Galliford Try Holdings Plc · LSE:GFRD
Galliford Try — HY24 Earnings Presentation
34 slides from Galliford Try's earnings presentation, Mar 6, 2024
Slide 1: Strong momentum, continuing growth
Strong momentum Continuing growth Half year results to 31 December 2023 6 March 2024
Slide 2: Agenda
Agenda Bill Half year results to 31 December 2023 Hocking Highlights Chief Executive Financial review Operational progress Q&A 2 Grantham Southern Relief Road
Slide 3: Delivering on our strategic plan
Delivering on our £819m 2.5% Revenue Divisional operating strategic plan (HY23: £679m) UP 21% margin (HY23: 2.3%) UP 0.2 PPT A strong foundation Embedded culture of risk management. £15.6m 13.2p Profit before tax1 Earnings per share1 All businesses performing well; supported by our (HY23: £11.7m
Slide 4: Positive earnings momentum
Positive earnings momentum Consistent and profitable growth Revenue Profit before tax1 Earnings per share1 Dividend per share 1,394 23.4 18.9 10.5 1,237 16.0 1,125 19.1 8.0 £m £m p p 11.4 9.5 4.7 15.6 13.2 819 594 679 11.7 8.8 542 5.9 4.0 7.1 3.0 4.1 3.4 2.2 1.2 FY21 FY22 FY23 HY24 FY21 FY22 FY23 HY
Slide 5: Financial review
Financial Andrew review Duxbury Group Finance Director Greenhead College, Huddersfield 5
Slide 6: A compelling investment case
A compelling investment case High-quality business operating in robust markets generating growing returns Robust market Rigorous risk A progressive Strong financial opportunity management culture position Excellent position in chosen Embedded culture of Attract, retain and develop Track record of fi
Slide 7: Strong performance
Strong HY24 HY23 Var performance Revenue £819m £679m +20.6% Operating profit before Controlled revenue growth across both £14.1m £10.8m +30.6% amortisation1 (£m) divisions. Improved operating margins in both divisions driving strong increase in profit. Profit before tax1 (£m) £15.6m £11.7m +33.3
Slide 8: Segmental analysis
Segmental analysis £m Revenue HY24 819.1 HY23 679.2 Var 20.6% Building 446.0 399.7 11.6% Infrastructure 362.0 276.6 30.9% Investments 11.1 2.9 282.8% Revenue growth in each division. • Building benefiting from new contract awards through 2023. HY24 HY23 Var • Infrastructure growth driven by water
Slide 9: Increasing operating profit
Increasing operating profit 25.0 Operating profit bridge 20.0 15.0 2.8 14.1 10.8 1.1 3.0 10.0 7.2 5.0 (3.6) 0.0 HY23 HY23 JV HY23 excluding Volume Operating margin Central/Investments HY24 disposal JV disposal Stated before amortisation and exceptional items 9
Slide 10: Strong balance sheet
Strong Balance sheet £m 31 Dec 2023 30 June 2023 balance sheet Intangible assets & goodwill 98.8 98.3 PPP & other investments 43.5 44.6 Other non-current assets 61.9 61.3 Well-capitalised. Working capital (270.4) (268.5) Continued balance sheet strength driven by net cash and PPP assets. IFRS 16
Slide 11: Robust cash performance
Robust cash performance Average month-end cash £150m 280 260 97% 23 3 1 240 (8) (3) 220 220 209 of invoices paid in 60 days, (25) (2) £m 200 exceeding PPC requirement 180 of 95% 160 140 120 24 average days to pay Opening net Cash from Working Interest IFRS 16 Exceptional Dividend & Other Closing net
Slide 12: How we allocate capital
How we allocate capital Prioritising a strong balance sheet Strong balance sheet Reinvest in the Sustainable Return to support operations business dividend policy excess cash Competitive advantage. Enables strategic and Dividend will increase with Consider cash requirements for Gives confi
Slide 13: Summary
Summary 4.0p Interim dividend UP 33% (HY23: 3.0p) Excellent first half year, building on the robust foundations of the business. Ordinary dividends £11.1m over three years Interim dividend increased. £8.8m Confident in FY24 outlook, supported by high-quality order £5.2m £25.1m book and strong
Slide 14: Sustainable Growth
Sustainable Growth Secure outlook with high-quality and focused order book. Bill Hocking, Chief Executive Stroud sewerage replacement scheme 14
Slide 15: People
Our High-quality engine for order book and good Sustainable visibility of pipeline Growth Strong culture of Consistent, People discipline predictable and risk performance awareness Strong balance sheet 15
Slide 16: Environment (including Water)
Environment (including Water). 16
Slide 17: Focused risk management
Focused risk management Assessing and managing risks and uncertainties is the central element of our process and business strategy Board approval required for Robust review and approval all bids with specific risk Technical, commercial and Contract selection pre-contract factors or with a value of o
