Interim Results

Galliford Try PLC
25 February 2003

Embargoed until 0700 Tuesday 25th February 2003




GALLIFORD TRY PLC


INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2002



                                                              6 Months to            6 Months to
                                                              31 Dec 2002            31 Dec 2001


Turnover                                                      £298m                  £312m


Profit before tax            - before exceptional items       £5.6m                  £6.6m
                             - after exceptional items        £3.6m                  £6.6m


Earnings per share           - before exceptional items       1.8p                   2.2p
                             - after exceptional items        1.1p                   2.2p


Interim dividend per share                                    0.5p                   0.5p





HIGHLIGHTS



Action taken to restructure construction division.



Andy Sturgess appointed as construction Managing Director, formerly Skanska
director responsible for UK building operations.



Selected in consortia with United Utilities as one of two partners to deliver
Scottish Water's four year £1.8 billion Asset Delivery Project.



Housebuilding operating profit up 33% to £10.5m



Housebuilding order book up 15%





Commenting today, Tony Palmer, Chairman said:



'Our housebuilding division has consistently demonstrated that it can achieve
good profits and growth.  The Board has taken action to restructure the
construction division to deliver the acceptable and sustainable profits which
will enable the Group to return to generating overall growth and value for
shareholders.'



Enquiries to:



David Calverley, Chief Executive                       Telephone:  [phone]
Frank Nelson, Finance Director                         Telephone:  [phone]
Ann marie Wilkinson/James Chandler Beattie Financial   Telephone:  [phone]







CHAIRMAN'S STATEMENT



I am pleased to report that our housebuilding business continues to deliver
growth and increased profits, demonstrating the benefit of our geographic spread
across the south east, south west and eastern counties of England.  However, as
we stated at the Annual General Meeting last November, our construction division
was underperforming which has resulted in the Group posting lower overall
profits for the half year.  We also announced the resignation of Deputy Chief
Executive, George Marsh.  The Board has taken positive remedial action to
restructure the construction division which it expects to return to
profitability in the second half and produce pre-exceptional results for the
full year broadly in line with last year.





Financial Review

Group profit before tax for the half year amounted to £5.6 million before
exceptional items and £3.6 million after exceptional items compared to £6.6
million last year.  Group turnover was £298 million compared to £312 million the
previous year.  £2.0 million of exceptional restructuring costs have been
charged in the first six months and we are on course to complete the process in
the second half within our overall estimate of £4 million.



The increased investment in housebuilding has resulted in higher interest
charges and net borrowings, which at 31 December stood at £35.2 million compared
to £12.9 million at 30 June 2002, representing gearing of 64%.  We expect
borrowings to have reduced by the financial year end in line with our programme
of housebuilding completions.  Shareholders funds have risen to £55.1 million
from £53.7 million at 30 June 2002.  Earnings per share for the period were 1.8p
(pre exceptional) and 1.1p (post exceptional) compared to 2.2p last year.



Our financial planning is taking account of the increases in our cost base due
to the higher insurance costs that have affected our industry, and the
additional costs we expect to incur from the next financial year going forward
to fund the deficits caused by current equity market levels in the Group's final
salary pension schemes, which were closed to new entrants in 2001.





Dividend

The directors have declared an unchanged interim dividend of 0.5p per share
which will be paid on 10 April 2003 to shareholders on the register at 21 March
2003.





Construction

The construction division incurred an operating loss of £2.0 million before
exceptional items, and £3.5 million after exceptional restructuring costs, on a
turnover of £226 million.



We have now completed the traditional building contracts that contributed to the
disappointing performance in the first half.  We have ceased those building
operations that were over dependent on work secured by pure price competition
and we are actively terminating unprofitable contracts within our maintenance
business.



We were delighted to announce the appointment of Andy Sturgess who joined us in
January as Managing Director of the construction division.  Formerly Skanska's
director responsible for UK building operations and managing director of
Kvaerner Construction UK, he has the experience of managing one of the UK's
leading building contractors and a track record of achieving profitable growth.
Following a review of the business, his objective is to ensure that the
restructured division is solely focused on the core markets where we can obtain
acceptable margins, with a cost effective structure and risk management process
that will deliver sustainable profits.

The construction division has now achieved a leading position in the provision
of construction services based on a partnership approach and framework
agreements for major clients.  We have succeeded in building on our already
strong position in our core markets of water, rail, communications, major
commercial and the public sector with 76% of the division's order book of £663
million secured on a value basis, rather than in pure price competition.  70% is
for the public and regulated sectors where there is the greatest potential and
in which we can obtain an increasing proportion of our work through the more
widespread use by clients of framework agreements and preferred supplier
policies to deliver best value.



