Galliford Try Plc - Trading Update 5 July 2011
- Tuesday, 05 July 2011 @ 08:59
Galliford Try plc, the housebuilding and construction group, today provides the following update on trading for the year ended 30 June 2011. The group expects to announce its results for the full year on 14 September 2011.
Full year results expected to be in line with current market expectations.
Net cash of over £30 million at 30 June 2011, ahead of expectations (31 December 2010: net debt £31 million; 30 June 2010: net cash £75 million).
Total housing completions up 27% to 2,170 units.
Average private sales price up 10% to £227,000 (2010: £207,000).
23% increase in housing sales carried forward at £247 million (2010: £201 million) of which £173 million is for the new financial year, representing 29% of planned output.
7% increase in total landbank to 10,250 plots (30 June 2010: 9,600 plots).
70% of landbank secured at current market values (2010: 56%), with 100% of plots required for new financial year’s production having detailed planning consent.
Resilient performance in difficult markets.
£1.75 billion order book maintained (2010: £1.8 billion).
Excellent cash management, cash in hand up on half year.
Major contract awards secured include £790 million Forth Road Crossing, £200 million United Utilities treatment works and £50 million Petrofac plant.
80% of projected revenue for new financial year secured (2010: 77%).
Greg Fitzgerald, Chief Executive, commented:
“Two years into our transformational housebuilding expansion plan, we are on target to meet our objectives. In addition, we have maintained a high quality construction order book, winning a series of valuable projects during the period, and maintaining excellent cash balances. Our financial strength and the spread of our activities mean that, subject to the economic uncertainties affecting our markets, we enter the new financial year with confidence.”
Following the improvement in the housing market early in 2011, sales levels have remained firm and prices for our homes stable. Cancellation levels of 19% are close to the historical average, and the requirement for sales incentives reduced significantly during the second half, particularly in the south east of England where our southern biased business is strong.
As production increased and we opened new sites in line with our expansion plan, the number of completions rose during the second half to bring the total for the year to 2,170; 1,988 net of the proportionate share of our partners in joint venture developments (2010: 1,705 and 1,624). During the second half of the year sales rates averaged 0.46 per site per week and we enter our new financial year with £247 million of housing sales carried forward, 23% up on last year, of which £173 million is for the 2011/12 financial year. This represents 29% of the significantly increased planned output for the new year, in line with our expansion plan (2010: £130 million and 32%). Of the 2,170 units completed in the year, private housebuilding represented 1,446 units and affordable and regeneration 724 units. The average price for private sales was £227,000 (2010: £207,000) while the price obtained for affordable homes averaged £106,000 (2010: £124,000).
Our landbank now stands at 10,250 plots of which 70% has been secured at current market values (2010: 9,600 plots and 56%), meeting our criteria for margin and return on capital based on achievable selling prices. As we enter the new financial year, during which our objective is to deliver the significant expansion plan for our housebuilding business set out at the time of our rights issue in September 2009, we have the land we need and the infrastructure in place.
The Group’s construction business has maintained its workload in markets that remain difficult, concentrating on sectors where it has a strong presence and can continue to deliver acceptable margins and cash balances. We enter our new financial year with a total order book maintained at £1.75 billion, with 80% of our planned revenues for the new year secured (2010: £1.8 billion, 77%). 40% of the order book is for the regulated sector, 42% for the public sector, and 18% for the private sector.
Although we have anticipated an overall reduction in publically financed work, we have secured a number of significant long term public sector projects in Scotland. Our strengths with the regulated utilities, particularly in water, and our presence in the gradually improving commercial market, specifically in London, puts us in an encouraging position.
Our expertise in our chosen sectors, combined with our robust financial position, has recently enabled us to secure a number of significant contracts that add further visibility to our workload. Projects recently awarded include the £790 million Forth Road Crossing project in a four party consortium, £200 million of work for our AMP5 joint venture on the Liverpool waste water treatment works for United Utilities, a £50 million project for Petrofac in the Shetland Islands and, boosting our affordable housing workload, the £347 million Gateshead regeneration programme to be carried out in joint venture with Home Group.
Two years into our transformational housebuilding expansion plan, we are on target to meet our objectives. In addition, we have maintained a high quality construction order book, winning a series of valuable projects during the period, and maintaining excellent cash balances. Our financial strength and the spread of our activities mean that, subject to the economic uncertainties affecting our markets, we enter the new financial year with confidence.