Slide 18: Drivers of operational improvement
Drivers of operational improvement Embedded in our strategy Environment: carbon | biodiversity | resources reduction in Scope 1 and Net zero by 2030 within 69% 2 carbon emissions since 2012* 89% of our company car fleet is electric/plug-in hybrid 94.5% Waste diverted from landfill 2030 our operation
Slide 19: Drivers of margin improvement
Drivers of margin improvement Robust risk management and selective approach to pursuing contracts. Increasing capabilities in higher-margin adjacent markets. Retain high-quality supply chain. Focus on quality, right first-time principles, reducing time and cost of rework. Digital tools and processes
Slide 20: Off-site manufacturing
Off-site manufacturing An example from the Custodial sector Supporting our Sustainable Growth Strategy Faster delivery. Increased programme certainty – eg weather, site conditions. Reduction in on-site labour. Reduction in health and safety risk. Better quality control and lower risk of de
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Slide 22: Quality-based work-winning
Quality-based work-winning Order book procurement route Indicative scoring criteria Management 20% 1.5% 20% Project delivery 19% 29.5% Health, Safety and Environment 6% 60.5% Quality 9% 8.5% 80% Sustainability and carbon 8% Social value 8% Single-stage Two-stage Scoring criteria Negotiated Target/co
Slide 23: Drivers of revenue growth
Drivers of revenue growth Ageing social and economic infrastructure. Growing population. Climate change. Leading position in frameworks and sectors. Acquisitions. Maturing procurement and sector attitudes 23
Slide 24: High-quality £3.7bn order book
High-quality £3.7bn order book Order book by client type 88% £519m Repeat clients for HY24 £593m £3.7bn £3.7bn 98% £562m £79m £2.2bn £1.5bn £3.4bn 13% 13% £894m 9% £335m Work secured for FY24 83% £696m Building Infrastructure 87% 87% Work secured for FY25 91% order book order book Education Environm
Slide 25: Confident outlook
Confident Positive earnings momentum outlook 2021 2022 2023 2024 2025 2026 2030 Revenue Secure outlook with £3.7bn high-quality and focused order book. £1.1bn £1.4bn £1.6bn Excellent visibility over future revenue with 98% and 83% of projected FY24 Divisional margin and FY25 revenue secured. S
Slide 26: Questions
Questions Bill Hocking Chief Executive Andrew Duxbury Group Finance Director 26
Slide 27: Appendices
Appendices 1. A platform for sustainable growth 2. Sustainable Growth Strategy 3. Why we target frameworks 4. Forward order book 5. Contract types 6. PPP Investments valuation 27
Slide 28: A platform for sustainable growth
Appendices 1. A platform for sustainable growth 2016-2020 2020-2021 2021-2026 RETAIN, TRANSITIONAL SUSTAINABLE IMPROVE, YEAR GROWTH DELIVER STRATEGY Focus on culture and Establishing GT as a Controlled margin embedding best leading standalone and revenue practices. construction group. growth. 28
Slide 29: Sustainable Growth Strategy
Appendices 2. Sustainable Growth Strategy Highways. Environment (including Water). 29
Slide 30: Why we target frameworks
Appendices 3. Why we target frameworks Improved risk and favourable outcomes Improved risk allocation: • Established and well-understood terms and 81% Work in frameworks conditions. • Long-term client relationships. • Predictable behaviours. • Certainty in tendering and typically reduced cost of t
Slide 31: Forward order book
Appendices Forward order book distribution – Building (excluding FM) 45 4. Forward order 40 book 35 Number of contracts 30 <£20m average contract 25 size. 20 15 10 5 0 Contract size 31
Slide 32: Contract types
Appendices 5. Contract types Where an overall target contract value is agreed with the client, including margin, risk and inflation contingencies, and the actual cost Target cost/cost of the work plus agreed fee is paid by the client. Any cost savings or reimbursable overspends against the target ar
Slide 33: PPP Investments valuation
Appendices PPP Investments valuation 6. PPP Investments 55 valuation 50 £45.1m £43.5m Valuation £m 45 £41.9m 40 35 30 6.80% 7.30% 7.80% Discount rate % 33
Slide 34: Disclaimer
Disclaimer This document contains statements that are, or may be deemed to be, implied in any forward-looking statements in this document will actually “forward-looking statements” which are prospective in nature. These occur. You are cautioned not to place undue reliance on these forward- forward-l