We announced earlier this month that we have been selected, in consortia with
United Utilities, to be part of the delivery team for Scottish Water's four year
£1.8 billion Asset Delivery Project.  We hope to conclude contractual
negotiations by early April.  Our current order book for water related
industries is £203 million, the bulk of it in long term framework agreements
with the regulated providers.



Our rail skills are focused on the buildings and network structures that form
part of the railway infrastructure.  We have a total of £120 million of work
going forward including our framework agreements for Network Rail in their
northwest and midlands regions.



We are a leading provider of communications infrastructure for the major network
providers of mobile phones.  Carrying out work on over 1,000 cell sites
annually, we are expanding the range of services we offer to include programme
planning and design as well as temporary structures for short term call handling
capacity.



Our business in major commercial buildings is primarily focused in the midlands
and south of England, where we work for major property owners and developers,
many of whom have long term building programmes.  We have recently been awarded
a £35 million contract for a study centre in Oxford, where we have a track
record of high quality work.



In the public sector we have a growing workload in affordable housing and
education where we shortly expect to be appointed preferred bidder for an £18
million PFI project for schools in Bedford and a £15 million health project in
Ealing.



The contractual position at Daventry in respect of the cost of the remedial
works on the high specification floor (for which we provided in 2001) is still
being progressed and, as we are in a legal process, will inevitably take some
time to reach a resolution.





Housebuilding

Housebuilding operating profits were up from £7.9 million to £10.5 million on
turnover of £72 million (2002: £63 million) demonstrating the benefit of our
geographic spread across the south west, the eastern counties and the south east
of England.  Our increased number of smaller sites, where our policy of
providing individual designs for the more discerning purchaser has enabled us to
meet current market demand successfully, has resulted in a higher average
selling price, up 19% to £206,000, albeit on fewer homes sold, 318 compared to
359 last year.  Our land bank of plots owned or controlled totalled 2,380, an
increase of 9% on a year ago, with an average plot cost of £43,000.



In the eastern counties, Stamford Homes continued to benefit from its move
towards the more affluent areas to the south and urban centres of its region.
Its joint venture to develop and project manage 44 acres at Fairfield Hospital
near Letchworth recently secured the detailed consents which will enable the
infrastructure works for the site to commence, in line with our programme to
deliver serviced sites to the acquiring housebuilders in the autumn of this year
and to enable the first homes to be completed in the summer of 2004.



Midas Homes in the south west has had an excellent first half.  It has also been
very successful with its programme of land purchases to replace the sites
acquired through the acquisitions of Gerald Wood Homes and Knapp Group last
year.  In a partnership that includes the Prince of Wales' Foundation we are to
deliver the St. Austell urban village, a 10 acre brownfield development which
includes 148 homes for both affordable housing and private sale, for which
detailed planning consent has now been granted.



Try Homes' reputation in the south east for sensitively developing brownfield
sites and for conversions continues to generate excellent opportunities.  We
have recently started our latest conversion of an old hospital building in
Wickham, Hampshire into 48 apartments.  Planning guidance is increasingly
bringing mixed schemes with homes for sale and affordable housing together, and
we have recently secured a number of sites in partnership with housing
associations.



The first weeks of 2003 have resulted in satisfactory visitor levels and sales,
albeit there are clear signs of weakness for higher value homes in the south
east where we have little exposure.  With our homes increasingly focused on the
mainstream market, where we see the best opportunities in the near future, we
are encouraged that the order book as we entered the New Year was up 15%
compared to a year ago.  The complexity of the planning process continues to act
as a restraint on supply and in each of our three regions there is an underlying
demand that, subject to short term economic factors, will support growth in the
market over the medium term.



Prospects

With 70% of our construction order book in the public and regulated sectors we
are already strong in the markets that are forecast to demonstrate the greatest
potential in the immediate future.  The actions we have taken to restore the
division's profitability are already showing progress and will be completed by
the financial year end.



While there is some degree of uncertainty in the housing market we expect to
achieve our planned performance for the year end and will concentrate on
maintaining our regional spread with individually designed developments for the
mainstream market.



Our housebuilding division has consistently demonstrated that it can achieve
good profits and growth.  The Board has taken action to restructure the
construction division to deliver the acceptable and sustainable profits which
will enable the group to return to generating overall growth and value for
shareholders.





