Galliford Try Holdings Plc · LSE:GFRD

Galliford Try — FY2016 Earnings Presentation

63 slides from Galliford Try's earnings presentation, Sep 14, 2016

  1. Slide 1: Full Year Results to 30 June 2016

    FULL YEAR RESULTS TO 30 JUNE 2016 14 September 2016 Peter Truscott, Chief Executive Graham Prothero, Finance Director Wilshere Park, Welwyn, Hertfordshire

  2. Slide 2: Peter Truscott, Chief Executive

    Peter Truscott CHIEF EXECUTIVE

  3. Slide 3: Agenda

    AGENDA Full year results to 30 June 2016  Highlights  Operating Review  Financial Review  Outlook  Appendices FY16 Results – Analyst Presentation, 14 September 2016

  4. Slide 4: Highlights

    HIGHLIGHTS Full year results to 30 June 2016 Alphabeta, central London Meldon Fields, Okehampton, Devon

  5. Slide 5: Group Highlights

    GROUP HIGHLIGHTS 5 Strong performance across the Group PBT up 18% EPS up 17% 150 150  Record full year profit before tax up 18% to £135.0m 100 100 £135.0m 132.5p  Return on net assets increased to 25.3% 50 £114.0m 50 112.8p  Full year dividend up 21% to 82p per share 0 0 FY151 FY16 FY151 FY16  M

  6. Slide 6: Linden Homes

    LINDEN HOMES Operating Review Oaklands, Horsham Waterside, South London

  7. Slide 7: Linden Homes Overview

    LINDEN HOMES 7 Operating Review Overview  Operating margin increased to 17.5% (FY15: 16.0%)  Revenue up 8% to £841m (FY15: £779m)  3,078 completions in the period, up 11% (FY15: 2,769) 22.7% £350k  Strong in-hand position of £510m, up 19% (FY15: £427m)  Efficiencies to generate annual cost savi

  8. Slide 8: Landbank analysis

    LINDEN HOMES 8 Operating Review Landbank analysis1 % 25 Gross margin of landbank £k ASP in landbank 400 20 300 15 22.6% 22.7% 200 10 21.8% £291k £310k £272k 100 5 0 0 FY14 FY15 FY16 FY14 FY15 FY16 £k Cost per plot % Plot cost as % of ASP 80 30 60 20 40 £73k £69k 24% 24% £61k 10 23% 20 0 0 1 As at 30

  9. Slide 9: Partnerships and Regeneration

    PARTNERSHIPS AND REGENERATION Operating Review Devons Road, East London Webster Place, Newton Abbot

  10. Slide 10: Partnerships and Regeneration Overview

    PARTNERSHIPS AND REGENERATION 10 Operating Review Overview  Margin improved to 3.9% (FY15: 2.9%)  New Bristol office opened in July 2016  Partnerships and Regeneration teams merged to enhance strategic and operational focus; executive strengthened Regional  Low capital requirements, with impress

  11. Slide 11: Units delivered

    PARTNERSHIPS AND REGENERATION 11 Operating Review Units delivered 1,800 2500 CAGR1: 61% 2,208 2,126 2000 1,720 1500 1,800 1,600 1,800 1000 1,500 7261,500 500 600 408 526 408 126 220 0 FY13 FY14 FY15 FY16 Contracting – equivalent units Private mixed-tenure units 1 Compound annual growth rate for mixe

  12. Slide 12: Construction

    CONSTRUCTION Operating Review Black Rock Specialist Queensferry Crossing, Firth of Forth Training Centre, Portishead

  13. Slide 13: Construction Overview

    CONSTRUCTION 13 Operating Review Overview  Continues to be profitable with a margin of 1.1%  Strong growth in revenue up 16% to £1.5bn (FY15: £1.3bn), with a cash position of £161m (FY15: £173m)  85% of work secured for 2016/17 (FY15: 90%); £3.5bn order book (FY15: £3.8bn)  Continue to prioritis

  14. Slide 14: Order book

    CONSTRUCTION 14 Operating Review Order book By client type Building 100% Education 12 10 Other Public and Regulated 28 19 £2.34bn Facilities Management 16 16 Commercial 75% 23 Health 19 Defence 50% 72 74 53 58 25% Infrastructure 0% Water Roads FY 13 FY 14 FY 15 FY 16 £1.16bn Rail Private Flood Allev

