Interim Results - Pre-tax Profit Up 89%
Galliford PLC
29 February 2000
Excellent Interim Results from Galliford
- earnings up 96%
- Operating profit £2.5million up 64%
- Pre-tax profit £2.1million up 89%
- Earnings per share 1.35p up 96%
- Construction order book at all time high
- £80 million PPP multiple schools contract won - the
largest in England
- Heads of agreement signed with operator for Northampton
RTI
- Housing completions increased by 22%
'We anticipate a buoyant Spring housing market and so
long as no adverse legislation is announced in the
Budget, our housing will maintain its growth pattern.
Our construction order book is at a record level and we
look forward with confidence to steadily improving
margins.'
Tony Palmer, Chairman
FULL STATEMENT ATTACHED
Enquiries:
George Marsh, Managing Director
John Livingston, Financial Director
Galliford plc
Tel: 01455-222722
www.galliford.co.uk
Galliford plc
Interim Results
six months ended 31 December 1999
STATEMENT BY THE CHAIRMAN, TONY PALMER
I am delighted to be able to report in my first announcement
to shareholders that excellent progress continues to be made.
Operating profit for the six months to 31 December 1999
increased by 64% to £2.5m and pre-tax profit by 89% to £2.1m.
Earnings per share increased by 96% to 1.35p.
Dividend
Whilst these results show an excellent increase in profits, we
are declaring an unchanged interim dividend of 0.5p per share
and any increase for the full year, which may be proposed,
will be applied, as last year, to the final dividend.
Private housing
Operating profit increased by 55% to £2.0m on turnover which
increased by 51% to £20.8m.
The areas in which we operate are the Eastern Counties and the
South West, which continue to show a steady demand for housing
although they have not generally shown the rapid house price
inflation reported in certain areas of London and the South
East.
Completions rose by 22% to 232 units at an average selling
price of £90,134.
Construction
Operating profits increased by 70% to £1.2m on turnover which
increased by 8% to £101.5m. The resultant margins of 1.2%
(1998: 0.8%) are still short of our declared aim of obtaining
maintainable margins in excess of 2% although great strides
have been made towards achieving this. The following
milestones will assist in progressing towards this objective:
- Our order book is at an all time high of £200M and over
70% of this has been secured through partnerships and
other value criteria. The skills utilised in servicing
these markets enable us to provide a complete solution to
a client's construction requirements at a lower all in
cost whilst enabling the company to achieve superior
returns.
- We announced on 17 February that we had been awarded the
largest multiple school building programme in England
under the Private Public Partnership procedures. This
contract, worth £80m, consists of a building programme
for £37m and will be completed by May 2002. Our
Facilities Management Division will then be responsible
for the operation of the premises-related services over
the 30-year term of the project. We are confident that
the experience gained during these negotiations will
enable further PPP projects to be obtained.
- Our joint venture (RTI) promotion of guided bus projects
continues to advance. Although the necessity for a
public enquiry into the first two legs at Northampton
will delay the start of construction until next year, we
are delighted to be able to announce that Heads of
Agreement have been signed with an operator who will
acquire a 50% share in the company formed to develop the
Northampton project. The operator will run the guided
buses and has also agreed to share costs on initial
studies for other cities.
- Two of the areas in which we expect increased
construction activity are the areas of Water and Social
Housing. I am pleased to announce that Galliford
Northern has been chosen as a potential partner by Hyder
for the next phase of capital works in Wales. Galliford
Hodgson and Midas, as leading providers of social
housing, have secured partnering relationships with
Kingsmead Homes, Toynbee Housing Association and Devon &
Cornwall Housing Association.
Systems
As expected, our preparation for Year 2000 enabled us to
operate normally through the Millennium changeover.
After a substantial business process re-engineering study we
have recently placed orders for new systems which will allow
management information and contracts documentation to be
accessed by sites and offices using web based technology.
This will increase efficiency, reduce costs and provide the
platform to enable the group to communicate electronically
with clients and suppliers and to take advantage of e-business
opportunities as they develop.
Finance
Our net debt of £6.9m at 31 December 1999 represented a
gearing level of 31% (1998: 26%). The net interest
of £0.4m was covered 6.4 times by operating profit.
Prospects
Our strategy continues to be based on developing leading local
brands in housing and on being a recognised leader in defined
sectors of the construction market.
