TIDMGFRD
RNS Number : 9232L
Galliford Try Holdings PLC
16 September 2021
07:00 AM THURSDAY 16 SEPTEMBER 2021
GALLIFORD TRY HOLDINGS PLC
ANNUAL RESULTS STATEMENT FOR THE YEARED 30 JUNE 2021
Strong Financial Performance and Sustainable Growth Strategy
* Strong operational performance delivering improved
profitability.
* Profit before tax above previous guidance at GBP11.4m
(2020: pre-exceptional loss GBP59.7m).
* Divisional operating margin ahead of expectations at
2.0%, showing strong progress towards our margin
improvement target.
* Final dividend payment of 3.5p , together with an
interim dividend of 1.2p giving a total dividend of
4.7p covered by 2.0x earnings from continuing
operations. Policy to increase dividend in line with
earnings, with dividend cover expected to be in the
range of 2.0 - 2.5 times earnings going forward.
* Cash generative with well-capitalised debt-free
balance sheet, average month end cash for the period
of GBP164m (2020: GBP141m(1) ), PPP asset portfolio
of GBP49m (2020: GBP41m) and no pension liabilities.
* Positive outlook with high quality GBP3.3bn order
book (2020: GBP3.2bn) positioned across our chosen
sectors .
* Well placed to deliver our updated Sustainable Growth
Strategy , through our market leading sector
positions, commitment to achieving net zero carbon(2)
and refreshed sustainability and financial targets.
2021(3,4) 2020(3) 2020(3)
Pre-exceptional Post-exceptional
Revenue GBP1,125m GBP1,090m GBP1,122m
Operating profit/(loss) before GBP10.1m GBP(37.1)m
amortisation GBP(62.2)m
Profit/(loss) before tax GBP11.4m GBP(59.7)m GBP(34.6)m
Earnings/(loss) per share 9.5p (47.7)p (29.4)p
Full year dividend per share 4.7p nil nil
Net cash GBP216.2m GBP197.2m GBP197.2m
Order book GBP3.3bn GBP3.2bn GBP3.2bn
New Financial targets to 2026:
We publish our updated strategy today, including refreshed
financial targets to 2026. Maintaining our strong focus on risk
management we plan to deliver long term value for all our
stakeholders.
Divisional operating 3.0% across Building and Infrastructure, with a
margin: focus on bottom line growth
growing towards GBP1.6bn, through disciplined contract
Revenue selection and sustainable profitable growth
Cash: strong balance sheet and operating cash generation
sustainable dividends, in the range 2.0 to 2.5 times
Dividends: earnings
Bill Hocking, Chief Executive, commented:
"I am very proud of the progress the Group has made over the
last year. We have dealt with challenging circumstances and
continue to successfully manage the current market conditions.
Our commitment to robust risk management, careful contract
selection and operational excellence underpins our performance and
prospects. The Group has an excellent order book and balance sheet.
We are strongly positioned to meet the increasing demand for social
and economic infrastructure in the UK and deliver growth.
Our secure foundation provides the basis for our Sustainable
Growth Strategy, which aligns our financial objectives with our
sustainability aspirations to deliver sustainable profitable
growth.
The outlook is positive for the sector and the management team
and Board look forward to the new financial year with
confidence."
(1) Average for the six months to 30 June 2020 following the
disposal of the housebuilding business.
(2) Galliford Try has committed to achieving net zero carbon
across its own operations (Scope 1 and 2 and operational Scope 3)
by 2030 and has already reduced emissions by 62% since 2012. The
Group is additionally targeting net zero carbon emissions across
all activities by 2045 at the latest.
(3) All financial information presented relates to continuing
operations, unless otherwise stated.
(4) There were no exceptional items in 2021.
Enquiries:
Bill Hocking, Chief Executive
Andrew Duxbury, Finance
Galliford Try Director 01895 855001
James Macey White
Tulchan Communications Victoria Boxall 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.
Presentation(s)
A conference call for Analysts and Investors will be held at
09:30am BST today, Thursday 16 September 2021. To register for this
event please follow this link:
https://webcasting.brrmedia.co.uk/broadcast/6112a8f78f5b0057e0313e00
Should you wish to ask a question, please dial-in on +44 (0)330
336 9125 using confirmation code 1846204, 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 20 September at 4:00pm BST via the Investor Meet
Company platform. Investors can register for the event via this
link:
https://www.investormeetcompany.com/galliford-try-holdings-plc/register-investor
STRATEGY
Fundamental to the business' long-term success is our belief
that we create value over the long term by operating in a
sustainable and responsible way. We believe strongly that the
interests of all stakeholders - our people, suppliers, clients,
communities and shareholders - are fully aligned and will all
benefit from our focus on operating sustainably.
Our purpose is to improve people's lives by building the
facilities and infrastructure that communities need, providing
opportunities for our people to learn, grow and progress, working
with our supply chain to promote the very best working practices
and caring for the environment.
We aim to deliver high-quality buildings and infrastructure in a
socially responsible way and provide sustainable returns for our
shareholders.
Our strategic priorities are:
* Progressive culture, prioritising health, safety and
wellbeing and creating an inclusive workplace;
* Socially Responsible Delivery, adopting sustainable
resourcing and consumption practices and making a
positive impact in communities;
* Quality and Innovation, delivering superior buildings
and infrastructure for our clients and aligning with
our supply chain; and
* Sustainable Financial Returns, for our shareholders.
Our Sustainable Growth Strategy balances financial targets with
wider commitments and aspirations. Alongside our financial targets
we have updated our ambitions across each of our six sustainability
pillars. In respect of climate change, we are c ommitted to
achieving net zero carbon across the Group's own operations by 2030
and across all activities by 2045, supported by Science Based
Targets and our involvement with the Construction Leadership
Council's C02nstructZero.
The Group will deliver sustainable and profitable revenue growth
through our continued focus on the public and regulated sectors,
and work with high-quality private sector clients, delivering for
our clients through our regional building businesses and national
highways and environment businesses. We will continue to develop
our capability and expertise in our core sectors and adjacent
markets, supported by our investment in our people, digital
capabilities and operations.
* Building operates across the UK and has proven
expertise in markets with significant future
opportunities, particularly education, defence,
health, and the commercial sectors.
* Highways works with both National Highways (formerly
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.
Risk management and order book
The Group's strategy is founded on strong risk management and
commercial discipline, and we remain selective about the contracts
that we take on. This approach is reflected in the quality of our
contracts in our order book.
At 30 June 2021 the Group had a high-quality order book of
GBP3.3bn (2020: GBP3.2bn) of which 91% is in the public and
regulated sectors and 9% is in the private sector (2020: 81% and
19% respectively).
During the year our Building and Infrastructure divisions were
successful in winning new work including:
* the GBP400m NEPO Civil Works framework;
* Scottish Water's GBP350m SR21 Non-Infrastructure
framework;
* Scottish Water's GBP350m Delivery Vehicle 2
programme; and
* Leicestershire County Council's GBP48m Grantham
Southern Relief Road.
In total, Building and Infrastructure were appointed to
contracts and frameworks worth over GBP641m and GBP590m
respectively. Frameworks provide certainty of pipeline of work with
repeat clients and established terms and conditions, and amount to
87% of our order book (2020: 90%) affording good visibility of
future revenues.
The Group started the new financial year with 90% of planned
revenue secured for the 2022 financial year (2020: 90%).
Financial targets
The Group's strategy and sector focus means that we are well
placed to support the Government's commitment to investment in
infrastructure and the built environment, which will provide
further opportunities for us to contribute to the UK's economic
recovery from the pandemic and its decarbonisation commitments.
