Galliford Try Holdings Plc · LSE:GFRD
Galliford Try — FY2020 Earnings Presentation
38 slides from Galliford Try's earnings presentation, Sep 16, 2020
Slide 1: Full year results
Full year results Strong foundations Year ended 30 June 2020 16 September 2020
Slide 2: Agenda
Bill Agenda Hocking Full year to 30 June 2020 Highlights Chief Executive Our business model and strategy Financial review Summary and outlook Q&As 2
Slide 3: Our vision
Our vision A people-orientated, progressive business, driven by our values to deliver for our stakeholders and the communities we work in 3
Slide 4: Highlights
Highlights Strong foundations FINANCIAL HIGHLIGHTS FY20 OPERATIONAL HIGHLIGHTS FY20 CONFIDENCE IN THE FUTURE Well-capitalised and debt-free. Successful transition following High-quality order book of £3.2bn and Revenue £1,090m. disposal of housebuilding divisions. 90% FY21 revenue secured.
Slide 5: Operating sustainably
Operating FUNDAMENTALS sustainably Health & Safety Environment Balance our financial performance & Climate Change with obligations to our stakeholders. ISO 44001 Assess and address Environmental, Our People Collaborative Social and Governance (ESG) across six business relationship areas. managem
Slide 6: Our business model
Leading brands in England and Scotland Our business Focus on public and regulated sectors. model Solid capability targeting contracts with appropriate risk profile. National strength, local delivery BUILDING INFRASTRUCTURE FY20 revenue1: £720m FY20 revenue1: £357m 30 June 2020: £2.2bn order book 30
Slide 7: Our market
Planned Government investment Total £2.2bn Order book1 Our market EDUCATION £531m Education Building £14bn for primary and Defence secondary education £504m and custodial Construction fundamental to UK economy. £263m Health • Growing population. DEFENCE • Ageing infrastructure. £4.6bn to optimise
Slide 8: Our market
Planned Government investment Total £1.0bn Order book1 Our market HIGHWAYS £598m Highways Infrastructure £28.8bn in the National Roads Fund Clients primarily public and regulated sectors. Excellent framework ENVIRONMENT £384m Environment position. £15bn for new and improved water and Further f
Slide 9: Our market
Our market PPP Investments and FM PPP INVESTMENTS FACILITIES MANAGEMENT Portfolio of £40.7m. Delivers annuity income for Group. • Valued using 9% discount rate. £395m order book. Generates annuity interest income. Primarily building management. Generates bidding opportunities Operation
Slide 10: Our strategy
Our strategy Three strategic priorities to create long-term value S1 S2 S3 Retain Improve Deliver Existing platform for Operations to drive margin Strong, predictable cash flows sustainable growth. progression. and margin improvement. 10
Slide 11: Retain
Strategic priority 1 High-quality teams who uphold Circa 3,000 employees. Retain our values. Solid business Regional structure providing Retained structure, complemented national coverage with local by agile working. fundamentals to relationships. provide platform for 90% of work in frameworks. sust
Slide 12: Improve
Strategic priority 2 AFR: 0.07 (improved from 0.10 in Health and safety. Improve FY19). Operations to drive Risk management in project Robust commercial control and selection and operations. rigorous risk management. margin progression Top Graduate and Apprentice Attract, develop and retain a Employ
Slide 13: Deliver
Strategic priority 3 OBJECTIVE MEDIUM-TERM KPI Deliver Disciplined contract selection and measured revenue growth. £1,200m - £1,500m. Strong and predictable cash flow and margin Focus on bottom line margin >2% operating margin after central growth. costs. improvement Control of operating cost
Slide 14: Order book
Order Order book1 by client type book 100% £2.9bn £3.2bn Public £462m £583m Regulated £141m Private 90% revenue secured for 75% £411m 2021. <£20m average contract 50% size in Building. £2,267m £2,168m 25% 0% FY19 FY20 1 As at 30 June 2020. 14
Slide 15: Financial review
Andrew Financial Duxbury review Finance Director 15
Slide 16: Financial performance
Financial Continuing operations Pre-exceptional performance FY20 FY19 Revenue £1,090m £1,403m Transitional year for new business. (Loss) from operations1 £(62.4)m £(16.9)m Core business was performing well ahead of the (Loss) before tax £(59.7)m £(17.2)m Covid-19 outbreak; benefits of our strict
Slide 17: Segmental analysis
Segmental analysis £m Revenue1 FY20 1,089.6 FY19 1,402.9 Var (22)% Building 719.9 858.3 (16)% Infrastructure 357.1 527.0 (32)% Building. PPP Investments & Central 12.6 17.6 n/a • Significant Covid-19 impact, especially in Scotland. • Revenue lower in London and commercial sectors. • Margin impacte
Slide 18: Financial review: Balance sheet
Financial review 30 June 30 June Balance sheet £m 20201 20192 Intangible assets & goodwill 85.0 86.6 Balance sheet PPP & other investments 40.7 41.2 Other non-current assets1 32.1 15.6 Debt-free group. • Net cash 30 June 2020: £197.2m. Working capital • No balance sheet debt. • No pension liabilit
Slide 19: Payment practices
Payment practices Performance since July 2019 substantially improved compared to prior year. Membership of Prompt Payment Code restored in December 2019. • Key to attract and retain our supply chain. Prompt Payment statistics improved again in the six months to June 2020. Electronic invoice
Slide 20: Financial guidance