Tony Palmer
Chairman
25 February 2003




CONSOLIDATED PROFIT AND LOSS ACCOUNT


Half year     Year                                                     Half year ended 31 December 2002
ended         ended                                                    Pre-             Exceptional Total
31 Dec        30 June                                                  exceptional      items
2001          2002                                                     £000             £000        £000
£000          £000                                                                                  


                           Turnover
312,580       649,783      Total continuing operations                 299,890          -           299,890
(613)         (881)        Less share of joint ventures' turnover      (1,560)          -           (1,560)



311,967       648,902      Group turnover                              298,330          -           298,330

(288,122)     (598,697)    Cost of sales                               (274,592)        (1,300)     (275,892)

23,845        50,205       Gross profit                                23,738           (1,300)     22,438

(16,286)      (30,458)     Net operating expenses                      (16,691)         (698)       (17,389)

7,559         19,747       Group operating profit                      7,047            (1,998)     5,049

45            (217)        Share of profits/(losses) in joint ventures 103              -           103

-             483          Profit on sale of investment in joint       -                -           -
                           venture

-             155          Income from other fixed asset investments   -                -           -



7,604         20,168       Profit on ordinary activities before        7,150            (1,998)     5,152
                           interest

(1,009)       (2,078)      Net interest payable - Group                (1,381)          -           (1,381)
(41)          (75)                              -  Joint ventures      (162)            -           (162)   
(1,050)       (2,153)                                                  (1,543)          -           (1,543)

6,554         18,015       Profit on ordinary activities before tax    5,607            (1,998)     3,609

(1,969)       (5,728)      Tax                                         (1,783)          600         (1,183)

4,585         12,287       Profit on ordinary activities after tax     3,824            (1,398)     2,426

(1,092)       (3,292)      Dividends                                   (1,100)          -           (1,100)

3,493         8,995        Retained profit for the period              2,724            (1,398)     1,326



2.2           5.8          Basic earnings per ordinary share (pence)   1.8                          1.1

2.1           5.6          Diluted earnings per ordinary share (pence) 1.7                          1.1






CONSOLIDATED BALANCE SHEET
                                             31 Dec             31 Dec             30 June
                                             2002               2001               2002
                                             £000               £000               £000

Fixed assets
Intangible assets - goodwill                 292                562                423
Tangible assets                              12,186             12,069             12,087
Investments in joint ventures
  Share of gross assets                      9,695              2,143              660
  Share of gross liabilities                 (7,272)            (1,780)            (442)
                                             2,423              363                218
Investments in associates                    81                 81                 81
Other investments                            1,968              1,363              1,737
                                             16,950             14,438             14,546

Current assets
Stocks                                       371                630                358
Developments                                 146,943            127,172            128,475
Debtors                                      107,537            99,399             111,316
Cash at bank and in hand                     3,259              2,331              1,757
                                             258,110            229,532            241,906

Creditors: amounts falling due within one
year
Bank loans and overdrafts                    (33,373)           (12,876)           (9,556)
Other amounts falling due within one year    (170,262)          (173,245)          (174,368)
Net current assets                           54,475             43,411             57,982
Total assets less current liabilities        71,425             57,849             72,528
Creditors: amounts falling due after more
than one year                                (13,457)           (8,676)            (15,902)
Provisions for liabilities and charges       (2,905)            (1,586)            (2,905)
                                             55,063             47,587             53,721

Capital and reserves
Called up share capital                      11,003             10,871             10,999
Share premium account                        1,590              1,074              1,578
Merger reserve                               4,687              4,687              4,687
Revaluation reserve                          1,913              1,917              1,915
Other reserves                               -                  35                 -
Profit and loss account                      35,870             29,003             34,542
Equity shareholders' funds                   55,063             47,587             53,721






CONSOLIDATED CASH FLOW STATEMENT
                                                              Half year      Half year      Year
                                                              ended          ended          ended
                                                              31 Dec         31 Dec         30 June
                                                              2002           2001           2002
                                                              £000           £000           £000


Net cash (outflow)/inflow from operating activities           (13,469)       7,737          16,351
Returns on investments and servicing of finance               (1,339)        (813)          (1,809)
Taxation                                                      (2,091)        (111)          (3,446)
Capital expenditure and financial investment                  (863)          (652)          (1,492)
Acquisitions and disposals                                    (2,340)        (463)          (833)
Equity dividends paid                                         (2,200)        (1,952)        (3,044)

Net cash (outflow)/inflow before use of liquid resources and
financing                                                     (22,302)       3,746          5,727

Management of liquid resources
Financing
Issue of ordinary share capital                               16             55             687
Capital element of finance lease rental payments              (29)           (16)           (1)
Increase/(decrease) in bank loans                             22,933         (23,766)       (35,424)
Issue of loan notes                                           -              -              159
Repayment of loan notes                                       -              (59)           (100)
                                                              22,920         (23,786)       (34,679)
Increase/(decrease) in cash in the period                     618            (20,040)       (28,952)

Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the period                     618            (20,040)       (28,952)
(Increase)/decrease in debt and lease financing               (22,904)       20,164         35,366
Borrowings acquired with subsidiary                           -              (1,431)        (1,431)
Loan notes issued in respect of acquisition                   -              -              (3,820)

