financial statements for the year
ended 30 June 2020.
As a result of this disposal, the Linden Homes and Partnerships
& Regeneration segments have been classified as discontinued
operations.
The profit for the period (and associated comparative periods)
of these discontinued operations are as follows:
Half year to 31 December 2020
Central Total
Loss for the period from discontinued operations GBPm GBPm
--------------------------------------------------- -------- --------
Revenue - -
Operating loss and loss before taxation (2.6) (2.6)
Income tax expense 0.5 0.5
--------------------------------------------------- -------- --------
Loss for the period (2.1) (2.1)
--------------------------------------------------- -------- --------
These costs were primarily residual professional fees and other
costs relating to the transaction and discontinued operations. The
Group is not expecting to incur any further costs in respect of
discontinued operations.
Half year to 31 December 2019
Linden Partnerships
Profit for the period from Homes & Regeneration Central Total
discontinued operations GBPm GBPm GBPm GBPm
----------------------------------- ------- ---------------- -------- -------
Revenue 303.2 349.0 - 652.2
Profit from operations(1) 49.2 18.0 - 67.2
Share of joint ventures' interest
and tax (6.6) - - (6.6)
----------------------------------- ------- ---------------- -------- -------
Profit before finance costs,
amortisation and tax 42.6 18.0 - 60.6
Net finance costs (17.5) (0.8) 17.4 (0.9)
Amortisation costs - (1.0) - (1.0)
----------------------------------- ------- ---------------- -------- -------
Profit before taxation 25.1 16.2 17.4 58.7
Income tax expense (10.6)
----------------------------------- ------- ---------------- -------- -------
Profit for the period 48.1
----------------------------------- ------- ---------------- -------- -------
Year ended 30 June 2020 (audited)
Linden Partnerships
Profit for the period from Homes & Regeneration Central Total
discontinued operations GBPm GBPm GBPm GBPm
----------------------------------- --------- ----------------- ---------- --------
Revenue 303.1 348.8 - 651.9
Profit/(loss) from operations(1) 50.1 18.7 (27.9) 40.9
Share of joint ventures' interest
and tax (6.6) - - (6.6)
----------------------------------- --------- ----------------- ---------- --------
Profit/(loss) before finance
costs, amortisation and tax 43.5 18.7 (27.9) 34.3
Net finance (costs)/income (17.5) (0.7) 17.5 (0.7)
Amortisation costs - (1.0) - (1.0)
----------------------------------- --------- ----------------- ---------- --------
Profit/(loss) before taxation 26.0 17.0 (10.4) 32.6
Income tax expense (7.8)
----------------------------------- --------- ----------------- ---------- --------
Profit for the period 24.8
----------------------------------- --------- ----------------- ---------- --------
(1) Profit/(loss) from operations is stated before finance
costs, amortisation, exceptional items, share of joint ventures'
interest and tax and taxation.
In the prior year, the net gain on sale after tax in respect of
the disposal of the housebuilding operations was GBP328.2m, which
in addition to the profit for the period of GBP24.8m, resulted in a
total profit from discontinued operations of GBP353.0m.
9 Dividends
The following dividends were paid and recognised by the Company
in each accounting period presented:
Year to 30 June
2020
Half year to 31 Half year to 31
December 2020 December 2019 (audited)
-------------------- ------------------ ------------------
pence per pence per pence per
GBPm share GBPm share GBPm share
--------------------- ------- ----------- ------ ---------- ------ ----------
Previous year net
final - - 38.9 35.0 38.9 35.0
Current period
interim - - - - - -
Dividend recognised
in the year - - 38.9 35.0 38.9 35.0
--------------------- ------- ----------- ------ ---------- ------ ----------
The dividends paid in the prior period consists of the final
dividends of GBP38.9m relating to the year ended 30 June 2019.
The following dividends were declared by the Company in respect
of each accounting period presented:
Year to 30 June
2020
Half year to 31 Half year to 31
December 2020 December 2019 (audited)
------------------ ------------------ ------------------
pence per pence per pence per
GBPm share GBPm share GBPm share
------------------- ------ ---------- ------ ---------- ------ ----------
Interim 1.3 1.2 - - - -
Final - - - - - -
Dividend relating
to the year 1.3 1.2 - - - -
------------------- ------ ---------- ------ ---------- ------ ----------
The interim dividend for 2021 of 1.2p per share was approved by
the board on 4 March 2021 and has not been included as a liability
as at 31 December 2020. This interim dividend will be paid on 9
April 2021 to shareholders who are on the register at the close of
business on 12 March 2021.