  15. Slide 15: Construction: Building

    CONSTRUCTION 15 Operating Review Building North East PSBP Schools Framework NGEC National Capital Works Framework Hub South East Scotland PPP ProCure21+ Framework North Wales Schools Framework Hub North Scotland PPP FY16 Results – Analyst Presentation, 14 September 2016

  16. Slide 16: Construction: Infrastructure

    CONSTRUCTION 16 Operating Review Infrastructure Flood Alleviation Scheme, Moray Urban Vision Partnership, Salford East Midlands Airport, Leicestershire Beckton Wastewater Moorfields Railway Station, Liverpool Treatment Smart Motorways Works, East Framework London South Devon Highway, Devon FY16 Resu

  17. Slide 17: Graham Prothero, Finance Director

    Graham Prothero FINANCE DIRECTOR

  18. Slide 18: Financial Review

    FINANCIAL REVIEW Full year results to 30 June 2016 Creechbarrow Great EasternRoad, Quays, Taunton, East London Somerset Protheroe House, North London

  19. Slide 19: Summary Income Statement

    FINANCIAL REVIEW 19 Full year results 30 June 2016 Summary Income Statement: Full Year to 30 June £m 2016 2015 % Revenue1 2,670.4 2,430.7 9.9 Profit from operations2 157.5 138.9 13.4 Profit before exceptional items3 135.0 117.7 14.7 and tax Profit before tax 135.0 114.0 18.4 Earnings per share: Pre-

  20. Slide 20: Segmental Analysis

    FINANCIAL REVIEW 20 Full year results 30 June 2016 Segmental Analysis: Full Year to 30 June 2016 Profit/(Loss) Operating £m Revenue1 from Operations2 Margin Linden Homes 840.8 147.2 17.5% Partnerships and Regeneration 300.6 11.7 3.9% Construction 1,503.4 15.8 1.1% PPP Investments 25.0 (1.4) NA Group

  21. Slide 21: Linden Homes

    FINANCIAL REVIEW 21 Full year results 30 June 2016 Linden Homes COMPS/REVENUE Revenue up 8% Linden Homes gross margin Units: 3,078 (FY15: 2,769) 25% 23.8 22.5 Revenue: £841m (FY15: £779m) 21.4 20% 19.8 6.3 6.3 6.5 SALES MIX (UNITS) Units up 11% 6.5 Private: 2,487 (FY15: 2,059) 15% Affordable: 591 (F

  22. Slide 22: Partnerships and Regeneration

    FINANCIAL REVIEW 22 Full year results 30 June 2016 Partnerships and Regeneration REVENUE down £28.8m Partnerships and Regeneration gross margin Contracting: £233.9m (FY15: £273.3m) 10% 9.3 8.6 Mixed-tenure: £ 66.7m (FY15: £ 56.1m) 7.6 8% 5.4 UNITS DELIVERED ASP up 4% 6.0 6% ASP: £166k (FY15: £160k)

  23. Slide 23: Construction

    FINANCIAL REVIEW 23 Full year results 30 June 2016 Construction REVENUE up £210.2m Construction gross margin 10% £1,503.4m (FY15: £1,293.2m) 8% CASH robust 6.8 6.1 £161.1m (FY15: £173m) 6% 5.8 4.9 ORDER BOOK1 high quality 4% 5.2 5.1 4.6 £3.5bn (FY15: £3.8bn) 3.8 2% WORK SECURED1 good visibility 1.6

  24. Slide 24: Group cash management

    FINANCIAL REVIEW 24 Full year results 30 June 2016 Group cash management  Strong focus on working capital management, particularly in light of increased macro- economic uncertainty  Average borrowings increased to £204m as anticipated; forecast continues within plan  Year end net debt of £8.7m, r

  25. Slide 25: Cash flow

    FINANCIAL REVIEW 25 Full year results 30 June 2016 Cash flow £m 125 124.9 (15.2) 75 (7.0) (25.3) 25 (59.3) -25 (9.5) (8.7) (17.3) -75 -125 Opening Cash from Working Interest Tax Dividend Other Closing net debt operating capital net debt 1 July 15 activities movements 30 June 16 FY16 Results – Analys

  26. Slide 26: Balance sheet highlights

    FINANCIAL REVIEW 26 Full year results 30 June 2016 Balance sheet highlights £m 2016 2015 Net asset value 600.0 569.2 Tangible net assets 447.8 412.8 Net (debt) (8.7) (17.3) Gearing % 1% 3% FY16 Results – Analyst Presentation, 14 September 2016