The Group's Sustainable Growth Strategy is supported by current
market conditions and will continue to benefit from our continuing
focus on risk management. Our financial targets to 2026 are:
Divisional operating 3.0% across Building and Infrastructure, with a
margin: focus on bottom line growth
growing towards GBP1.6bn, through disciplined contract
Revenue: selection and sustainable profitable growth
Cash: strong balance sheet and operating cash generation
sustainable dividends, in the range 2.0 to 2.5 times
Dividends: earnings
Dividends and capital allocation
The Board understands the importance of dividends to
shareholders, and in reviewing its dividend takes into account the
Group's return to profitability, its strong balance sheet, high
quality order book and encouraging longer term prospects.
The Board is committed to maintaining a strong balance sheet,
which provides the Group with competitive advantage in its market
and supports our growth strategy. Our capital allocation priorities
are to support the Group's ongoing operational requirements and
invest in strategic opportunities that enhance our capabilities and
returns; maintain sufficient cash reserves to mitigate the effects
of any future market downturn; and to pay sustainable dividends to
shareholders. We continually review the cash requirements of the
business and as the Group progresses delivery of its strategy the
Board will continue to assess capital allocation and shareholder
returns.
Consistent with this approach, and as set out in March 2021, 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.
Having reviewed the Group's results and the outlook, the
Directors are recommending a final dividend of 3.5 pence per share
which, subject to approval will be paid on 10 December 2021 to
shareholders on the register at 12 November 2021. Together with the
interim dividend of 1.2 pence per share paid in April, this will
result in a total dividend for 2021 of 4.7 pence per share.
Sustainability commitments
Fundamental to the Group's Sustainable Growth Strategy is our
belief that, for long-term value creation, we must balance our
financial performance with delivering the priorities of all our
stakeholders. B eing sustainable makes us more efficient, helps us
to win work, engages our employees and benefits communities and the
environment.
The six fundamental pillars of our sustainability strategy,
which are mapped to the UN Sustainable Development Goals, are set
out below. We have reviewed the sustainability priorities of our
principal stakeholder groups and renewed our key commitments across
these six pillars.
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.
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.
During the year, we took the opportunity to refresh our
award-winning behavioural safety programme 'Challenging Beliefs,
Affecting Behaviour' to ensure all our teams and subcontractors
remain engaged in our belief that nothing we do is so important we
cannot take the time to do it safely, consistent with our ambition
for no harm.
We set ourselves high standards so were disappointed that our
Accident Frequency Rate (AFR) increased slightly to 0.08 from 0.07.
We continue to place emphasis on the proactive management measures
that will return us to a lower AFR and lead to further
improvements. We received eight awards from RoSPA (The Royal
Society for the Prevention of Accidents), including four Order of
Distinction awards for receiving 15-24 consecutive Gold awards.
Recognising the challenges of working on site, in the office or
at home during Covid-19, we have increased our focus on wellbeing.
As part of 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 site staff survey told us
that 83% of those who responded felt supported.
Our people
Success comes from our people and our progressive culture. We
seek to attract and retain talented individuals who are aligned to
our purpose and uphold our values, creating an inclusive
environment where they can truly be themselves and thrive.
Promoting inclusivity facilitates the diversity of thought,
innovative approaches and experiences that create stronger, better
balanced teams which enhance our offering for our stakeholders.
Early careers are the focus of many of our recruitment
activities, as they allow us to grow our own talent. Our Graduate
Programme and apprenticeships and traineeships remain popular, with
7.2% of our workforce in early careers positions.
We are continuing to address the historic under-representation
of women in the construction industry and in the financial year,
have seen another slight increase in female representation across
our business, to 23.0%. In our Gender Pay Report in April this
year, we reported that our mean gender pay gap has reduced to an
all-time low of 28.8%.
Our Employee Forum, chaired by the Group's Senior Independent
Director, provides direct engagement with individuals from across
the Group and enables us to better understand how we can be an
employer of choice.
Environment and climate change
Tackling climate change is the number one sustainability
priority for our clients, investors, and regulators.
We have pledged to achieve net zero carbon across our own
operations by 2030, widening that scope to include all activities
by 2045 at the latest. To provide a clear route to reduce
greenhouse gas emissions, we have also committed to setting and
achieving a science-based target verified by the Science Based
Targets initiative (SBTi). In doing so, we have joined the Business
Ambition for 1.5degC to limit global warming to 1.5 degrees and the
UN-backed campaign Race to Zero.
We are already well advanced on our carbon reduction journey
across our own operations. We manage and mitigate our environmental
impacts through our ISO 14001 certified management system and have
reduced carbon dioxide equivalent emissions (Scope 1, 2 and
operational Scope 3) by 59% from 2015 to 2020.
We also help our clients to achieve their own carbon reduction
objectives by using modern methods of construction and
incorporating sustainable environmental considerations into our
design standards and construction practices.
Clients
Delivering excellence for our clients is key to the long-term
sustainability of our business. We look to achieve exceptional
standards of service and satisfaction through continual monitoring,
assessment and refinement of our delivery processes.
Our focus on delivering quality outcomes and building trusted
relationships with our clients is reflected in the fact that 92% of
work in our order book is repeat business, underpinned by our
accreditation to the ISO 44001 Collaborative Business Relationships
Standard.
Our clients expect us to design and construct assets to a high
quality. 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.
Communities
Delivering a legacy of positive social value outcomes in the
communities in which we operate is a key part of our strategy. This
is the right thing to do as a responsible business and it is also
an increasingly important priority for our clients. During the
year, we launched an updated Social Value Calculator to monitor the
positive outcomes that we are delivering to the wider community,
including the impact on the local economy through job creation and
spend with the local supply chain, apprenticeships, work
experience, training, and volunteering.
The Group achieved an average Considerate Constructors Scheme
score of 40.6 (2020: 41.1), which continues to exceed the industry
average of 38.0 (2020: 37.1). We donated over GBP250,000 in time,
materials, and money to charitable causes (2020: GBP195,000) and we
were pleased to mark 22 years of supporting CRASH, which assists
homelessness and hospice charities with construction-related
projects.
Supply chain
Our approach to our supply chain establishes and maintains
long-term trading relationships with key suppliers and
manufacturers. We have again improved our performance in respect of
the Government's Prompt Payment Code, meeting our target of paying
95% of invoices within 60 days in the most recent six month period.
Our Advantage through Alignment programme provides selected
suppliers with greater insight into our operations and pipeline,
and provides access to our training programmes. We remain a Gold
member and Partner of the Supply Chain Sustainability School. In
the year, 59% of our business units' core trade spend was with our
Aligned subcontractors.
We continue to retain Gold status from the Supply Chain
Sustainability School, an award-winning collaboration designed to
upskill its members through free training and resources covering
sustainability, off-site manufacturing and BIM.
CURRENT TRADING AND OUTLOOK
The Group has made good operational progress in the year to 30
June 2021 resulting in our return to profitability and resumption
of dividends. We continue to trade well and in line with the
Board's expectations as we enter the new financial year and
anticipate continuing to improve margins in line with our targets.
Our disciplined approach to bidding and active engagement with our
supply chain have proved particularly important during the recent
period of materials shortages and inflation. Through our careful
project management we have successfully managed and mitigated these
challenges without any material impact on trading or margin.
We are encouraged by the pipeline of new opportunities across
our chosen sectors in the public, regulated and private markets
together with our significant contract wins during the period. The
Government's plans to increase capital expenditure, together with
the Group's strong balance sheet and quality order book, mean that
the Group is well placed to meet its growth objectives for the new
financial year.
Our objectives are to operate sustainably, deliver controlled
growth, cash generation and improved margins. The Group is
confident in the future as we look to increase operating margins
and enhance shareholder value whilst maintaining our disciplined
approach on risk management and careful contract selection.
FINANCIAL REVIEW
The Group delivered a return to profitability, in line with our
plan, and resumption of dividends. Our improving operating
performance, strong financial position and quality order book
provide confidence in our future performance.
The Group's revenue for the year was up 3% to GBP1,124.8m (2020:
pre-exceptional GBP1,089.6m). The increase reflects the resumption
of site operations following the impact of the Covid-19 lockdown in
Spring 2020, partly offset by an expected reduction in
Infrastructure's revenue as we transitioned into the new AMP7
programme.