10 Earnings per share
Basic and diluted earnings per share
Basic earnings per share 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 Employee Share Trust, which are treated as
cancelled.
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 effects 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 put below.
Half year to 31 December Half year to 31 December Year to 30 June 2020
2020 2019 (audited)
---------------------------------- ---------------------------------- ---------------------------------
Weighted Per Weighted Per Weighted Per
average share average share average share
Earnings number amount Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence GBPm of shares pence
Continuing
operations
Basic EPS
-
pre-exceptional
Pre-exceptional
earnings
attributable
to ordinary
shareholders 3.8 110,528,919 3.4 (4.6) 110,765,499 (4.1) (52.9) 110,798,602 (47.7)
Basic EPS
Earnings
attributable
to ordinary
shareholders
post
exceptional
items 3.8 110,528,919 3.4 12.4 110,765,499 11.2 (32.6) 110,798,602 (29.4)
Effect of
dilutive
securities:
Options n/a 2,801,321 n/a n/a - n/a n/a - n/a
Diluted EPS
-
pre-exceptional 3.8 113,330,240 3.4 (4.6) 110,765,499 (4.1) (52.9) 110,798,602 (47.7)
Diluted EPS 3.8 113,330,240 3.4 12.4 110,765,499 11.2 (32.6) 110,798,602 (29.4)
----------------- --------- ------------ --------- --------- ------------ --------- --------- ------------ --------
Half year to 31 December Half year to 31 December Year to 30 June 2020
2020 2019 (audited)
---------------------------------- ---------------------------------- ---------------------------------
Weighted Per Weighted Per Weighted Per
average share average share average share
Earnings number amount Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence GBPm of shares pence
Total operations
Basic EPS
-
pre-exceptional
Pre-exceptional
earnings
attributable
to ordinary
shareholders 1.7 110,528,919 1.5 43.5 110,765,499 39.3 300.1 110,798,602 270.9
Basic EPS
Earnings
attributable
to ordinary
shareholders
post
exceptional
items 1.7 110,528,919 1.5 60.5 110,765,499 54.6 320.4 110,798,602 289.2
Effect of
dilutive
securities:
Options n/a 2,801,321 n/a n/a - n/a n/a - n/a
Diluted EPS
-
pre-exceptional 1.7 113,330,240 1.5 43.5 110,765,499 39.3 300.1 110,798,602 270.9
Diluted EPS 1.7 113,330,240 1.5 60.5 110,765,499 54.6 320.4 110,798,602 289.2
----------------- --------- ------------ --------- --------- ------------ --------- --------- ------------ --------
The discontinued operations loss per share and diluted loss per
share for the period were 1.9p (31 December 2019: earnings per
share of 43.4p; 30 June 2020: earnings per share of 318.6p).
11 Goodwill
Goodwill is allocated to the Group's cash-generating units
(CGUs) identified according to business segment. The goodwill is
attributable to the following business segments:
30 June 2020
31 December 31 December
2020 2019 (audited)
GBPm GBPm GBPm
------------ ------------ -------------
Building 40.0 40.0 40.0
Infrastructure 37.2 37.2 37.2
77.2 77.2 77.2
---------------- ------------ ------------ -------------
As stated in the annual financial statements for the year ended
30 June 2020, detailed impairment reviews were carried out for all
business segments. Consideration has been given as to whether any
events have occurred since the year ended 30 June 2020 which could
give rise to an impairment. Careful consideration has been given to
all relevant factors, which includes the latest national lockdowns
in response to the ongoing pandemic, and the United Kingdom exiting
the European Union on 31 December 2020. No impairments have been
identified from these reviews.
12 PPP and other investments
30 June 2020
31 December 2020 31 December 2019 (audited)
GBPm GBPm GBPm
--------------------------- ---------------- ---------------- ------------
At 1 July 40.7 41.6 41.6
Additions - - 6.6
Disposals of housebuilding
divisions - (0.1) (0.5)
Disposals and subordinated
loan repayments (0.2) (0.7) (5.2)
Movement in fair value 3.6 (2.1) (1.8)
--------------------------- ---------------- ---------------- ------------
At 30 June 44.1 38.7 40.7
--------------------------- ---------------- ---------------- ------------
This portfolio has been valued using a discount rate of 8.0% (31
December 2019: 9.0%; 30 June 2020: 9.0%). The reduction in the
period reflects the rates typically experienced in the marketplace.