  27. Slide 27: Segmental balance sheet

    FINANCIAL REVIEW 27 Full year results 30 June 2016 Segmental balance sheet Linden Partnerships PPP Net assets £m Homes and Regen Construction Investments Central Total 30 June 2016 Goodwill & intangible 53.4 6.0 84.9 - 7.9 152.2 assets Working capital employed 601.7 38.0 (155.6) 15.4 (43.0) 456.5 Ne

  28. Slide 28: Investment in Linden Homes and Partnerships and Regeneration

    FINANCIAL REVIEW 28 Full year results 30 June 2016 Investment in Linden Homes and Partnerships and Regeneration £m 2016 20151 Amounts invested in joint ventures 198.0 180.2 Land 538.7 579.3 Work in progress 282.1 234.0 Total invested in housebuilding developments & JVs 1,018.8 993.5 Land creditors (

  29. Slide 29: Return on net assets

    FINANCIAL REVIEW 29 Full year results 30 June 2016 Return on net assets Group1 Linden Homes2 35% 35% 31.7 30% 30% 28.1 27.9 25.3 25% 23.3 25% 20.8 21.8 20% 20% 16.6 15% 15% 10% 10% 5% 5% 0% 0% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 1 Group RONA is calculated as pre-exceptional EBITA divided by aver

  30. Slide 30: Dividend

    Financial Review FINANCIAL REVIEW 30 Full year results 30 June 2016 Dividend Cover 1.9x 1.8x 1.7x 1.6x  Full year dividend up 21% and covered 1.6 Pence times 100 90  Proposing to increase dividend cover from 82p 80 FY18 70 68p 60 53p 56p 50 46p 40 37p 38p 30 25p 20 22p 26p 10 15p 12p 0 FY13 FY14 F

  31. Slide 31: Peter Truscott, Chief Executive

    Peter Truscott CHIEF EXECUTIVE

  32. Slide 32: Outlook

    OUTLOOK Full year results to 30 June 2016

  33. Slide 33: Linden Homes Outlook

    LINDEN HOMES 33 Outlook  Confidence from continuing availability of mortgage finance and Help-to-Buy  Sales since 1 July 2016 encouraging  Pricing holding up  Margin improvement strategy continues to progress  Land market remains positive  100% of land secured for FY17 and 85% for FY18  1,775

  34. Slide 34: Partnerships and Regeneration Outlook

    PARTNERSHIPS AND REGENERATION 34 Outlook  Strengthening markets as clients restore programmes following rent reforms  No discernible impact after EU referendum  Opportunities from increased commissioning from local authorities in joint venture model  Mixed-tenure opportunity will continue to acc

  35. Slide 35: Construction Outlook

    CONSTRUCTION 35 Outlook  Public and regulated sectors continue to invest, although demand in private sector has slowed  Good order book visibility with a focus on frameworks  Roads, education, health and defence sectors key drivers of growth  Finalisation of legacy contracts continues to restric

  36. Slide 36: Summary

    SUMMARY 36 Outlook  Continuing confidence in the outlook for all three businesses  Linden Homes’ sales encouraging  Housing associations remain financially robust, supporting growth in Partnerships and Regeneration  Construction has excellent order book visibility with a focus on frameworks and

  37. Slide 37: Appendices

    APPENDICES Full year results to 30 June 2016 Forbury Place, Reading Kings SouthHouse, Devon East London Highway

  38. Slide 38: Appendices contents

    APPENDICES 38 Full year results to 30 June 2016 1. Group 2.6 Strategic use of joint ventures (FY16 and FY15) 1.1 Cash flow summary 2.7 Landbank valuation 1.2 Net finance costs 2.8 Landbank analysis 1.3 Pension liability 2.9 Movement in landbank 1.4 Completed housing units (FY16 and FY15) 2.10 Foreca

  39. Slide 39: Cash Flow Summary

    APPENDICES 39 Full year results to 30 June 2016 1.1 Cash Flow Summary – Full Year to 30 June 2016 £m 2016 2015 Cash from operating activities 124.9 118.5 Working capital movements (15.2) (50.7) Net cash generated from operations 109.7 67.8 Interest, tax and dividends (91.6) (77.5) Acquisition (inclu

  40. Slide 40: Net Finance Costs

    APPENDICES 40 Full year results to 30 June 2016 1.2 Net Finance Costs – Full Year to 30 June 2016 £m 2016 2015 Net interest payable on borrowings (15.4) (12.2) Interest receivable from joint ventures 7.0 3.5 Unwind of discount on shared equity receivables - 0.8 Unwind of discount on payables (0.8) (