The Group's operating profit before amortisation was GBP10.1m
(2020: pre-exceptional loss of GBP62.2m). Building generated profit
of GBP15.9m (2020: pre-exceptional loss of GBP51.9m), representing
a margin of 2.0% (2020: (7.2)%), and Infrastructure generated
profit of GBP6.0m (2020: pre-exceptional loss of GBP1.8m),
representing a margin of 1.8% (2020: (0.5)%). The combined
divisional operating margin was 2.0% (2020: pre-exceptional
(5.0)%).
There was an GBP11.8m net loss in PPP Investments and Central
Costs (2020: GBP8.5m). During the financial year, we did not take
advantage of any Government Covid-19 support, and furlough monies
received since July 2020 have been fully repaid.
The profit before tax for the year was GBP11.4m (2020:
pre-exceptional loss of GBP59.7m). There were no exceptional items
in 2021. Exceptional income in 2020 of GBP25.1m included GBP28.0m
income in respect of the settlement of legacy contracts and GBP2.9m
costs associated with restructuring. Further details of exceptional
items are set out in note 5 to the financial statements.
The table below reconciles profit before income tax to our
alternative performance measure of pre-exceptional profit before
income tax, which is a key metric for us when monitoring
performance of the business.
2021 2020
GBPm GBPm
------------------------------------------------ ----- ------
Profit/(loss) before income tax 11.4 (59.7)
Exceptional profit - 25.1
Pre-exceptional profit/(loss) before income tax 11.4 (34.6)
------------------------------------------------ ----- ------
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 GBP95m in
respect of these costs (2020: GBP95m). The Group has taken
extensive legal 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 30 June 2021 the Group has
updated its assessed recoverability in accordance with IFRS 15,
which was unchanged, and its expected credit loss provision in
accordance with IFRS 9 for which there was no change in the
required provision, albeit the range of possible outcomes within
our probability weighted matrix has changed.
The Group has no debt or defined benefit pension obligations,
and at 30 June 2021 had a cash balance of GBP216.2m (2020:
GBP197.2m). The average month-end cash balance in the year was
GBP164m (2020: GBP141m for the six months to 30 June 2020 following
the disposal of the housebuilding business), which is ahead of the
expectations we set at the start of the year. Our operating cash
generation in the year, of GBP64m, reflects very strong cash
collection performance.
We are committed to pursuing a collaborative and open approach
with all our supply chain. Our performance under the Prompt Payment
Code continued to improve again, with 93% of invoices paid within
60 days in the financial year (2020: 88%), and 95% in the most
recent six month period.
At 30 June 2021, we had a PPP portfolio of GBP49.1m (2020:
GBP40.7m), reflecting a blended 7% discount rate (2020: 9%). This
portfolio contributes to our balance sheet strength and generated
interest income of GBP3.9m in the period.
OPERATIONAL REVIEW
BUILDING
Building operates through nine regional businesses, serving a
range of public and private sector clients across the UK, with a
focus on the Education, Defence and Health sectors, where we have
core and proven strengths. Building retains a substantial presence
in Scotland, operating as Morrison Construction.
2021 2020*
--------------------------------------------------- ----- ------
Revenue (GBPm) 789.2 719.9
--------------------------------------------------- ----- ------
Operating profit/(loss) before amortisation (GBPm) 15.9 (51.9)
--------------------------------------------------- ----- ------
Operating profit margin (%) 2.0 (7.2)
--------------------------------------------------- ----- ------
Order book (GBPm) 1,920 2,152
--------------------------------------------------- ----- ------
*Pre-exceptional
Building generated revenue of GBP789.2m (2020: GBP719.9m),
generating an operating profit before amortisation of GBP15.9m
(2020: pre-exceptional loss of GBP51.9m), which represents a margin
of 2.0% (2020: (7.2)%). The increase in profit reflects the
encouraging performance of projects that were added to the order
book in recent periods and reduced impact of Covid-19. Our FM
business complements operations by providing building maintenance
services and we continue to grow the capabilities of this
operation.
Building won contracts and positions on frameworks worth over
GBP641m, (2020: GBP1,021m). Significant appointments and wins
included:
the GBP10.5bn NHS Shared Business Services framework;
the GBP2.1bn Construction West Midlands framework;
a GBP105m contract for the commercial and PRS development at
Monk Bridge for Highline Investments;
the GBP60m Winchburgh Schools project contract in West Lothian
for West Lothian Council; and
the GBP50m refurbishment contract for the 280 Bishopsgate
project in London for Arax Properties.
Building currently has an order book of GBP1.92bn (2020:
GBP2.15bn), with 27% in Education, 20% in Defence and Custodial,
16% in Health, and 21% in Facilities Management.
INFRASTRUCTURE
Infrastructure carries out civil engineering projects across the
UK, focused on Highways and Environment (incorporating our
activities in water, wastewater and flood alleviation).
2021 2020*
--------------------------------------------------- ----- -----
Revenue (GBPm) 329.2 357.1
--------------------------------------------------- ----- -----
Operating profit/(loss) before amortisation (GBPm) 6.0 (1.8)
--------------------------------------------------- ----- -----
Operating profit margin (%) 1.8 (0.5)
--------------------------------------------------- ----- -----
Order book (GBPm) 1,348 1,010
--------------------------------------------------- ----- -----
*Pre-exceptional
Infrastructure's revenue was GBP329.2m (2020: pre-exceptional
revenue of GBP357.1m), the reduction reflecting the expected impact
of the transition into the new AMP7 water programme. The operating
profit before amortisation was GBP6.0m (2020: pre-exceptional loss
of GBP1.8m), resulting in a margin of 1.8% (2020: (0.5)%). The
improved profit performance includes the reduced impact of
Covid-19.
Infrastructure won contracts and positions on frameworks worth
GBP590m, (2020 GBP377m). These included:
-- Scottish Water's new Non-Infrastructure Framework for the
SR21-27 investment programme, valued at GBP700m over a six-year
timeframe;
-- Six lots out of 13 across the GBP400m North East Procurement
Organisation's (NEPO) Civil Works framework;
-- 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 currently has an order book of GBP1.35bn (2020:
GBP1.01bn), comprising 38% in Highways and 62% in Environment.
PPP INVESTMENTS
PPP Investments delivers major building and infrastructure
projects through public-private partnerships, generating work for
the wider Group in the process. Our Facilities Management provides
FM services predominantly to projects which Galliford Try have
constructed and invested in.
2021 2020
---------------------------- ----- -----
Revenue (GBPm) 6.4 8.2
---------------------------- ----- -----
Loss from operations (GBPm) (1.8) (0.3)
---------------------------- ----- -----
Net interest income 3.9 2.9
---------------------------- ----- -----
Directors' valuation (GBPm) 49.1 40.7
---------------------------- ----- -----
With the reduction in traditional PPP/PFI bidding opportunities,
PPP Investments has continued to move its focus towards
co-development projects and at the year end it was preferred bidder
on two PRS (Private Rented Sector) schemes with a gross development
value of GBP120m.
At the year end, the directors' valuation of our PPP portfolio
was GBP49.1m (2020: GBP40.7m), which is the fair value included in
the balance sheet reflecting a blended discount rate of 7% (2020:
9%). The valuation compared with a value invested of GBP36.2m
(2020: GBP34.9m). These assets generated interest income of GBP3.9m
(2020: GBP5.4m) and contribute to our balance sheet strength.
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 Jeremy's departure, Marisa Cassoni,
Non-executive Director, and then Chair of the Remuneration
Committee, assumed the role of Chair of the Audit Committee. Marisa
is a chartered accountant with more than 40 years' experience as a
finance professional. On the same date Terry Miller, Senior
Independent Director, was appointed Chair of the Remuneration
Committee. Terry was previously interim Chair of the Remuneration
Committee between November 2017 and February 2019.