Change in net debt in the period                              (22,286)       (1,307)        1,163
Net debt at start of period                                   (12,921)       (14,084)       (14,084)
Net debt at end of period                                     (35,207)       (15,391)       (12,921)






NOTES



1.      Segmental analysis

                                                             Half year ended 31 December

                   Group        Group          Profit/(loss) before        Profit/(loss) after
                   Turnover     Turnover       exceptional items           exceptional items

                   2002         2001           2002          2001          2002          2001
                   £000         £000           £000          £000          £000          £000
Construction       226,189      249,123        (1,994)       1,022         (3,467)       1,022
Housebuilding      71,650       62,556         10,525        7,864         10,525        7,864
Group              491          288            (1,381)       (1,282)       (1,906)       (1,282)
                   298,330      311,967        7,150         7,604         5,152         7,604
Less net interest payable                      (1,543)       (1,050)       (1,543)       (1,050)
                                               5,607         6,554         3,609         6,554



In addition to the above the turnover in joint ventures amounted to £Nil (2001:
£613,000) in construction and £1,560,000 (2001: £Nil) in housebuilding.

The profit/(loss) before and after exceptional items in respect of joint
ventures amounted to £Nil (2001: £45,000) in construction and £103,000 (2001:
£Nil) in housebuilding.



2.    Basis of preparation



The interim financial information has been prepared on the basis of the
accounting policies set out in Galliford Try plc's statutory financial
statements for the year ended 30 June 2002 and in accordance with applicable UK
accounting standards.  All the figures are consolidated and for both the six
months ended 31 December have been reviewed by the auditors.



The figures for the year ended 30 June 2002 have been extracted from the
financial statements of Galliford Try plc, on which the auditors gave an
unqualified audit report and which have been delivered to the Registrar of
Companies.  The foregoing financial information does not constitute statutory
financial statements.



3.    Exceptional items



The exceptional item relates to the costs of restructuring in the construction
division during the period.  These comprise termination costs of £698,000
together with the £1,300,000 estimated cost of withdrawing from certain of the
Group's maintenance and smaller building contract activities.



4.    Earnings per share



Basic earnings per share is calculated using the profit on ordinary activities
after tax and the weighted average number of ordinary shares in issue during the
period less the weighted average number of ordinary shares held by the Galliford
Try Employee Share Trust.  For diluted earnings per share, the weighted average
number of ordinary shares is adjusted to assume conversion of all dilutive
potential ordinary shares.



5.    Taxation



The tax charge for the period reflects the estimated effective rate for the full
year to 30 June 2003.



6     Interim dividend



The directors have declared an interim dividend of 0.5p per share (2001: 0.5p)
which will be paid on 10 April 2003 to shareholders on the register on 21 March
2003.




7.    Reconciliation of operating profit to cash flows

                                                          Half year        Half year        Year
                                                          ended            ended            ended
                                                          31 Dec           31 Dec           30 June
                                                          2002             2001             2002
                                                          £000             £000             £000

Operating profit after exceptional items                  5,049            7,559            19,747
Depreciation                                              764              750              1,552
Loss on disposal of tangible fixed assets                 -                2                23
Amortisation of own shares held                           (231)            63               125
Amounts written off investments                           -                50               -
Amortisation of goodwill                                  131              136              275
Increase in stocks                                        (13)             (293)            (21)
Increase in developments                                  (18,468)         (6,885)          (8,188)
Decrease/(increase) in debtors                            3,854            3,104            (8,305)
(Decrease)/increase in creditors                          (4,555)          3,251            11,143
                                                          (13,469)         7,737            16,351





8.     Analysis of changes in net debt


                                                          At 1 July       Cash            At 31 Dec
                                                          2002            flow            2002
                                                          £000            £000            £000

Cash at bank and in hand                                  1,757           1,502           3,259
Overdrafts                                                (8,338)         (884)           (9,222)
                                                          (6,581)         618             (5,963)
Loan notes                                                (5,093)         -               (5,093)
Bank loans                                                (1,218)         (22,933)        (24,151)
                                                          (12,892)        (22,315)        (35,207)
Finance lease obligations                                 (29)            29              -
                                                          (12,921)        (22,286)        (35,207)






INDEPENDENT REVIEW REPORT TO GALLIFORD TRY PLC



Introduction

We have been instructed by the company to review the financial information which
comprises the consolidated profit and loss account, consolidated balance sheet,
consolidated cash flow statement and the related notes numbered 1 to 8. We have
read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.



Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
the Listing Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.



Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2002.



PricewaterhouseCoopers
Chartered Accountants
London
25 February 2003



Distribution

Copies of the interim report will be distributed to all holders of the Company's
ordinary shares and will also be available at the Company's registered office:
Cowley Business Park, Cowley, Uxbridge, Middlesex UB8 2AL.  In additional this
report will be available on the Company's website: www.gallifordtry.co.uk




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