  41. Slide 41: Pension Liability

    APPENDICES 41 Full year results to 30 June 2016 1.3 Pension Liability 1 £m Defined benefit pension asset 1 July 2015 1.2 Net interest income 0.2 Return on plan assets, excluding interest income2 8.5 Experience losses (0.9) Actuarial losses2 (19.5) Employer contributions 6.6 Expenses (0.4) Defined be

  42. Slide 42: Completed housing units - FY16

    APPENDICES 42 Full year results to 30 June 2016 1.4 Completed housing units - FY16 Partnerships Partnerships Linden Homes Linden Homes and Regen and Regen TOTAL TOTAL net of net of net of Units Incl. JVs partner share Incl. JVs partner share Incl. JVs partner share Private 2,487 2,156 247 182 2,734

  43. Slide 43: Completed housing units - FY15

    APPENDICES 43 Full year results to 30 June 2016 1.4 Completed housing units - FY15 Partnerships Partnerships Linden Homes Linden Homes and Regen and Regen TOTAL TOTAL net of net of net of Units Incl. JVs partner share Incl. JVs partner share Incl. JVs partner share Private 2,059 1,945 188 146 2,247

  44. Slide 44: Forecast land creditors' payment profile

    APPENDICES 44 Full year results to 30 June 2016 1.5 Forecast land creditors’ payment profile £m 250 0.9 202.8 10.2 200 87.5 150 104.2 100 50 0 FY17 FY18 FY19 Beyond TOTAL FY16 Results – Analyst Presentation, 14 September 2016

  45. Slide 45: Land creditor restatement

    APPENDICES 45 Full year results to 30 June 2016 1.6 Land creditor restatement  Policy updated to recognise land and land creditors on unconditional exchange of contract or once land acquisition has completed, rather than at exchange of conditional contract As restated As previously stated Variance

  46. Slide 46: Linden Homes revenue analysis, regional

    APPENDICES 46 Full year results to 30 June 2016 2.1 Linden Homes – revenue analysis, regional at 30 June 2016 TOTAL Units 3,078 Revenue £840.8m NORTH/ MIDLANDS/ EAST Units 972 (31.6%) Revenue £217.2m (25.8%) SOUTH WEST Units 1,049 (34.1%) Revenue £218.8m (26.0%) SOUTH EAST Units 1,057 (34.3%) Revenu

  47. Slide 47: Sales reserved, contracted and completed

    APPENDICES 47 Full year results to 30 June 2016 2.2 Linden Homes – analysis of sales reserved, contracted, and completed £m Sept 16 June 16 Sept 15 Private 365 243 323 Affordable 145 137 104 TOTAL 510 380 427 For completion in FY17 412 297 310 For completion post FY17 98 83 117 TOTAL 510 380 427 Uni

  48. Slide 48: Sales, completions by buyer type

    APPENDICES 48 Full year results to 30 June 2016 2.3 Linden Homes – sales, completions by buyer type FY 16 FY 15 10% 12% Private 7% 8% Affordable Private with Part Exchange 19% 54% 64% Private - Investor 26% Based on 3,078 completions (FY15: 2,769) FY16 Results – Analyst Presentation, 14 September 20

  49. Slide 49: Linden Homes trading overview

    APPENDICES 49 Full year results to 30 June 2016 2.4 Linden Homes – trading overview FY16 FY15 Revenue (£m) 841 779 Land cost 26.8% 27.0% Build cost 49.4% 50.5% Gross margin 23.8% 22.5% Overheads 6.3% 6.5% Operating margin 17.5% 16.0% FY16 Results – Analyst Presentation, 14 September 2016

  50. Slide 50: Private sales, analysis of incentives

    APPENDICES 50 Full year results to 30 June 2016 2.5 Linden Homes – private sales, analysis of incentives on reservations Proportion of units FY16 FY15 No incentives 40% 36% Incentives Part exchange 8% 11% Assisted move 3% 3% Help to Buy 38% 28% Investor sales 11% 22% TOTAL 100% 100% FY16 Results – A

  51. Slide 51: Strategic use of joint ventures - FY16

    APPENDICES 51 Full year results to 30 June 2016 2.6 Linden Homes – strategic use of joint ventures - FY16 FY16 Revenue Completions (Units) (Linden Homes only) ASP3 Net of Gross JV partner £m £000 Direct - private 1,824 1,824 578 317 - affordable 481 481 52 109 Other income, including land sales 49 -