A further reduction of 1.0% would result in an increase in the fair
value of approximately GBP3.4m.
13 Trade and other receivables
30 June 2020
31 December 31 December
2020 2019 (audited)
GBPm GBPm GBPm
----------------------------------- ------------ ------------ -------------
Amounts falling due within
one year:
Trade receivables 53.7 49.9 49.4
Less: Provision for impairment
of receivables (0.3) (0.3) (1.6)
----------------------------------- ------------ ------------ -------------
Trade receivables - net 53.4 49.6 47.8
Contract assets 147.2 277.6 172.0
Amounts due from joint venture
undertakings 2.2 - 0.9
Prepayments and other receivables 28.1 30.8 26.8
----------------------------------- ------------ ------------ -------------
230.9 358.0 247.5
----------------------------------- ------------ ------------ -------------
As previously disclosed, the Group provided services in respect
of three contracts with entities owned by a major infrastructure
fund of a blue-chip listed company. Costs were significantly
impacted by client-driven scope changes and the Group has submitted
claims to the value of GBP95m in respect of these costs. Our work
on these contracts formally ceased on their termination in August
2018. The Group has taken extensive advice on our entitlement and
we have been successful in two adjudications supporting the
validity of the Group's position. The Group is currently proceeding
through arbitration in respect of the claims and variations in line
with the expected timeframe. Taking into account the requirements
of IFRS 15, in prior periods the Group had constrained the revenue
recognised (and therefore the associated contract receivable
carried) to the extent that it was highly probable not to result in
a significant reversal in the future. While the Group has submitted
a total claim value of GBP95m in respect of these costs within the
Statement of Case, revenue has been constrained. We have
constrained the revenue to a percentage recoverable that is lower
than that successfully recovered from the adjudications and
variations previously agreed on this contract. The underlying
principle supporting the validity and recovery of the claims and
variations is not considered to be impacted by the passage of time,
which is driven by the nature of dispute resolution in this sector.
It is possible that the process of the arbitration may not be
concluded within the coming financial year.
Whilst the entities are owned by a major infrastructure fund of
a blue-chip listed company, and we expect that the amounts will be
repaid, we have assessed any expected credit loss provision in
accordance with IFRS 9 to take into account their investment
structure. At 30 June 2020 and 31 December 2020, our assessment of
the credit worthiness of the underlying contracting entities
includes review of their latest audited financial statements to 31
December 2019, for which the audit opinion includes a disclaimer of
opinion in relation to material uncertainties in respect of claims
and the potential impact on going concern. The expected credit loss
provision for this contract (amongst our overall portfolio of
contracts) is discussed further in the table in note 2, within
critical accounting estimates and judgments.
There has been no change to our assessment of the constrained
revenue under IFRS 15 or the expected credit loss under IFRS 9 in
the period to 31 December 2020.
The Group continues to vigorously defend the counterclaims made
by the counterparty, that we consider are without merit, and as
such no amounts have been provided on the basis the Group considers
the possibility of an outflow of resources to be remote.
14 Cash and cash equivalents
31 December 31 December 30 June 2020
2020 2019 (audited)
GBPm GBPm GBPm
-------------------------------------- ------------ ------------ -------------
Cash and cash equivalents 211.1 273.2 197.2
Current borrowings - bank overdrafts - (279.7) -
Current borrowings - bank loans - (98.7) -
Non-current borrowings - bank
loans - (120.0) -
-------------------------------------- ------------ ------------ -------------
Net cash/(debt) 211.1 (225.2) 197.2
less: borrowings - 218.7 -
add: net debt - discontinued
operations - 99.9 -
-------------------------------------- ------------ ------------ -------------
Cash and cash equivalents per
the statements of cash flows 211.1 93.4 197.2
-------------------------------------- ------------ ------------ -------------
The Group's previous bank credit facilities were cancelled, and
ten-year unsecured notes were transferred to Vistry Group plc, on 3
January 2020 as part of the disposal of the housebuilding
divisions. The Group has no borrowing facilities with any bank.