We anticipate a buoyant Spring housing market and so long as
no adverse legislation is announced in the Budget, our housing
will maintain its growth pattern. Our construction order book
is at a record level and we look forward with confidence to
steadily improving margins.
Galliford plc
Interim Results
six months ended 31 December 1999
Analysis of Trading Results
6 months ended 6 months ended Year ended
31 December 31 December 30 June 1999
1999 1998
Turnover Profit Turnover Profit Turnover Profit
£'000 £'000 £'000 £'000 £'000 £'000
Private housing 20,768 1,980 13,799 1,279 41,866 4,756
Construction 101,532 1,223 93,957 718 183,910 1,848
Group (726) (490) (1,161)
122,300 2,477 107,756 1,507 225,776 5,443
Net interest (390) (406) (901)
122,300 2,087 107,756 1,101 225,776 4,542
Note: Comparative trading results for the six months ended
31 December 1998 have been restated in accordance with the revised
disclosures adopted for the year ended 0 June 1999, with group costs
now shown separately. Group costs include the group's share of
costs relating to the RTI project.
Galliford plc
Interim Results
six months ended 31 December 1999
Consolidated Profit and Loss Account
6 months 6 months Year ended
ended ended 30 June 1999
31 December 31 December
1999 1998
£'000 £'000 £'000
Turnover - continuing 122,300 107,792 225,812
operations
Less: share of joint - 36 36
ventures' turnover
Group turnover 122,300 107,756 225,776
Operating costs 119,732 106,249 220,289
Group operating profit
- continuing operations 2,568 1,507 5,487
Share of operating losses (91) - (44)
of joint ventures
2,477 1,507 5,443
Interest receivable 127 36 67
Profit before interest 2,604 1,543 5,510
payable
Interest payable 517 442 968
Profit on ordinary activities 2,087 1,101 4,542
before taxation
Tax on profit on ordinary 626 341 1,417
activities
Profit on ordinary activities 1,461 760 3,125
after taxation
attributable to members of
Galliford plc
Dividends 550 550 1,320
Transferred to reserves 911 210 1,805
Earnings per share 1.35p 0.69p 2.88p
Diluted earnings per share 1.34p 0.69p 2.88p
Dividend per share 0.5p 0.5p 1.2p
Galliford plc
Interim Results
six months ended 31 December 1999
Consolidated Balance Sheet
31 December 1999 31 December 1998 30 June 1999
£'000 £'000 £'000 £'000 £'000 £'000
Fixed assets
Tangible assets 4,258 4,031 3,966
Investments
Investments in joint
ventures
Goodwill 285 - 293
Share of gross assets 1,142 253 794
Share of gross (1,338) (195) (896)
liabilities
Loan to joint ventur 1,900 - 850
1,989 58 1,041
Other investments 263 392 303
2,252 450 1,344
6,510 4,481 5,310
Current assets
Stocks 34,820 28,223 28,421
Development land 21,606 20,093 23,097
Debtors 41,136 33,605 37,202
Cash at bank and in hand 2,595 751 1,528
100,157 82,672 90,248
Current liabilities
Creditors: amounts
falling due within
one year
Bank overdraft 8,283 3,981 2,934
Bank loans 76 736 383
Other 68,540 54,564 63,805
Net current assets 23,258 23,391 23,126
Total assets less
current liabilities 29,768 27,872 28,436
Creditors: amounts 5,305 6,524 5,097
falling due after
more than one year
Provisions for 1,897 1,069 1,684
liabilities and charges
7,202 7,593 6,781
22,566 20,279 21,655
Capital and reserves
Called up share capital 5,498 5,498 5,498
Share premium account 477 477 477
Revaluation reserve 167 171 167
Other reserves 35 35 35
Profit and loss account 16,389 14,098 15,478
Shareholders' funds 22,566 20,279 21,655
Galliford plc
Interim Results
six months ended 31 December 1999
Consolidated Cash Flow Statement
6 months ended 6 months ended Year ended
31 December 1999 31 December 1998 30 June 1999
£'000 £'000 £'000 £'000 £'000 £'000
Net cash (outflow)/inflow (1,002) (2,799) 1,850
from continuing operating
activities (see note 7)
Dividends from joint 4 - 50
ventures
Returns on investments
and servicing of finance
Interest received 127 36 67
Interest paid (483) (398) (872)
Loan note interest paid (33) (48) (90)
Interest element of
finance lease
rental payments (1) (8) (16)
Net cash outflow from
returns on investments
and servicing of finance (390) (418) (911)
Taxation paid (35) (144) (567)
Capital expenditure and
financial investment
Purchase of tangible fixed (712) (426) (998)
assets
Sale of tangible fixed 25 12 328
assets
Increase in investment in (1,050) - (526)
joint venture
Purchase of own shares - (77) (217)
Net cash outflow for
capital (1,737) (491) (1,413)
expenditure and financial
investment
Equity dividends paid (770) (660) (1,210)
Cash outflow before (3,930) (4,512) (2,201)
financing
Financing
Capital element of finance
lease (19) (65) (135)
rental payments
Repayment of bank loans (307) (5,909) (6,262)
Redemption of loan notes (26) (108) (172)
(352) (6,082) (6,569)
Decrease in cash (4,282) (10,594) (8,770)