Financial guidance1 Strategy FY21 Disciplined revenue growth and contract selection. Revenue £1.1bn - £1.3bn Growing operating margin starting in FY21. Operating margin2 • Pre central costs 1.4% - 1.6% • Post central costs 0.4% - 0.7% Control of central costs. Central costs Circa £10m Annuity income
Slide 21: Summary & outlook
Bill Summary Hocking & outlook Chief Executive 21
Slide 22: Summary & outlook
Summary & outlook Confident for the future Well-capitalised and debt-free; no balance sheet debt or pension liability. Encouraging post Covid-19 recovery. Clear strategic plan for long-term value creation supported by: • Strong demand and continued Government support in chosen sectors. • Excel
Slide 23: Questions & answers
Questions & answers 23
Slide 24: Appendices
Appendices 1. OUR BUSINESS 1.1 Management team 1.2 Operating sustainably 1.3 Geography 2. ORDER BOOK 2.1 Commercial control 2.2 Forward order book 2.3 Key framework positions 3. COVID-19 RESPONSE AND RECOVERY 4. FINANCIAL ANALYSIS 4.1 FY20 financial performance 4.2 Net finance income 4.3 Exceptional
Slide 25: Management team
Appendices 1.1 Management team A HIGHLY-EXPERIENCED EXECUTIVE BOARD More than 150 years’ construction sector experience. Supported by a strong plc Board. 25
Slide 26: Operating sustainably
Appendices 1.2 Operating sustainably FTSE4Good membership; 3.3/5 (FY19: 3.2); above sector average of 1.5. 30% decrease in carbon emissions from calendar years 2018 to 2019. Award-winning Challenging Beliefs, Affecting Behaviour and Be Well programmes. ‘Top Graduate Employer’ (18th out of 10
Slide 27: Geography
Appendices 1.3 Geography National strength, local delivery KEY Morrison Construction Highland 1 BUILDING Morrison Construction North East 2 National coverage through nine regions. Morrison Construction Central 3 Building North East & Yorkshire 4 Sector-specific support. Building North West 5 Bui
Slide 28: Commercial control and rigorous risk management
Appendices 2.1 Commercial control and rigorous risk management Focus on margin improvement over top-line growth. Disciplined approach to project selection. • Comprehensive commercial training. High quality, low risk, focused • Ceased fixed-price all-risk major contracts. order book • Margin thre
Slide 29: Forward order book distribution – Building
Appendices Forward order book distribution – Building (excluding FM) 2.2 Forward order 100 book 80 Number of contracts 90% revenue secured for 60 2021. <£20m average contract 40 size in Building. 20 0 <£10m >£10m >£20m >£30m >£40m >£50m >£60m >£70m Size of contract 29
Slide 30: Key framework positions
Appendices Department for Education’s school building framework (six lots). Scottish Procurement Alliance. Southern Construction Framework. LHC Schools and Community Buildings 2.3 Key framework Framework. North West Construction Hub. YORbuild/YORcivil. positions Crown Commercial Servic
Slide 31: Covid-19 response
Appendices PRIORITY 1 - health, safety and wellbeing of colleagues, subcontractors and clients. 3.0 Covid-19 • Risk assessed all of our workplaces. • Anticipated/deployed enhanced safety protocols ahead of response - quick, official introduction; strictly followed Construction Leadership Council’s g
Slide 32: Covid-19 recovery - emerging strongly
Appendices PRODUCTIVITY • Return to near normal productivity in England and 3.0 Covid-19 Scotland. • Office based staff continue to work remotely. recovery - emerging • Project Efficiency Task Force for digital and technical strongly innovation. PIPELINE • Government investment in Build, Build, Buil
Slide 33: FY20 financial performance
Appendices Revenue (Loss)/profit after tax Pre-exceptional, continuing1 £1,090m £(52.9)m 4.1 FY20 financial performance Exceptional items £32.0m £20.3m Discontinued operations2 n/a £353.0m Statutory £1,122m £320.4m 1 Refer to slide 17. 2 Refer to slide 37. 33
Slide 34: Net finance income
Appendices £m Interest receivable from joint ventures and PPP FY20 FY19 5.4 3.4 4.2 Net finance Investments income1 Interest receivable on bank deposits 0.3 0.2 Other2 (0.9) (1.6) TOTAL 4.8 2.0 1 Continuing operations. 2 Includes interest resulting from the adoption of IFRS 16 (in FY20). 34
Slide 35: Exceptional items
Appendices AWPR Queensferry £(m) charge/(income) Crossing charge Other2 TOTAL FY17 75.0 12.9 1.0 88.9 4.3 Exceptional items1 FY183 125.0 - - 125.0 FY19 32.3 6.7 11.8 50.8 FY20 (28.0) - 2.9 (25.1) TOTAL 204.3 19.6 15.7 239.6 1 Total Group. 2 Aborted Bovis merger professional fees (FY17), Construction
Slide 36: PPP Investments valuation
Appendices PPP Investments valuation 4.4 PPP Investments 50 valuation 45 £40.7m Valuation £m 40 35 30 7% 8% 9% 10% Discount rate % 36
Slide 37: Discontinued operations
Appendices Discontinued operations £m FY20 FY19 4.5 Discontinued Adjusted revenue1 £703.8m £1,443.6m operations Profit from operations2,3 £68.8m £195.3m FY20 up to date of disposal (3 January 2020). Profit on disposal Profit after tax £24.8m £136.1m £328.2m. Profit from discontinued 1 Includin
Slide 38: Disclaimer
Disclaimer This document contains statements that are, or may be deemed to be, guarantee that the occurrence of the events expressed or implied in any “forward-looking statements” which are prospective in nature. These forward-looking statements in this document will actually occur. You are forward-
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