  52. Slide 52: Strategic use of joint ventures - FY15

    APPENDICES 52 Full year results to 30 June 2016 2.6 Linden Homes – strategic use of joint ventures - FY15 FY15 Revenue Completions (Units) (Linden Homes only) ASP3 Net of Gross JV partner £m £000 Direct - private 1,827 1,827 594 325 - affordable 523 523 59 113 Other income, including land sales - -

  53. Slide 53: Landbank valuation

    APPENDICES 53 Full year results to 30 June 2016 2.7 Linden Homes - landbank valuation1 June 2016 June 2015 June 2014 North/ North/ North/ South South Midlands South South Midlands South South Midlands Cost per plot £000 East West / East East West / East East West / East Opening landbank 114 44 54 10

  54. Slide 54: Landbank analysis

    APPENDICES 54 Full year results to 30 June 2016 2.8 Landbank analysis1 By business By sector Product mix2 Product mix2 20% 21% 19% 32% 80% 79% 81% 68% Linden Homes 11,700 Private 11,500 Houses 7,650 Houses 1,400 Partnerships 2,800 Affordable 3,000 Apartments 1,800 Apartments 650 14,500 14,500 9,450

  55. Slide 55: Movement in landbank

    FINANCIAL REVIEW 55 Full year results 30 June 2016 2.9 Linden Homes: movement in landbank Total Landbank Owned Controlled At 30 June 2015 13,550 9,863 3,687 Legal completions (2,691) (2,691) - Land acquired 2,166 1,563 603 Land sales and transfers into JV (865) (865) - Transfers - 1,912 (1,912) Abor

  56. Slide 56: Forecast outlets and revenue

    APPENDICES 56 Full year results to 30 June 2016 2.10 Linden Homes: forecast outlets and revenue Number of sales outlets1 Revenue by period % 120 100% 15 95 35 86 90 90 81 75% 73 100 100 100 60 50% 85 65 30 25% 0 0% Jan Jan Jan Jan Jan FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Not yet acquire

  57. Slide 57: London locations

    APPENDICES 57 Full year results to 30 June 2016 2.11 London locations ELMBANK, BARNET MILLBROOK PARK ALLEN COURT ST. CLEMENTS KING EDWARD RD SILVERTOWN WAY, CANNING TOWN GOLDHAWK RD KING ST GRANGE WALK BATTERSEA BRIDGE ROAD YORK RD (LOOKERS) GALLIONS REACH NEWHAM NEARLY COMPLETE EARLSFIELD SUMMERS T

  58. Slide 58: Partnerships and Regeneration business model

    APPENDICES 58 Full year results to 30 June 2016 3.1 Partnerships and Regeneration – business model  Contractor/developer hybrid and partnering ethos perfectly aligned to market  Attractive financial characteristics with strong blended margin and returns  Good margin and strong cash generation in

  59. Slide 59: History of UK housing completions

    APPENDICES 59 Full year results to 30 June 2016 3.2 History of UK housing completions Units k 450 400 350 300 250 200 150 100 50 0 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015* Public Housing Associations Private Source: ONS FY16

  60. Slide 60: Construction segmental analysis

    APPENDICES 60 Full year results to 30 June 2016 4.1 Construction – segmental analysis June 2016 £m Profit Revenue1 from Operations Margin Building 1,013.8 9.0 0.9% Infrastructure 489.6 6.8 1.4% TOTAL 1,503.4 15.8 1.1% December 2015 Profit £m Revenue1 from Operations Margin Building 906.9 8.0 0.9% In

  61. Slide 61: Construction order book

    APPENDICES 61 Full year results to 30 June 2016 4.2 Construction - order book Building Infrastructure £m £m Education 760 Water 523 Other Public and Regulated 687 Roads 337 Facilities Management 448 Rail 142 Commercial 212 Flood Alleviation 99 Health 147 Other Civil Engineering 49 Defence 96 FY16 Re

  62. Slide 62: Disclaimer

    DISCLAIMER 62 This presentation is being made only to and is directed in the Company or any member of its group or any at persons who have professional experience in commitment whatsoever. This presentation does not matters relating to investments falling within Article purport to contain all the in

  63. Slide 63: Full Year Results to 30 June 2016

    FULL YEAR RESULTS TO 30 JUNE 2016 14 September 2016 Peter Truscott, Chief Executive Graham Prothero, Finance Director Wilshere Park, Welwyn, Hertfordshire FY16 Results – Analyst Presentation, 14 September 2016

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