Galliford plc
Interim Results
six months ended 31 December 1999
Notes
1 The interim statement was approved by the board of directors on
29 February 2000.
2 The figures for the six months ended 31 December 1999 and 1998
have not been audited or reviewed. These figures have been
prepared in accordance with the same accounting policies used in
the financial statements for the year ended 30 June 1999.
3 The results for the year ended 30 June 1999 are an abridged
version of the statutory accounts for that period on which the
auditors gave an unqualified report and which have been filed
with the Registrar of Companies.
4 A statement of total recognised gains and losses has not been
provided as there were no recognised gains or losses other than
those shown in the profit and loss accounts for each period.
The reported profit for each period is not materially different
from the profit on an unmodified historical cost basis.
5 Basic earnings per share is calculated using the profit on
ordinary activities after taxation and the weighted average
number of ordinary shares in issue during the period less the
weighted average number of shares held by the Galliford Employee
Share Trust. For diluted earnings per share, the basic weighted
average number of shares is adjusted to assume conversion of all
potential dilutive ordinary shares. The company has only one
category of potential dilutive ordinary shares - those share
options granted to employees where the exercise price is less
than the average market price of the company's shares during the
period.
6 The interim dividend of 0.5p per share will be paid on 4 April
2000 to shareholders on the register at 10 March 2000.
7 Notes to the cash flow statement
6 months 6 months Year ended
ended ended 30 June 1999
31 December 31 December
1999 1998
£'000 £'000 £'000
Reconciliation of operating
profit to cash flows
Operating profit 2,568 1,507 5,487
Depreciation 393 387 814
Loss/(profit) on disposal of 2 (6) (112)
tangible fixed assets
Amortisation of own shares 40 16 45
held
Amortisation of goodwill 8 - 2
Increase in stocks (6,399) (3,373) (3,571)
Decrease/(increase) in 1,491 (1,718) (4,722)
development land
(Increase)/decrease in (3,934) 1,365 (2,582)
debtors
Increase/(decrease) in 9,314 (1,216) 2,612
creditors
(Decrease)/increase in
development land creditors (4,485) 239 3,877
(1,002) (2,799) 1,850
Notes (continued)
8 Analysis of net debt
At 31
At 1 July December
1999 Cash flow 1999
£'000 £'000 £'000
Net bank overdraft (1,406) (4,282) (5,688)
Loan notes (1,102) 26 (1,076)
Bank loans (383) 307 (76)
(2,891) (3,949) (6,840)
Finance lease obligations (113) 19 (94)
Net debt (3,004) (3,930) (6,934)
9 Reconciliation of net cash flow to movement in net debt
6 months 6 months Year ended
ended ended 30 June 1999
31 December 31 December
1999 1998
£'000 £'000 £'000
Decrease in cash in period (4,282) (10,594) (8,770)
Cash used to repay debt and 352 6,082 6,569
lease financing
Change in net debt resulting (3,930) (4,512) (2,201)
from cash flows
Inception of finance lease - (112) (112)
contracts
Movement in net debt in the (3,930) (4,624) (2,313)
period
Net debt at start of period (3,004) (691) (691)
Net debt at end of period (6,934) (5,315) (3,004)
10 Copies of the interim statement are being sent to shareholders
on 10 March 2000 and further copies are available from the
registered office of Galliford plc, Wolvey, Hinckley,
Leicestershire LE10 3JH.
Latest directors dealings
- 1 day ago Savannah Energy
- 1 day ago Buccaneer Energy PLC
- 1 day ago Savannah Energy
- 1 day ago Carclo
- 1 day ago Schroder Japan Growth Fund