15 Assets held for sale and liabilities associated with assets
held for sale
On 3 January 2020, the Group completed the disposal of the
Linden Homes and Partnerships & Regeneration divisions of
Galliford Try plc to Vistry Group plc. The negotiations regarding
the disposal took place during the interim period to 31 December
2019 and the conditional sale and purchase agreement was signed on
7 November 2019, with the associated conditions satisfied in early
January 2020. The assets and liabilities of the Linden Homes and
Partnerships & Regeneration divisions were classified as held
for sale from 2 December 2019 and as at 31 December 2019, with the
earlier date being the date from which both Galliford Try and
Vistry shareholders approved the transaction.
16 Trade and other payables
30 June 2020
31 December
31 December 2020 2019 (audited)
GBPm GBPm GBPm
----------------------------- ----------------- ------------ -------------
Trade payables 105.1 133.3 108.1
Contract liabilities 114.1 89.2 112.3
Other taxation and social
security payable 8.1 3.6 18.6
Accruals and other payables 244.6 356.4 219.8
471.9 582.5 458.
----------------------------- ----------------- ------------ -------------
17 Retirement benefit obligations
The amounts recognised in the balance sheet are as follows:
30 June 2020
31 December
31 December 2020 2019 (audited)
GBPm GBPm GBPm
---------------- --------------- ------------------- ------------ -------------
Fair value of plan assets - 0.9 1.0
Present value of defined
benefit obligations - - -
Surplus in scheme recognised
as non-current asset - 0.9 1.0
---------------------------------- ------------------ ------------ -------------
The Group's final defined benefit pension scheme, the Galliford
Group Special Scheme, was wound-up during the period and the
surplus cash of GBP1.0m returned to the Company. The Group has no
remaining defined benefit pension schemes or liabilities.
An actuarial gain of GBPnil (31 December 2019: GBP2.0m; 30 June
2020: GBP2.0m) in respect of discontinued operations has been taken
to the condensed consolidated statement of comprehensive
income.
18 Financial instruments
The Group's activities expose it to a variety of financial
risks. The condensed consolidated half year financial statements do
not include all financial risk management information and
disclosures required in the annual financial statements; they
should be read in conjunction with the Group's financial statements
for the year ended 30 June 2020.
There have been no significant changes in the risk management
policies since the year end.
Fair value estimation
Specific valuation techniques used to value financial
instruments are defined as:
i. Level 1 - Quoted market prices or dealer quotes in active markets for similar instruments.
ii. Level 2 - The fair value of equity securities and interest
rate swaps is calculated as the present value of the estimated
future cash flows based on observable yield curves.
iii. Level 3 - Other techniques, such as discounted cash flow
analysis, are used to determine fair value for the remaining
financial instruments.
The following table presents the Group's assets that are
measured at fair value:
31 December 2020 31 December 2019 30 June 2020 (audited)
------------------------ ---------------------- ------------------------
Level Level Level Level Total Level Level
2 3 Total 2 3 GBPm 2 3 Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Assets
Other investments
* PPP and other investments - 44.1 44.1 - 38.7 38.7 - 40.7 40.7
Total - 44.1 44.1 - 38.7 38.7 - 40.7 40.7
-------------------------------------- -------- ------ ------ ------ ------ ------ ------ ------- -------
There were no transfers between levels during the period. The
valuation techniques used to derive Level 2 and 3 fair values are
consistent with those set out in the 30 June 2020 financial
statements. Level 3 fair values are determined using valuation
techniques that include inputs not based on observable market data.
For all other financial instruments, the fair value is materially
in line with the carrying value.
The key assumptions used in Level 3 valuations include the
expected timing of receipts, credit risk and discount rates. The
typical repayment period is 10-15 years and the timing of receipts
is based on historical data. The discount rate of 8.0% (31 December
2019: 9.0%; 30 June 2020 9.0%) used to compute the fair value is
based on current market conditions. The sensitivity to discount
rates is set out in note 12. If receipts were to occur earlier than
expected, the fair value could increase.
19 Guarantees and contingent liabilities
Galliford Try Holdings 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, amounting to GBP141.0m
(31 December 2019: GBP165.3m; 30 June 2020 GBP157.4m).
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.
20 Related party transactions
Since the last Group annual financial statements for the year
ended 30 June 2020, there have been no significant changes to the
nature of related party transactions.