Consolidated income statement
for the year ended 30 June 2021
2021 2020
--------------------------------------------------------- ----- --------- ---------------------------- ---------
Exceptional
items
Pre-Exceptional (note
Total items 5) Total
Notes GBPm GBPm GBPm GBPm
--------------------------------------------------------- ----- --------- --------------- ----------- ---------
Revenue 4 1,124.8 1,089.6 32.0 1,121.6
Cost of sales (1,049.7) (1,085.9) (6.3) (1,092.2)
--------------------------------------------------------- ----- --------- --------------- ----------- ---------
Gross profit 75.1 3.7 25.7 29.4
Administrative expenses (67.1) (68.0) (0.6) (68.6)
Operating profit/(loss) 8.0 (64.3) 25.1 (39.2)
Share of post tax profits/(losses)
from joint ventures 0.5 (0.2) - (0.2)
Finance income 6 4.1 5.8 - 5.8
Finance costs 6 (1.2) (1.0) - (1.0)
Profit/(loss) before income tax 11.4 (59.7) 25.1 (34.6)
Income tax (expense)/credit 7 (1.0) 6.8 (4.8) 2.0
--------------------------------------------------------- ----- --------- --------------- ----------- ---------
Profit/(loss) from continuing operations
for the year 10.4 (52.9) 20.3 (32.6)
(Loss)/profit from discontinued operations,
net of income tax for the year 20 (2.7) 353.0 - 353.0
--------------------------------------------------------- ----- --------- --------------- ----------- ---------
Profit for the year 7.7 300.1 20.3 320.4
--------------------------------------------------------- ----- --------- --------------- ----------- ---------
Earnings/(loss) per share
Basic
* Profit from continuing operations attributable to
ordinary shareholders 9 9.5p (47.7)p (29.4)p
* Profit attributable to ordinary shareholders 9 7.0p 270.9p 289.2p
Diluted
* Profit from continuing operations attributable to
ordinary shareholders 9 9.1p (47.7)p (29.4)p
* Profit attributable to ordinary shareholders 9 6.8p 270.9p 289.2p
--------------------------------------------------------- ----- --------- --------------- ----------- ---------
There were no exceptional items in the year.
Consolidated statement of comprehensive income
for the year ended 30 June 2021
2021 2020
Notes GBPm GBPm
------------------------------------------------------------ ----- ----- -----
Profit for the year 7.7 320.4
Other comprehensive income:
Items that will not be reclassified to profit or
loss
Remeasurement of retirement benefit obligations
- discontinued operations - 2.0
----- -----
Total items that will not be reclassified to profit
or loss - 2.0
Items that may be reclassified subsequently to
profit or loss
Movement in fair value of cash flow hedges:
* Movement arising during the financial year -
discontinued operations - 0.8
* Reclassification adjustments for amounts included in
profit or loss - discontinued operations - (0.4)
Movement in fair value of PPP and other investments
- continuing operations 11 7.3 (1.8)
Deferred tax on items recognised in equity that
may be reclassified - discontinued operations - (0.1)
----- -----
Total items that may be reclassified subsequently
to profit or loss 7.3 (1.5)
Other comprehensive income for the year net of
tax 7.3 0.5
------------------------------------------------------------ ----- ----- -----
Total comprehensive income for the year 15.0 320.9
------------------------------------------------------------ ----- ----- -----
Balance sheet
30 June 30 June
2021 2020
GBPm GBPm
------------------------------------- ------- -------
Assets
Non-current assets
Intangible assets 5.7 7.8
Goodwill 10 77.2 77.2
Property, plant and equipment 4.4 3.8
Right-of-use assets 19.5 22.8
Investments in subsidiaries - -
Investments in joint ventures 0.2 0.2
PPP and other investments 11 49.1 40.7
Retirement benefit asset - 1.0
Deferred income tax assets 16 14.3 4.3
------------------------------------- ------- -------
Total non-current assets 170.4 157.8
------------------------------------- ------- -------
Current assets
Trade and other receivables 12 243.3 247.5
Current income tax assets 8.8 23.1
Cash and cash equivalents 13 216.2 197.2
------------------------------------- ------- -------
Total current assets 468.3 467.8
------------------------------------- ------- -------
Total assets 638.7 625.6
------------------------------------- ------- -------
Liabilities
Current liabilities
Trade and other payables 14 (485.4) (458.8)
Lease liabilities (7.3) (9.5)
Provisions for other liabilities and
charges - (13.9)
------------------------------------- ------- -------
Total current liabilities (492.7) (482.2)
------------------------------------- ------- -------
Non-current liabilities
Lease liabilities (11.9) (12.8)
Provisions for other liabilities and
charges - (10.1)
------------------------------------- ------- -------
Total non-current liabilities (11.9) (22.9)
------------------------------------- ------- -------
Total liabilities (504.6) (505.1)
------------------------------------- ------- -------
Net assets 134.1 120.5
------------------------------------- ------- -------
Equity
Ordinary shares 55.5 55.5
Other reserves 18 118.4 85.7
Retained earnings 18 (39.8) (20.7)
------------------------------------- ------- -------
Total equity attributable to owners
of the Company 134.1 120.5
------------------------------------- ------- -------
Consolidated statement of changes in equity
for the year ended 30 June 2021
Total
Ordinary Share Other Retained shareholders'
shares premium reserves earnings equity
Notes GBPm GBPm GBPm GBPm GBPm
------------------------------------- ----- -------- -------- --------- --------- --------------
Consolidated statement
At 30 June 2019 55.5 197.7 4.8 421.3 679.3
Adjustment as a result of transition
to IFRS 16(1) - - - (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 8 - - - (38.9) (38.9)
Distribution of Galliford Try
Homes Ltd 20 - - - (840.0) (840.0)
Capital re-organisation(2) 18 - (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
Profit for the year - - - 7.7 7.7
Other comprehensive income - - - 7.3 7.3
------------------------------------- ----- -------- -------- --------- --------- --------------
Total comprehensive income for
the year - - - 15.0 15.0
Transactions with owners:
Dividends 8 - - - (1.3) (1.3)
Purchase of shares - - - (1.1) (1.1)
Share-based payments - continuing
operations - - - 1.0 1.0
Recycling of retained earnings
to merger reserve on reversal
of impairment of investment in
Galliford Try Limited 18 - - 32.7 (32.7) -
------------------------------------- ----- -------- -------- --------- --------- --------------
At 30 June 2021 55.5 - 118.4 (39.8) 134.1
------------------------------------- ----- -------- -------- --------- --------- --------------
1 The Group adopted IFRS 16 Leases on 1 July 2019 using the
modified retrospective approach with any reclassification and
adjustments arising from the initial application recognised as an
adjustment to opening equity.
2 Galliford Try Holdings plc was incorporated on 19 September
2019. On 3 January 2020, as part of the overall process to dispose
of the Group's housebuilding operations to Vistry Group plc, a
scheme of arrangement was completed under section 26 of the
Companies Act 2006 which resulted in the admission of Galliford Try
Holdings plc 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. Consequently, the previously
consolidated share premium and merger reserve balances of Galliford
Try Limited (previously known as Galliford Try plc) were replaced
by the equivalent balances of Galliford Try Holdings plc (note
20).
