Galliford Try H1 profit rises, annual profit seen at top end of analyst forecasts
By Michele Maatouk
Date: Wednesday 13 Feb 2019
(Sharecast News) - Galliford Try posted a rise in first-half profit on Wednesday as it said its full-year turnout is expected to come in at the upper end of analysts' current range.
In the six months to the end of December 2018, pre-exceptional pre-tax profit was up 4% to £84.2m even as revenue slipped 5% to £1.4bn, as the company built more houses. Linden Homes and Partnerships & Regeneration built a total of 3,069 homes, up from 2,878 in the same period a year ago.
On a statutory basis, however, pre-tax profit declined to £53.8m from £56.3m in the first half of 2017.
Net debt during the half reduced to £40m from £85m the year before, while average net debt fell to £126m from £203m.
Galliford said it took a further exceptional cost of £26m in respect of the Aberdeen Western Peripheral Route due to higher-than-expected direct costs and further delays to construction. Galliford has been delivering the bypass project in a joint venture with Balfour Beatty since the collapse of Carillion.
Chief executive Peter Truscott said: "Galliford Try has delivered a strong financial and operational performance in the first half, with further progress against our 2021 strategy. The group is well capitalised and average net debt is below previous guidance, driven by focused working capital management over the period.
"The group enters the second half of the year with a solid foundation, underpinned by a strong balance sheet and our focus on high-quality earnings which will drive further margin improvements over time. Our mix of residential development creates a robust proposition in more uncertain markets. We remain cautious of the impact of the current political uncertainty on consumer and business confidence, and the medium-term outlook for the macro economy, but believe our focused strategic objectives, strong order book and disciplined approach will deliver a full year out-turn toward the upper end of the analysts' current range."
Based on company-compiled consensus, analysts are currently forecasting pre-exceptional pre-tax profit for the year ending 30 June 2019 of between £158.8m and £192.5m, with a mean of £182.7m.
As far as Brexit is concerned, the company said that if the UK leaves the EU without a deal, the biggest impact it foresees is the effect on its markets and on the Linden Homes market in particular, of a potential severe decline in consumer confidence and economic activity in general.
"We believe our business planning is as prepared as possible for this uncertainty. We have also considered the effects on our supply chain, and engaged with our suppliers. We have made specific arrangements where we foresee the potential for disruption to the import of critical materials and products, though noting that it is impractical to try to insulate our business entirely. "
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