Galliford Try Beats Expectations, Returns to Profitability and the Dividend List
(GFRD ) has released its Full Year Result to 30 June 2021 reporting a strong operational performance with profitability ahead of expectations with a final dividend of 3.5p.
Financial Highlights
Revenue for the period increased to £1.25bn (FY20: £1.09bn) divisional margin improving to 2%, resulting in Profit Before Tax of £11.4m versus a loss of £59.7m, before exceptional items, for FY20.
Cash generation was also strong during the period with the debt free Balance Sheet posting average month end cash of £164m for the period(FY20: £141m).
With a positive outlook supported by a high quality order book of £3.3bn, similar to last year, the Board has recommended a final dividend of 3.5 making a total dividend for the year of 4.7p covered by earnings 2x.
Bill Hocking, Chief Executive, commented: “I am very proud of the progress the Group has made over the last year. We have dealt with challenging circumstances and continue to successfully manage the current market conditions. Our commitment to robust risk management, careful contract selection and operational excellence underpins our performance and prospects.
Outlook
The Company has clearly maintained its disciplined approach to bidding on new contracts and expects to continue to improve operating margins into FY22 and beyond.
This disciplined approach has obviously stood the Company in good stead during the recent period of materials shortages without any material impact on trading.
Over the medium-term, the pipeline of new opportunities across its chosen sectors in the public, regulated and private markets are ‘encouraging’.
Bill added; “The Group has an excellent order book …..strongly positioned to meet the increasing demand for social and economic infrastructure in the UK and deliver growth. Our secure foundation provides the basis for our Sustainable Growth Strategy, which aligns our financial objectives with our sustainability aspirations to deliver sustainable profitable growth. The outlook is positive for the sector and the management team and Board look forward to the new financial year with confidence.”
View From Vox
Galliford has executed its strategic plan to operate in a sustainable and responsible way to reward shareholders over the longer term perfectly with the shares more than doubling during the period.
The return to revenue growth, profitability and the dividend list were undoubtedly the three key financial KPIs for investors but credit should also be given to the fact the Company did not require any financial assistance of the UK Governments COVID-19 support and has repaid all furlough monies since July 2020.
Looking forward, there were no exceptional items during the period providing a clear lens through which to analyse and evaluate underlying value in the business and given the Company has no debt or defined benefit pension obligations, investors would do well to start with the balance sheet given the £216m of cash as of the end of the period.
Despite the shares having doubled of the past 12 months, there is clear evidence these shares should go higher with the improving financial position, high quality order book and the positive macro trends as the UK Government’s plans to increase capital expenditure for infrastructure.
Reasons to GFRD
Galliford Try is a leading UK construction group listed on the London Stock Exchange.
Operating as Galliford Try and Morrison Construction, the group carries out building and infrastructure projects with clients in the public, private and regulated sectors in the UK.
Strategy for Sustainable and Profitable Growth
The Group is well capitalised with no debt, no pension liability, a portfolio of high-quality PPP assets, a strong order book and is expecting to be profitable this year and reinstating its Dividend at the Half Year stage.
Risk Management at Its Core
Galliford Try is laser focused on robust risk management and concentrating on growth sectors where the Company has a highly differentiated offering with a high value proposition for its clients.
High Visibility on Future Earnings
Galliford Try has signed a number of high-value longstanding contracts with exposure to long-term Government funded Infrastructure projects as part of its economic recovery plan.
The leading UK construction platform, combined with the Company’s strong client relationships, provides the Board with confidence in the future performance of the business.
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