Statement of cash flows
for the year ended 30 June 2021
2021 2020
Notes GBPm GBPm
---------------------------------------------------- ----- ------ -------
Cash flows from operating activities
Profit for the year 7.7 320.4
Adjustments for:
Loss/(profit) for the year from discontinued
operations 20 2.7 (353.0)
Income tax expense/(credit) - continuing
operations 7 1.0 (2.0)
Net finance income - continuing operations 6 (2.9) (4.8)
------ -------
Profit/(loss) before finance costs for continuing
operations 8.5 (39.4)
Adjustments for continuing operations:
Depreciation and amortisation 13.3 13.8
Profit on sale of PPP and other investments - (0.6)
Share-based payments 1.0 -
Share of post-tax (profits)/losses from joint
ventures (0.5) 0.2
(Decrease)/increase in provisions (0.3) 23.2
---------------------------------------------------- ----- ------ -------
Net cash generated from/(used in) operations
before changes in working capital 22.0 (2.8)
Decrease in trade and other receivables 9.4 128.5
Increase/(decrease) in trade and other payables 27.4 (257.1)
---------------------------------------------------- ----- ------ -------
Net cash generated from/(used in) operations 58.8 (131.4)
Interest received 4.1 4.9
Interest paid (1.2) (1.0)
Net surplus returned on wind up of defined
benefit pension scheme 1.0 -
Income tax received 4.5 7.5
---------------------------------------------------- ----- ------ -------
Net cash generated from/(used in) operating
activities from continuing operations 67.2 (120.0)
Net cash used in operating activities from
discontinued operations (3.6) (32.1)
---------------------------------------------------- ----- ------ -------
Net cash generated from/(used in) operating
activities 63.6 (152.1)
Cash flows from investing activities
Dividends received from joint ventures and
associates 0.5 -
Amounts advanced to joint ventures (5.2) (2.4)
Acquisition of PPP and other investments (1.9) (6.6)
Proceeds from disposal of PPP and other investments
and loan repayments 0.7 5.8
Acquisition of property, plant and equipment (2.1) (1.4)
---------------------------------------------------- ----- ------ -------
Net cash (used in)/generated from investing
activities from continuing operations (8.0) (4.6)
Net cash (used in)/generated from investing
activities from discontinued operations (23.7) 362.6
---------------------------------------------------- ----- ------ -------
Net cash (used in)/generated from investing
activities (31.7) 358.0
Cash flows from financing activities
Repayment of lease liabilities (10.5) (10.0)
Purchase of own shares (1.1) -
Dividends paid to Company shareholders 8 (1.3) (38.9)
---------------------------------------------------- ----- ------ -------
Net cash used in financing activities from
continuing operations (12.9) (48.9)
Net cash used in financing activities from
discontinued operations - (101.4)
---------------------------------------------------- ----- ------ -------
Net cash used in financing activities (12.9) (150.3)
Net increase in cash and cash equivalents 19.0 55.6
---------------------------------------------------- ----- ------ -------
Cash and cash equivalents at 1 July 13 197.2 141.6
---------------------------------------------------- ----- ------ -------
Cash and cash equivalents at 30 June 13 216.2 197.2
---------------------------------------------------- ----- ------ -------
1 Galliford Try Holdings plc was incorporated on 19 September
2019. On 3 January 2020 its entire share capital 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 (note 20).
Notes to the consolidated financial statements
1 Basis of preparation
The financial information set out in this preliminary
announcement does not constitute Galliford Try Holdings plc's
statutory accounts for the years ended 30 June 2021 and 31 June
2020. Statutory accounts for the year ended 30 June 2021 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting. The Auditor has reported on those accounts;
their report was unqualified, did not draw attention by way of
emphasis, and did not contain a statement under Section 498 (2) or
(3) of the Companies Act 2006. Statutory accounts for the year
ended 30 June 2020 have been delivered to the Registrar of
Companies. The Auditor has reported on those accounts; their report
was unqualified, did not draw attention by way of emphasis, and did
not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006.
The financial information contained in this results announcement
has been prepared on the basis of the accounting policies set out
in the statutory statements for the year ended 30 June 2021. Whilst
the financial information included in this announcement has been
computed in accordance with the recognition and measurement
requirements of international accounting standards in accordance
with international financial reporting standards adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European
Union, this announcement does not itself contain sufficient
disclosures to comply with IFRS.
2 Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 30 June 2020.
3 Segmental reporting
Segmental reporting is presented in the consolidated financial
statements in respect of the Group's business segments, which are
the primary basis of segmental reporting. The business segmental
reporting reflects the Group's management and internal reporting
structure. Segmental results include items directly attributable to
the segment, as well as those that can be allocated on a reasonable
basis. As the Group has no material activities outside the UK,
segment reporting is not required by geographical region.
The Chief Operating Decision-Makers (CODM) have been identified
as the Group's Chief Executive and Finance Director. The CODM
review the Group's internal reporting in order to assess
performance and allocate resources. Management has determined the
operating segments of the continuing 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.
Income statement
Building Infrastructure PPP Investments Central Total
Year ended 30 June 2021 GBPm GBPm GBPm GBPm GBPm
-------------------------------------------- -------- -------------- --------------- ------- -------
Revenue 789.2 329.2 6.4 - 1,124.8
Operating profit/(loss) before amortisation
of intangible assets 15.9 6.0 (1.8) (10.0) 10.1
Share of post tax profits from joint
ventures - - 0.5 - 0.5
Finance income - 0.1 3.9 0.1 4.1
Finance costs (0.3) (0.6) - (0.3) (1.2)
-------------------------------------------- -------- -------------- --------------- ------- -------
Profit/(loss) before amortisation and
taxation 15.6 5.5 2.6 (10.2) 13.5
Amortisation of intangible assets (1.0) - - (1.1) (2.1)
-------------------------------------------- -------- -------------- --------------- ------- -------
Profit before taxation 14.6 5.5 2.6 (11.3) 11.4
Income tax expense (1.0)
-------------------------------------------- -------- -------------- --------------- ------- -------
Profit for the year 10.4
-------------------------------------------- -------- -------------- --------------- ------- -------
Building Infrastructure PPP Investments Central Total
Year ended 30 June 2020 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 loss before
amortisation of intangible assets (51.9) (1.8) (0.3) (8.2) (62.2)
Exceptional items (note 5) (2.0) 27.3 - (0.2) 25.1
-------------------------------------------- -------- -------------- --------------- ------- -------
Operating (loss)/profit before amortisation
and taxation (53.9) 25.5 (0.3) (8.4) (37.1)
Share of post tax profits from joint
ventures - - (0.2) - (0.2)
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 intangibles (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 year to 30 June 2021, this
amounted to GBP39.4m (2020: GBP51.8m) for continuing operations, of
which GBPnil (2020: GBP16.9m) was in Building, GBP24.7m (2020:
GBP21.9m) was in Infrastructure and GBP14.7m (2020: GBP13.0m) was
in central costs.
Balance sheet
Building Infrastructure PPP Investments Central Total
30 June 2021 Notes GBPm GBPm GBPm GBPm GBPm
------------------------------- ----- -------- -------------- --------------- ------- -------
Goodwill and intangible assets 42.9 37.2 - 2.8 82.9
Working capital employed (82.3) (132.0) 40.0 9.3 (165.0)
Net cash 13 87.0 44.6 (10.0) 94.6 216.2
------------------------------- ----- -------- -------------- --------------- ------- -------
Net assets 47.6 (50.2) 30.0 106.7 134.1
Total Group liabilities (504.6)
------------------------------- ----- -------- -------------- --------------- ------- -------
Total Group assets 638.7
------------------------------- ----- -------- -------------- --------------- ------- -------
Building Infrastructure PPP Investments Central Total
30 June 2020 Notes GBPm GBPm GBPm GBPm GBPm
------------------------------- ----- -------- -------------- --------------- ------- -------
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 13 111.1 (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
------------------------------- ----- -------- -------------- --------------- ------- -------
4 Revenue
Nature of revenue streams
(i) Building and Infrastructure segments
Our Construction business operates nationwide, working with
clients predominantly in the public and regulated sectors, such as
health, education and defence markets within the Building segment
and road, and water markets within the Infrastructure segment (as
well as private commercial clients). 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.
Nature, timing of satisfaction of performance obligations
Revenue stream 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 dependent
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-reimbursable (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.
----------------- ---------------------------------------------------------------
Facilities Contracts undertaken within the Building segment that
management* provide full life-cycle solutions to clients, are accounted
for as a single performance obligation, with revenue
recognised over time and typically on a straight-line
basis.