21 Alternative performance measures
Throughout the Interim statement, the Group has presented
financial performance measures which are used to manage the Group's
performance. These financial performance measures are chosen to
provide a balanced view of the Group's operations and are
considered useful to investors as they provide relevant information
on the Group's performance. They are also aligned to measures used
internally to assess business performance in the Group's budgeting
process and when determining compensation. An explanation of the
Group's financial performance measures and appropriate
reconciliations to its statutory measures are provided below.
Measuring the Group's performance
The following measures are referred to in this report:
Statutory measures
Statutory measures are derived from the Group's reported
financial statements, which are prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the EU and as issued by the International Accounting Standards
Board (IASB) and in line with the Group's accounting policies. The
Group's statutory measures take into account all of the factors,
including exceptional items which do not reflect the ongoing
underlying performance of the Group.
Alternative performance measures
In assessing its performance, the Group has adopted certain
non-statutory measures that more appropriately reflect the
underlying performance of the Group. These typically cannot be
directly extracted from its financial statements but are reconciled
to statutory measures below:
a) Pre-exceptional performance
The Group adjusts for certain material one-off (exceptional)
items which the Board believes assist in understanding the
performance achieved by the Group as this better reflects the
underlying and ongoing performance of the business.
b) Operating profit before amortisation and operating margin
The Group uses an operating profit measure excluding
amortisation and exceptional items.
Operating margin reflects the ratio of pre-exceptional operating
profit before amortisation and pre-exceptional revenue. This
differs from the statutory measure of profit before finance costs
which includes the share of joint ventures' interest and tax and
amortisation of intangible assets.
A reconciliation of the statutory measure to the Group's
performance measure is shown below, based on continuing
operations:
Building Infrastructure PPP Investments Central Total
GBPm GBPm GBPm GBPm GBPm
-------- --------------
Half year ended 31 December 2020
Statutory operating (loss)/profit 5.5 2.4 (0.7) (4.3) 2.9
add: amortisation of intangible
assets 0.5 - - 0.5 1.0
Operating profit/(loss) before
amortisation 6.0 2.4 (0.7) (3.8) 3.9
---------------------------------------- -------- -------------- --------------- ------- -------
Revenue 374.5 164.1 3.1 - 541.7
---------------------------------------- -------- -------------- --------------- ------- -------
Operating margin 1.6% 1.5% n/a n/a 0.7%
---------------------------------------- -------- -------------- --------------- ------- -------
Half year ended 31 December 2019
Statutory operating (loss)/profit 1.9 26.6 (0.9) (13.1) 14.5
add: amortisation of intangible
assets 0.5 - - 0.5 1.0
exclude: exceptional items (note
5) - (28.0) - 5.8 (22.2)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional operating profit/(loss)
before amortisation 2.4 (1.4) (0.9) (6.8) (6.7)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional revenue 423.5 208.7 3.8 0.2 636.2
---------------------------------------- -------- -------------- --------------- ------- -------
Operating margin - continuing
operations 0.6% (0.7)% n/a n/a (1.0)%
---------------------------------------- -------- -------------- --------------- ------- -------
Year ended 30 June 2020 (audited)
Statutory operating (loss)/profit (54.9) 25.5 (0.5) (9.5) (39.4)
add: amortisation of intangible
assets 1.0 - - 1.1 2.1
exclude: exceptional items (note
5) 2.0 (27.3) - 0.2 (25.1)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional operating profit/(loss)
before amortisation (51.9) (1.8) (0.5) (8.2) (62.4)
---------------------------------------- -------- -------------- --------------- ------- -------
Pre-exceptional revenue 719.9 357.1 8.2 4.4 1,089.6
---------------------------------------- -------- -------------- --------------- ------- -------
Operating margin (7.2)% (0.5)% n/a n/a (5.7)%
---------------------------------------- -------- -------------- --------------- ------- -------
c) Pre-exceptional profit before tax
The Group uses a profit before tax measure which excludes
exceptional items as noted above, whereas the statutory measure
includes exceptional items.
