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Galliford Try increases dividend by a third as profits hold firm

Galliford Try has increased its dividend by a third after it saw profits hold steady in the first half of 2013.

Reporting results for the six months to 31 December 2012, the house builder and construction firm said revenues dipped 9 per cent to £678.3m (2012: £746.8m) with profit before tax flat at £32.3m (2012: £32.2m)

It is raising the interim dividend to shareholders from 9 to 12 pence.

The construction margin was down from 2.2 per cent to 1.9 per cent, which it said was in line with expectations in a “continuing difficult market”.

The order book held at £1.6bn, underpinned by long term frameworks, while all 2013 projected revenues have been secured, with 65 per cent secured for 2014.

Construction had a cash balance of £137m in line with forecast (H1 2012: £149m), as the division continues to focus on cash management and sectors with high barriers to entry.

Chief executive Greg Fitzgerald said: “Our construction business continues to deliver a robust performance against the backdrop of a difficult market.  We have maintained our core skills and our focus on margin protection, thus delivering profits whilst managing our planned reduction in turnover.

“We are also encouraged by our performance since the start of the calendar year and are confident of meeting the board’s expectations for the full year. 

“Reflecting our strong first half performance and future confidence we have increased the interim dividend by 33 per cent.”

In building, profit from operations was £3.8 on £185.3m of revenue, representing a margin of 2.1 per cent. That compared to £4.6m, £199.2m and 2.3 per cent a year earlier.

Infrastructure came under more pressure, with profit from operations of £3.6m on revenue of £215.4 million, representing a margin of 1.7 per cent, compared with H1 2012: £5.2m, on £249.7m and a 2.1 per cent margin.

House building saw a record number of total completions at 1,364 units (H1 2012: 1,352), and a 12.1 per cent margin.

It said 100 per cent of plots for planned production in 2013 and 2014 secured with 65 per cent secured for 2015, and 84 per cent of the 10,700 plot landbank acquired at current market values.

The company completed its strategy of trebling the size of the house building business by June 2012, and is now focusin on margin growth to 15 per cent, with a focus on southern England.

Mr Fitzgerald said: “In a stable market we are seeing continued momentum in housebuilding particularly in the geographic regions where we operate.

“In line with our stated strategy and progress to date we will continue our disciplined focus on margin enhancement in housebuilding.

Net debt was £58.2m, down from £69.8m.

 H1 2013H1 2012
Revenue £m 277.5 277.0
Profit from operations £m 33.5 35.0
Operating profit margin %  12.1%  12.6%


 H1 2013H1 2012
Revenue £m 439.8499.9
Profit from operations £m8.3 10.9
Operating profit margin %1.9%2.2%

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