----------------- ---------------------------------------------------------------
* Facilities management represents less than 5% of the total Building segment turnover.
(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.
Nature, timing of satisfaction of performance obligations
Revenue stream 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 considers the split of revenue by operating segment to
be the most appropriate disaggregation. All revenue has been
derived from performance obligations settled over time (2020:
GBP0.8m was considered to be settled at a point in time, with all
remaining revenue recognised over time).
Revenue on existing contracts, where performance obligations are
unsatisfied or partially unsatisfied at the balance sheet date, is
expected to be recognised as follows:
2024
2022 2023 onwards Total
Revenue - year ended 30 June 2021 GBPm GBPm GBPm GBPm
------------------------------------------------- ----- ----- -------- -------
Building 550.5 117.1 4.7 672.3
Infrastructure 239.3 72.8 14.4 326.5
------------------------------------------------- ----- ----- -------- -------
Total Construction 789.8 189.9 19.1 998.8
PPP Investments 1.8 1.8 24.4 28.0
------------------------------------------------- ----- ----- -------- -------
Total transaction price allocated to performance
obligations yet to be satisfied 791.6 191.7 43.5 1,026.8
------------------------------------------------- ----- ----- -------- -------
2023
2021 2022 onwards Total
Revenue - year ended 30 June 2020 GBPm GBPm GBPm GBPm
------------------------------------------------- ----- ----- -------- -------
Building 519.3 172.9 10.3 702.5
Infrastructure 203.1 49.6 27.3 280.0
------------------------------------------------- ----- ----- -------- -------
Total Construction 722.4 222.5 37.6 982.5
PPP Investments 1.9 1.6 25.1 28.6
------------------------------------------------- ----- ----- -------- -------
Total transaction price allocated to performance
obligations yet to be satisfied 724.3 224.1 62.7 1,011.1
------------------------------------------------- ----- ----- -------- -------
Any element of variable consideration is estimated at a value
that is highly probable not to result in a significant reversal in
the cumulative revenue recognised.
5 Exceptional items
2021 2020
GBPm GBPm
----------------------------------------------- ----- -----
Revenue - impact of legacy contracts(1) - 32.0
Cost of sales - charge on legacy contracts(1) - (4.0)
Cost of sales - restructure costs(2) - (2.3)
Administrative expenses - restructure costs(2) - (0.6)
----------------------------------------------- ----- -----
Operating profit - 25.1
----------------------------------------------- ----- -----
There were no exceptional items in the year. The items in
respect of the prior year 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).
6 Net finance income
2021 2020
GBPm GBPm
------------------------------------------------------------ ----- -----
Interest receivable on bank deposits 0.1 0.3
Interest receivable from PPP Investments and joint ventures 3.9 5.4
Other interest receivable 0.1 0.1
------------------------------------------------------------ ----- -----
Finance income 4.1 5.8
Other (including interest on lease liabilities) (1.2) (1.0)
------------------------------------------------------------ ----- -----
Finance costs (1.2) (1.0)
Net finance income 2.9 4.8
------------------------------------------------------------ ----- -----
7 Income tax charge
2021 2020
Notes GBPm GBPm
----------------------------------------------- ----- ----- -----
Analysis of expense in year
Current year's income tax
Current tax 0.5 (7.1)
Deferred tax(1) 16 5.0 0.3
Adjustments in respect of prior years
Current tax (4.8) 8.2
Deferred tax 16 0.3 (3.4)
----------------------------------------------- ----- ----- -----
Income tax expense/(credit) 1.0 (2.0)
----------------------------------------------- ----- ----- -----
Tax on items recognised in other comprehensive
income
Tax recognised in other comprehensive income - -
Total taxation 1.0 (2.0)
----------------------------------------------- ----- ----- -----
1 Includes impact of change in rate of tax.
The total income tax expense for the year of GBP1.0m (2020:
credit of GBP2.0m) is lower (2020: tax credit was lower) than the
blended standard rate of corporation tax in the UK of 19.0% (2020:
19.0%).
In the Spring Budget 2021, the UK Government announced that from
1 April 2023, the corporation tax rate would increase from 19% to
25%. This new law was substantively enacted in the Finance Bill
2021 and received Royal Assent on 10 June 2021. Where appropriate,
deferred taxes at the balance sheet date have been measured using
the appropriate tax rates (based on when the underlying balance is
expected to crystallise) and reflected in these financial
statements. The Group has assessed that a deferred tax asset equal
to the value of unutilised tax credits expected to be utilised over
the next three 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 (note 16).
8 Dividends (1)
2021 2020
-------------------------------- ---------------- ----------------
pence pence
GBPm per share GBPm per share
-------------------------------- ---- ---------- ---- ----------
Previous year final - - 38.9 35.0
Current year interim 1.3 1.2 - -
-------------------------------- ---- ---------- ---- ----------
Dividend recognised in the year 1.3 1.2 38.9 35.0
-------------------------------- ---- ---------- ---- ----------
The following dividends were declared by the Company in respect
of each accounting period presented:
2021 2020
------------------------------ ---------------- ----------------
pence pence
GBPm per share GBPm per share
------------------------------ ---- ---------- ---- ----------
Interim 1.3 1.2 - -
Final 3.9 3.5 - -
------------------------------ ---- ---------- ---- ----------
Dividend relating to the year 5.2 4.7 - -
------------------------------ ---- ---------- ---- ----------
The directors are proposing a final dividend in respect of the
financial year ended 30 June 2021 of 3.5 pence per share (2020:
nil), bringing the total dividend in respect of 2021 to 4.7 pence
per share (2020: nil). The final dividend will absorb approximately
GBP3.9m of equity. Subject to shareholders' approval at the AGM to
be held on 12 November 2021, the dividend will be paid on 10
December 2021 to shareholders who are on the register of members at
the close of business on 12 November 2021.
1 The Company became the ultimate holding company of the Group
on 3 January 2020 and the dividend of 35.0 pence per share was paid
in December 2019 by the previous ultimate holding company of the
Group (Galliford Try Limited, previously known as Galliford Try
plc).
9 Earnings per share
Basic and diluted earnings/(losses) per share (EPS)
Basic EPS is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary
shares outstanding during the year, excluding those held by the
Trust, which are treated as cancelled.
Under normal circumstances, the average number of shares is
diluted by reference to the average number of potential ordinary
shares held under option in the year. The dilutive effect amounts
to the number of ordinary shares which would be purchased using the
aggregate difference in value between the market value of shares
and the share option price. Only shares that have met their
cumulative performance criteria are included in the dilution
calculation. The Group has two classes of potentially dilutive
ordinary shares: those share options granted to employees where the
exercise price is less than the average market price of the
Company's ordinary shares during the year and the contingently
issuable shares under the Group's long-term incentive plans. A loss
per share cannot be reduced through dilution, hence this dilution
is only applied where the Group has reported a profit.
The earnings and weighted average number of shares used in the
calculations are set out below.
2021 2020
---------------------------------- -------------------------------- --------------------------------
Weighted Weighted
average Per share average Per share
Earnings number amount Earnings number amount
GBPm of shares pence GBPm of shares pence
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Continuing operations
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Basic EPS - pre-exceptional
Earnings attributable to ordinary
shareholders pre-exceptional
items 10.4 109,976,145 9.5 (52.9) 110,798,602 (47.7)
Basic EPS
Earnings attributable to ordinary
shareholders post-exceptional
items 10.4 109,976,145 9.5 (32.6) 110,798,602 (29.4)
Effect of dilutive securities:
Options n/a 3,804,698 n/a n/a - n/a
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Diluted EPS - pre-exceptional 10.4 113,780,843 9.1 (52.9) 110,798,602 (47.7)
Diluted EPS 10.4 113,780,843 9.1 (32.6) 110,798,602 (29.4)
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Total operations
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Basic EPS - pre-exceptional
Earnings attributable to ordinary
shareholders pre-exceptional
items 7.7 109,976,145 7.0 300.1 110,798,602 270.9
Basic EPS
Earnings attributable to ordinary
shareholders post-exceptional
items 7.7 109,976,145 7.0 320.4 110,798,602 289.2
Effect of dilutive securities:
Options n/a 3,804,698 n/a n/a - n/a
---------------------------------- -------- ----------- --------- -------- ----------- ---------
Diluted EPS - pre-exceptional 7.7 113,780,843 6.8 300.1 110,798,602 270.9
Diluted EPS 7.7 113,780,843 6.8 320.4 110,798,602 289.2
---------------------------------- -------- ----------- --------- -------- ----------- ---------
The discontinued operations loss per share for the year was 2.5p
(2020: earnings per share of 318.6p) and the diluted loss per share
for the year was 2.3p (2020: earnings per share of 318.6p).
