Galliford Try Holdings Plc · LSE:GFRD
Galliford Try — FY2023 Earnings Presentation
37 slides from Galliford Try's earnings presentation, Sep 20, 2023
Slide 1: Sustainable Growth
Sustainable Growth Full year results to 30 June 2023 20 September 2023 A flagship carbon neutral R&D facility for the National Manufacturing Institute Scotland
Slide 2: Agenda
Agenda Bill Full year results to 30 June 2023 Hocking Highlights Chief Executive Financial review Sustainable Growth Q&A Best Graduate Employer in Construction/Civil Engineering 2023 2
Slide 3: Strong performance; confident outlook
Strong performance; £23.4m UP Pre-exceptional profit 23% confident outlook before tax1 (FY22: £19.1m) Strong progress across Sustainable Growth Strategy Strong performance across all operations despite backdrop of macroeconomic challenges during the year. 10.5p UP Dividend per share 31% Acquisit
Slide 4: Financial review
Financial Andrew review Duxbury “This is a great example of how a Group Finance Director large-scale construction project should work and the outcome is absolutely tremendous." Lawrence Fitzpatrick, Council Leader, West Lothian Council Winchburgh Schools Campus 4
Slide 5: A compelling investment case
A compelling investment case High-quality business operating in robust markets generating growing returns Robust market Rigorous risk A progressive culture Strong financial position opportunity management Excellent position in chosen Embedded culture of assessing People-orientated business –
Slide 6: Positive earnings momentum
Positive earnings momentum Consistent and profitable growth since 2020 demerger Revenue Pre-exceptional profit Pre-exceptional earnings Dividend per share up 24% before tax1 up 105% per share1 up 99% up 123% £1,394m £23.4m 18.9p 10.5p £1,237m £1,125m £19.1m 16.0p 8.0p £11.4m 9.5p 4.7p FY21 FY22 FY23
Slide 7: Strong operational performance
FY23 FY22 Var Revenue (£m) 1,393.7 1,237.2 +12.6% Strong Pre-exceptional operating operational profit before amortisation1 21.9 18.5 +18.4% (£m) performance Pre-exceptional profit before 23.4 19.1 +22.5% tax1 (£m) Pre-exceptional earnings per 18.9 16.0 +18.1% share1 (p) Controlled revenue growth a
Slide 8: Segmental analysis
Segmental analysis Revenue (£m) FY23 1,393.7 FY22 1,237.2 +12.6% Var Building 797.1 789.1 +1.0% Infrastructure 590.8 441.9 +33.7% Revenue growth across all business segments. PPP Investments 5.8 6.2 (6.5)% • Building - new contract starts now normalising. • Infrastructure revenue growth of 34% dri
Slide 9: Increasing operating profit
Increasing operating profit Operating profit bridge Margin improvement, before cost of living payment and acquisitions, provides 3.0 confidence for the future. 21.9 Reflection of quality in order (3.4) book. Focus on efficient contract delivery. 1 Pre-exceptional items and FY23 stated before o
Slide 10: Managing the macroeconomic environment
Managing the macroeconomic environment Theme Our approach Outcomes Inflationary Strong client relationships and effective risk management; pricing-in pressures inflation. Robust partner selection and enhanced due diligence; understanding Margin 2.4%. Supply chain their challenges and drivers and p
Slide 11: Strong balance sheet
Strong Balance sheet £m 30 June 2023 30 June 2022 balance sheet Intangible assets & goodwill 98.3 97.0 PPP & other investments 44.6 47.5 Other non-current assets 61.3 45.9 Well-capitalised. Continued balance sheet strength driven by Working capital (268.5) (255.5) net cash and PPP assets. IFRS 1
Slide 12: Robust cash performance
Robust cash performance Average month-end cash £135m 280 260 36 7 4 98% of invoices paid in 60 days, (12) 240 (11) exceeding PPC requirement 219 220 of 95% 220 (20) (3) 26 £m 200 180 average days to pay 160 140 120 88% of invoices from suppliers Opening net Cash from Working Interest IFRS 16 Excepti
Slide 13: Prioritising capital allocation
Prioritising capital allocation A strong balance sheet Strong balance sheet Invest in the business Sustainable Return excess cash to support operations shareholder returns Competitive advantage. Enables strategic and Dividends will grow with Additional shareholder Gives confidence to clien
Slide 14: FY24 outlook
FY24 outlook Confidence in FY24 outlook, supported by strong balance sheet, quality order book and robust performance. Pre-exceptional profit expected to be at the upper end of estimates1. Average cash similar to FY23. 1 Current range of analysts' estimates for pre-exceptional PBT for FY24 is
Slide 15: Delivering shareholder value
Since 2020 demerger Delivering Total three-year shareholder value dividend declared £11.1m Increasing returns with improved performance £5.2m £8.8m £25.1m FY21 FY22 FY23 23.2p Special dividend declared while retaining funds for growth. Buyback will provide long-term increase to earnings per shar
Slide 16: Sustainable Growth
Sustainable Bill Growth Hocking Chief Executive HMP High Down 16
Slide 17: Engine for Sustainable Growth
Engine for Sustainable High-quality Growth order book Strong culture of Good discipline and risk People visibility of pipeline awareness Strong balance sheet 17