A reconciliation of the statutory measure to the Group's
performance measure is shown below, based on continuing
operations:
Half year to Half year to
31 December 31 December Year to 30 June
2020 2019 2020 (audited)
GBPm GBPm GBPm
-------------------------------- ------------ ------------ -----------------
Statutory profit/(loss) before
tax 4.1 16.6 (34.6)
add: exceptional items (note 5) - (22.2) (25.1)
-------------------------------- ------------ ------------ -----------------
Pre-exceptional profit/(loss)
before tax 4.1 (5.6) (59.7)
-------------------------------- ------------ ------------ -----------------
d) Pre-exceptional earnings per share
In line with the Group's measurement of pre-exceptional
performance, the Group also presents its earnings per share on a
pre-exceptional basis. This differs from the statutory measure of
earnings per share which includes exceptional items.
A reconciliation of the statutory measure to the Group's
performance measure is shown below, based on continuing
operations:
Half year to 31 December
2020
---------------------- ---- -----------------------------
Earnings Ave number EPS
GBPm of shares pence
---------------------- -------- ----------- ------
Statutory results 3.8 110,528,919 3.4
Exclude: e xceptional
earnings (note 5) - n/a -
---------------------- -------- ----------- ------
Earnings per share 3.8 110,528,919 3.4
---------------------------- -------- ----------- ------
Half year to 31 December
2019
---------------------- ---- -----------------------------
Earnings Ave number EPS
GBPm of shares pence
---------------------- -------- ----------- ------
Statutory results 12.4 110,765,499 11.2
Exclude: e xceptional
earnings (note 5) (17.0) n/a n/a
---------------------- -------- ----------- ------
Pre-exceptional loss
per share (4.6) 110,765,499 (4.1)
---------------------------- -------- ----------- ------
Year ended 30 June 2020
(audited)
---------------------- ---- -----------------------------
Earnings Ave number EPS
GBPm of shares pence
---------------------- -------- ----------- ------
Statutory results (32.6) 110,798,602 (29.4)
Exclude: e xceptional
earnings (note 5) (20.3) n/a n/a
---------------------- -------- ----------- ------
Pre-exceptional loss
per share (52.9) 110,798,602 (47.7)
---------------------------- -------- ----------- ------
Principal risks and uncertainties
The directors consider that the principal risks and
uncertainties which may have a material impact on the Group's
performance in the second half of the financial year remain
primarily the same as those outlined on pages 29 to 34 of the
Group's annual report and financial statements for the year ended
30 June 2020. Those risks the Group considers to be of particular
importance and highlighted as the principal risks in focus within
the 30 June 2020 annual report are; opportunity pipeline, margin
erosion, supply chain and joint arrangement partners, and cash
management. The impact of Covid-19 has also been re-assessed during
the period and up to the date of approval of this interim report,
and note no significant impact to those risks disclosed in the
Group's annual report for the year ended 30 June 2020. Further
details are included in our assessment of the going concern
assumption within note 1. Details of these risks along with any
updates will be included in the Group's 2021 Annual Report and
Accounts.
Forward looking statements
Certain statements in this half year report are forward looking.
Such statements should be treated with caution as they are based on
current information and expectations and are subject to a number of
risks and uncertainties that could cause actual events of outcomes
to differ materially from expectations.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union. UK
International Accounting Standards become effective for accounting
periods beginning on or after 1 January 2021 following the
completion of the United Kingdom's transition for departing from
the European Union on 31 December 2020.
The directors confirm that these condensed consolidated half
year financial statements have been prepared in accordance with IAS
34 as adopted by the European Union; and that the interim
management report herein gives a true and fair view of the assets,
liabilities, financial position and profit of the Group as required
by DTR 4.2.4 and includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8 namely:
-- an indication of important events that have occurred during
the six months and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
The directors of Galliford Try Holdings plc are:
Peter Ventress Non-executive Chairman
Bill Hocking Chief Executive
Andrew Duxbury Finance Director
Terry Miller Senior Independent Director
Gavin Slark Non-executive Director
Marisa Cassoni Non-executive Director
Signed on behalf of the Board.
Bill Hocking
Chief Executive
Andrew Duxbury
Finance Director
4 March 2021
Independent review report to Galliford Try Holdings plc
Report on the condensed consolidated interim financial
statements
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 December 2020 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated statement of changes in equity and the
condensed consolidated statement of cash flows.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International
Accounting Standard 34, "Interim Financial Reporting", as adopted
by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2020 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, as adopted by
the European Union, and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
55 Baker Street
London
W1U 7EU
UK
4 March 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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