10 Goodwill
GBPm
------------------------------------ ------
Cost
At 30 June 2019 160.3
Addition 6.9
Disposal (90.0)
------------------------------------ ------
At 30 June 2020 and 30 June 2021 77.2
------------------------------------ ------
Aggregate impairment at 1 July 2019 (0.7)
Disposal 0.7
------------------------------------ ------
At 30 June 2020 and 30 June 2021 -
------------------------------------ ------
Net book amount
At 30 June 2021 77.2
---------------- -----
At 30 June 2020 77.2
---------------- -----
At 30 June 2019 159.6
---------------- -----
The addition in the prior year related to the acquisition of
Strategic Teams Group (STG) and the disposal was in respect of the
sale of the Group's housebuilding divisions to Vistry Group plc on
3 January 2020 (note 20).
Goodwill is allocated to the Group's CGUs identified according
to business segment. The goodwill is attributable to the following
business segments:
2021 2020
GBPm GBPm
--------------- ----- -----
Building 40.0 40.0
Infrastructure 37.2 37.2
--------------- ----- -----
77.2 77.2
--------------- ----- -----
Impairment review of goodwill and key assumptions
Goodwill is tested for impairment at least annually. The
recoverable amount of a CGU is determined based on value in use
calculations. These calculations use pre-tax cash flow projections
based on future financial budgets approved by the Board, based on
past performance and its expectation of market developments. The
key assumptions within these budgets relate to revenue and the
future profit margin achievable, in line with our strategy and
targets. Future budgeted revenue is based on management's knowledge
of actual results from prior years and latest forecasts for the
current year, along with the existing secured works and
management's expectation of the future level of work available
within the market sector. In establishing future profit margins,
the margins currently being achieved are considered in conjunction
with expected inflation rates in each cost category. In Building
and Infrastructure, the margins currently being achieved are
expected to increase in line with the strategy set out in the
Strategic report included within the Annual Report for the year
ended 30 June 2021.
11 PPP and other investments
2021 2020
GBPm GBPm
------------------------------------------- ----- -----
At 1 July 40.7 41.6
Additions 1.9 6.6
Disposal of housebuilding divisions - (0.5)
Disposals and subordinated loan repayments (1.0) (5.2)
Movement in fair value 7.5 (1.8)
------------------------------------------- ----- -----
At 30 June 49.1 40.7
------------------------------------------- ----- -----
These comprise PPP/PFI investments and investments in other
listed securities (acquired during the prior year as a result of
the shares held in the Employee Benefit Trust in Galliford Try
Limited, formerly Galliford Try plc, which resulted in the receipt
of shares in Vistry Group plc, held at fair value, following the
sale of the housebuilding divisions to Vistry Group plc on 3
January 2020). Of the total fair value movement in the year of
GBP7.5m, GBP7.3m relates to PPP investments and has been recorded
in equity whilst GBP0.2m relates to the residual Vistry Group plc
shares held and has been recorded in the income statement.
12 Trade and other receivables
2021 2020
Notes GBPm GBPm
---------------------------------------------- ----- ----- -----
Amounts falling due within one year:
Trade receivables 51.8 49.4
Less: provision for impairment of receivables (0.1) (1.6)
---------------------------------------------- ----- ----- -----
Trade receivables - net 51.7 47.8
Contract assets(1) 15 159.1 172.0
Amounts due from joint ventures 6.1 0.9
Other receivables 12.8 9.8
Prepayments 13.6 17.0
---------------------------------------------- ----- ----- -----
243.3 247.5
---------------------------------------------- ----- ----- -----
1 Contract assets of GBP159.1m at 30 June 2021 includes a
life-time expected credit loss allowance of GBP14.0m (2020:
GBP14.0m).
13 Cash and cash equivalents
2021 2020
GBPm GBPm
------------------------------------------------------- ----- -----
Cash at bank and in hand and per the statement of cash
flows 216.2 197.2
------------------------------------------------------- ----- -----
Cash at bank above includes GBPnil (2020: GBPnil) of restricted
cash and the Group has no bank borrowings or loans.
Net cash excludes IFRS 16 lease liabilities.
14 Trade and other payables
2021 2020
Notes GBPm GBPm
------------------------------------------- ----- ----- -----
Trade payables 90.9 108.1
Contract liabilities 15 99.1 112.3
Other taxation and social security payable 30.5 18.6
Other payables 1.2 1.2
Accruals 263.7 218.6
------------------------------------------- ----- ----- -----
485.4 458.8
------------------------------------------- ----- ----- -----
15 Contract balances
Contract assets and liabilities are included within "trade and
other receivables" and "trade and other payables" respectively on
the face of the balance sheet. Where there is a corresponding
contract asset and liability in relation to the same contract, the
balance shown is the net position. The timing of work performed
(and thus revenue recognised), billing profiles and cash collection
results in trade receivables (amounts billed to date and unpaid),
contract assets (unbilled amounts where revenue has been
recognised) and customer advances and deposits (contract
liabilities), where no corresponding work has yet to be performed,
being recognised on the Group's balance sheet.
The reconciliation of the Group opening to closing contract
balances is shown below:
2021 2020
---------------------------------------------- --------------------- ---------------------
Contract Contract Contract Contract
asset liability asset liability
GBPm GBPm GBPm GBPm
---------------------------------------------- --------- ---------- --------- ----------
At 30 June 2020 172.0 (112.3) 332.8 (264.0)
Balances removed due to business disposals(1) - - (68.3) 127.6
Revenue recognised in the year (continuing
operations)(2) 1,073.5 51.3 1,051.3 70.3
Net cash received in advance of performance
obligations being fully satisfied - (38.1) - (46.2)
Transfers in the year from contract assets
to trade receivables (1,086.4) - (1,143.8) -
---------------------------------------------- --------- ---------- --------- ----------
30 June 2021 159.1 (99.1) 172.0 (112.3)
---------------------------------------------- --------- ---------- --------- ----------
1 Disposal of housebuilding divisions (note 20).
2 Of the revenue recognised in the prior year, GBP32m was in
respect of the final agreement for Aberdeen Western Peripheral Road
(AWPR). The revenue was previously constrained due to uncertainty
of the ongoing negotiation as at 30 June 2019.