Slide 18: 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 19: Sustainable Growth strategy and 2026 targets
H fe xed Environment & lealth & Safety oe ‘haty, cai, climate change of oa "esp ay Fe Op". OFS %, 2. $e A ©, Py our peopl ELL $s Sustainable %%, CO lur people és 4B ommunities ae Growth .% S, 2026 revenue target £1.6bn (FY21:£1.1bn) z 5 2026 divisional operating ce Clients % Y % % margin target rd a
Slide 20: ESG
ESG Supporting our growth strategy Environment: carbon | biodiversity | resources reduction in Scope 1 and Net zero by 2030 within 69% 2 carbon emissions since 2012* 79% of our fleet is electric/plug-in hybrid 94.5% Waste diverted from landfill 2030 our operations and by 2045 across all operations S
Slide 21: Water sector investment
AMP8 forecast1 Water sector 90 investment 80 70 1.1x 60 Significant increase in investment across AMP8. 50 1.1x £bn Well positioned and working for all of the major 40 regulated water and sewage companies in England, 30 Wales and Scotland, across design and build and capital maintenance activiti
Slide 22: Water technologies
Water technologies New partnership that will help UK water sector. Galliford Try expertise in the design, build and operation of water and wastewater assets. Siemens’ technical expertise and digital tools, hardware and software in water and wastewater. The new offering will: • Speed up proje
Slide 23: Strong market outlook
Maturing procurement and sector attitudes Strong Shift in value – quality-based procurement. More equitable risk management to underpin the general financial health of the sector. market Incentivisation – contract mechanisms or by long-term collaborative arrangements. outlook Closer collabor
Slide 24: 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 25: High-quality £3.7bn order book
High-quality £3.7bn order book Order book by client type £550m £555m £3.3bn £3.4bn £3.7bn 87% 9% 9% 13% Repeat clients for FY23 £626m (FY22: 94%). £2.2bn £1.5bn 87% £120m £838m 91% 91% 92% £339m £685m FY21 FY22 FY23 Public and regulated Private Work secured for FY24 Building Infrastructure (For FY23
Slide 26: Frameworks provide opportunity beyond 2026
Frameworks provide opportunity beyond 2026 Good forward visibility 2023 2024 2025 2026 2027 2028 Highways Midlands Highways Alliance + Midlands Highways Alliance + YORcivil 2 YORcivil 3 National Highways RDP National Highways IDF National Highways Pavement Delivery Framework National Highways Scheme
Slide 27: Summary
Summary Positive earnings momentum Sustainable Growth Strategy progressing well Consistent and profitable growth since 2020 demerger Progress in the year underpinned by our focus Revenue up 24% Pre-exceptional profit before tax1 up 105% Pre-exceptional earnings per share1 up 99% Dividend per share
Slide 28: Questions & answers
Questions Bill & answers Hocking Chief Executive Andrew Duxbury Group Finance Director 28
Slide 29: Appendices
Appendices 1. A platform for sustainable growth 2. Sustainable Growth Strategy 3. Our sustainability commitments 4. Why we target frameworks 5. Forward order book 6. Contract types 7. PPP Investments valuation 29
Slide 30: 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. 30
Slide 31: Sustainable Growth Strategy
Appendices 2. Sustainable Growth Strategy A people-orientated, progressive Deliver excellence for our clients. culture driven by our values. . Clients: Delivering lower carbon, superior buildings and Health and safety: Prioritising infrastructure with a better social health, safety and wellbeing and
Slide 32: Our sustainability commitments
Appendices 3. Our sustainability commitments Strategic Sustainability FY22 FY23 Ambition priorities pillars Health and Lost Time Frequency Rate 0.26 0.20 No harm safety Accident Frequency Rate 0.06 0.09 No harm Progressive culture Early careers as a % of total employees 6.1% 6.3% >8% Our people Wome
Slide 33: Why we target frameworks
Appendices 4. Why we target frameworks Improved risk and favourable outcomes Improved risk allocation: • Established and well-understood terms and 82% Work in frameworks conditions. (FY22: 90%). • Long-term client relationships. • Predictable behaviours. • Certainty in tendering and typically redu
Slide 34: Forward order book
Appendices Forward order book distribution – Building (excluding FM) 40 5. Forward order 35 book 30 Number of contracts 25 <£20m average contract size. 20 15 10 5 0 Contract size 34
Slide 35: Contract types
Appendices Where an overall target contract value is agreed with the client, 6. Contract types Target cost/cost including margin, risk and inflation contingencies, and the actual cost of the work plus agreed fee is paid by the client. Any cost savings or reimbursable overspends against the target ar
Slide 36: PPP Investments valuation
Appendices PPP Investments valuation 7. PPP Investments 55 valuation 50 £46.2m £44.6m Valuation £m 45 £43.0m 40 35 30 6.80% 7.30% 7.80% Discount rate % 36
Slide 37: 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
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