16 Deferred income tax
Deferred income tax is calculated in full on temporary
differences under the liability method and is measured at the
average tax rates that are expected to apply in the periods in
which the timing differences are expected to reverse.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current income tax assets
against current income tax liabilities. The net deferred tax
position at 30 June was:
2021 2020
GBPm GBPm
---------------------------------------------- ----- -----
Deferred income tax assets - non-current 15.0 5.3
---------------------------------------------- ----- -----
Deferred income tax assets 15.0 5.3
---------------------------------------------- ----- -----
Deferred income tax liabilities - non-current (0.7) (1.0)
---------------------------------------------- ----- -----
Deferred income tax liabilities (0.7) (1.0)
---------------------------------------------- ----- -----
Net deferred income tax 14.3 4.3
---------------------------------------------- ----- -----
The movement for the year in the net deferred income tax account
is as shown below:
2021 2020
GBPm GBPm
-------------------------------------------------------------- ----- -----
At 1 July 4.3 1.3
Current year's deferred income tax - continuing operations(1) (8.9) (0.3)
Current year's deferred income tax - discontinued operations - 0.3
Adjustment in respect of prior years - continuing operations (0.3) 3.4
Adjustment in respect of prior years - discontinued
operations - (0.1)
(Expense) recognised in equity - discontinued operations - (0.1)
Transfer from current tax assets and change in rates
of deferred income tax(1) 19.2 -
Acquisition of subsidiaries(2) - (1.0)
Disposal of subsidiaries(3) - 0.8
-------------------------------------------------------------- ----- -----
At 30 June 14.3 4.3
-------------------------------------------------------------- ----- -----
1 Includes impact of change in rate of tax.
2 The acquisition of STG during the year to 30 June 2020, which
was subsequently disposed as part of the housebuilding divisions on
3 January 2020.
3 Disposal of housebuilding divisions on 3 January 2020 (note 20).
The Group has recorded a deferred tax asset in respect of
unutilised tax credits resulting from historic trading contract
losses. This asset was previously recorded within current tax
assets and was transferred in the year. The Group has assessed that
an asset equal to the value of unutilised tax credits expected to
be utilised over the next three financial years is appropriate, as,
based on the already secured work for that timeframe and the
approved Group budgets, management have assessed it is probable
that the Group will have sufficient taxable profits to enable the
deferred tax asset to be recovered. These losses can be carried
forward indefinitely and have no expiry date.
Any remaining unutilised tax credits have not been recognised
and the Group has approximately GBP95m of unrecognised trading
losses.
17 Share-based payments
The Group operates performance-related share incentive plans for
Executives, details of which are set out in the Directors'
Remuneration report. The Group also operates sharesave schemes. The
total charge for the year relating to employee share-based payment
plans was GBP1.0m (2020: GBPnil), all of which related to
equity-settled share-based payment transactions. After deferred
tax, the total charge was GBP1.0m (2020: GBPnil).
18 Other reserves and retained earnings
Other Retained
reserves earnings
Group Notes GBPm GBPm
-------------------------------------------------------- ----- --------- ---------
At 30 June 2019 4.8 421.3
Adjustment as a result of transition to IFRS 16
on 1 July 2019 - (1.0)
-------------------------------------------------------- ----- --------- ---------
Restated at 1 July 2019 4.8 420.3
Profit for the year - 320.4
Dividends paid 8 - (38.9)
Actuarial gains recognised related to retirement
benefit obligations - discontinued operations - 2.0
Share-based payments - continuing and discontinued
operations - 0.2
Movement in fair value of PPP and other investments 11 - (1.8)
Movement in fair value of derivative financial
instruments - 0.4
Deferred and current tax on movements in equity 16 - (0.1)
Capital reorganisation1 20 227.4 (29.7)
Disposal of housebuilding divisions to Vistry Group
plc 20 - (840.0)
Impairment of investment in Galliford Try Limited
and associated recycling of merger reserve to retained
earnings (146.5) 146.5
-------------------------------------------------------- ----- --------- ---------
At 30 June 2020 85.7 (20.7)
Profit for the year - 7.7
Dividends paid 8 - (1.3)
Share-based payments 17 - 1.0
Movement in fair value of PPP and other investments 11 - 7.3
Purchase of own shares - (1.1)
Reversal of impairment of investment in Galliford
Try Limited and associated recycling of merger
reserve to retained earnings 32.7 (32.7)
-------------------------------------------------------- ----- --------- ---------
At 30 June 2021 118.4 (39.8)
-------------------------------------------------------- ----- --------- ---------
The Group's other reserves relates to a merger reserve amounting
to GBP118.4m (2020: GBP85.7m).
1 Following the disposal of the housebuilding 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 all shares of Galliford Try Limited
(formerly Galliford Try plc).
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 GBP146.8m
(2020: GBP157.4m).
20 Discontinued operations
On 3 January 2020, the Group completed the disposal of the
Linden Homes and Partnerships & Regeneration divisions of
Galliford Try plc (in addition to certain other assets and
liabilities transferred to Vistry Group plc as part of this
transaction), 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. Additionally, 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, were
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.
As a result of this disposal, the Linden Homes and Partnerships
& Regeneration segments were classified as discontinued
operations.
The (loss)/profit of these discontinued operations are as
follows:
Central Total
Year ended 30 June 2021 GBPm GBPm
------------------------------------------ ------- -----
Revenue - -
Operating loss and loss before taxation (2.7) (2.7)
Income tax expense - -
------------------------------------------ ------- -----
Loss after tax of discontinued operations (2.7) (2.7)
------------------------------------------ ------- -----
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
these discontinued operations.
Linden Partnerships
Homes & Regeneration Central Total
Year ended 30 June 2020 - discontinued operations GBPm GBPm GBPm GBPm
-------------------------------------------------- ------ --------------- ------- -----
Revenue 303.1 348.8 - 651.9
Profit/(loss) from operations 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 after tax of discontinued operations 24.8
-------------------------------------------------- ------ --------------- ------- -----
The Linden Homes and Partnerships & Regeneration segments
(which comprise the housebuilding operations) and certain other
assets and liabilities were transferred to Vistry Group plc on 3
January 2020 (including the GBP100m Private Placement notes and two
of the Group's defined benefit pension schemes).
2020
Gain on sale and distribution of the discontinued operations GBPm
---------------------------------------------------------------- -------
Net proceeds received 476.3
Transaction costs (18.9)
---------------------------------------------------------------- -------
Total net disposal consideration 457.4
Carrying amount of net assets sold (969.2)
---------------------------------------------------------------- -------
(511.8)
Fair value of distribution of Galliford Try Homes Limited 840.0
---------------------------------------------------------------- -------
Net gain on sale before income tax 328.2
Income tax expense on gain -
---------------------------------------------------------------- -------
Net gain on sale after income tax 328.2
---------------------------------------------------------------- -------
Net profit from discontinued operations for the year per Income
Statement 353.0
---------------------------------------------------------------- -------
The total proceeds received of GBP476.3m consisted of GBP300.0m
in cash, the transfer of the GBP100.0m Private Placement 10-year
sterling notes to the buyer and a further working capital
adjustment of GBP76.3m. The Group incurred total third-party
adviser fees, professional fees and stamp duty in respect of the
transaction of GBP18.9m, resulting in net disposal proceeds of
GBP457.4m. The carrying amount of net assets immediately prior to
the disposal in respect of the discontinued operations was
GBP969.2m.
As indicated above, Linden Homes was disposed via a distribution
to shareholders. The owner of each Galliford Try share (in
Galliford Try Limited, formerly Galliford Try plc) received 0.57406
shares in Vistry Group plc (formerly Bovis Homes plc) as well as
one replacement share in Galliford Try Holdings plc. Under IFRIC 17
Distributions of Non-cash Assets to Owners, this distribution is
reflected at fair value, with the difference between the fair value
of the assets distributed and their carrying value (within the
total housebuilding net assets carrying value of GBP969.2m)
reflected in profit or loss. Based on the market value of the
shares in Vistry Group plc at the time of completion (of GBP13.12),
the fair value of the assets distributed was GBP840.0m.
Finally, as a result of the transaction, incorporating the
disposal of the housebuilding divisions, the completion of the
court-approved scheme of arrangement, reorganisation of the Group
structure with the insertion of Galliford Try Holdings plc as the
ultimate parent of the Group (under Part 26 of the Companies Act
2006) and the subsequent capital reduction of Galliford Try
Limited, the Group's consolidated share premium and other reserves
were reduced by GBP197.7m to nil and increased by GBP80.9m to
GBP85.7m respectively, with the net balance recycled through
retained earnings.
This resulted in a net gain on sale from the transaction of
GBP328.2m, which in addition to the trading profit for the year of
GBP24.8m, resulted in a net profit for the year from discontinued
operations of GBP353.0m, as reflected in the Income Statement.
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