Galliford Try Holdings Plc · LSE:GFRD
Galliford Try — H1 2023 Earnings Presentation
33 slides from Galliford Try's earnings presentation, Mar 8, 2023
Slide 1: Delivering Sustainable Growth
Delivering Sustainable Growth Half year results to 31 December 2022 8 March 2023
Slide 2: Agenda
Agenda Bill Half year results to 31 December 2022 Hocking Headlines Chief Executive Financial review Strategic progress Q&A 2 RDP East
Slide 3: Headlines
Headlines £11.7m UP 65% Profit before tax1 (HY22: £7.1m) Sustainable Growth Strategy progressing well Controlled growth in revenue and profit. All businesses performing well. 2.3% UP 0.1 ppt Divisional operating margin Acquisitions have enhanced our capabilities. (HY22: 2.2%) Strong balance
Slide 4: Financial review
Financial Andrew review Duxbury Finance Director 4 Utility Week Live 2022
Slide 5: A compelling investment case
A compelling investment case High-quality business operating in robust markets generating growing returns Robust market The right culture to Strong financial position Clear strategic direction opportunity deliver our strategy Market leading position and People-orientated business – Track recor
Slide 6: Continued delivery of financial targets
Continued £679m 2.3% Revenue Divisional operating delivery of (HY22: £594m) UP 14% margin (HY22: 2.2%) UP 0.1 PPT financial targets £11.7m 8.8p Strong performance delivered. Profit before tax1 Earnings per share1 (HY22: £7.1m) (HY22: 5.9p) UP 65% UP 49% Further progress on divisional operating m
Slide 7: Strong operational performance
HY23 HY22 Var Strong Revenue £679m £594m +14% Operating profit1 before operational £10.8m £6.9m +57% amortisation Profit before tax1 £11.7m £7.1m +65% performance Earnings per share1 8.8p 5.9p +49% 1 Pre-exceptional items. Controlled revenue growth particularly in Infrastructure. Operating margi
Slide 8: Improving operating profit
Improving operating profit 15.0 Operating profit bridge Reflection of quality in order book. 0.8 Focus on efficient contract 1.2 delivery including: 10.0 10.8 1.9 • Investment in our teams. £m • Digital investment and 6.9 modern methods of 5.0 construction. • Engagement with clients and supply c
Slide 9: Strong balance sheet
31 Dec 30 June Strong balance Balance sheet £m 2022 2022 sheet Intangible assets & goodwill PPP & other investments 100.5 46.1 97.0 47.5 Other non-current assets 48.1 45.9 Well-capitalised. Working capital Working capital (238.4) (255.5) Robust cash position. IFRS 16 (27.9) (24.8) • Average mont
Slide 10: Robust cash performance
Robust cash performance Average month-end cash £154m 98% 250 16 225 2 of invoices paid in 60 days, 219 (19) exceeding PPC requirement 200 (10) of 95% (5) (7) £m 26 196 175 Operating cash outflow in the average days to pay 150 period £(3)m 125 Opening net Cash from Working Interest Dividend & Excepti
Slide 11: Prioritising capital allocation
Prioritising capital allocation A strong balance sheet Maintain strong Invest in the business Sustainable Return excess cash balance sheet shareholder returns Competitive advantage. Enables strategic and Dividends will grow with Additional shareholder Gives confidence to clients bolt-on op
Slide 12: Shareholder returns
Shareholder returns Increasing returns with improved performance 3.0p Interim dividend UP 36% (HY22: 2.2p) Dividend policy driven by strong balance sheet, financial performance and outlook. 2.0x Annual dividend covered 2.0x by earnings. Annual dividend cover policy Interim dividend declared 3.
Slide 13: Strategic progress
Strategic Bill progress Hocking Chief Executive 13 Ascot STW
Slide 14: Robust market outlook
Robust market outlook Ongoing investment in the UK’s Significant opportunity for Improving macroeconomic social and economic infrastructure decarbonisation conditions Key contractor for public and Three-pronged approach: Contractual protections against regulated sector clients, with 91% inflatio
Slide 15: Managing the macroeconomic environment
Managing the macroeconomic environment Theme Our approach Outcomes Inflationary Strong client relationships and effective risk management; pricing-in pressures inflation. Supply chain Robust partner selection; understanding their challenges and drivers Margin improved to 2.3%. failure and providin
Slide 16: Sustainable Growth Strategy
Sustainable Growth Strategy A people-orientated, progressive Deliver excellence for our clients. culture driven by our values. . Clients Health and safety Progressive Quality and culture Strategy innovation Supply chain Our people Deliver high-quality buildings and infrastructure in a socially respo
Slide 17: Growth via existing and adjacent markets
Growth via existing and adjacent markets Underpinned by sustainability commitments Growth via existing 2026 targets Growth via adjacent markets in Revenue markets in Building (education, health, defence and custodial, FM and £1.6bn Private Rented Sector (PRS). Green retrofit. commercial). Marg
Slide 18: Accelerating opportunities in adjacent markets
Accelerating opportunities in adjacent markets Environment Capital maintenance & asset optimisation Pre-acquisition Post-acquisition Key market growth opportunity. client base client base • Identified as an adjacent market opportunity in Sustainable Growth Strategy. Key: AMP7 D&B frameworks Capita
Slide 19: Focused risk management
Bid opportunities Initial consideration Focused risk management Heat map BU approval Exec approval (if needed) Assessing and managing risks and uncertainties is the Bids selected central element of our process and business strategy Robust review and approval Board approval required for Technical, co
Slide 20: Quality-driven work-winning
Quality-driven work-winning Indicative scoring criteria Management 24% People-orientated, Project delivery 20% progressive culture 20% Health, Safety and Environment 6% Quality 6% Quality and innovation 80% Sustainability and carbon 6% Socially responsible delivery Social value (local investment) 8%
Slide 21: Robust £3.5bn order book
Robust £3.5bn order book Order book by client type £420m £620m £550m 3.5 £3.3bn £3.4bn £3.5bn 9% 79% £170m £2.1bn £1.4bn 19% 9% Work secured for FY24 £840m 3.0 (HY22: 81%). £360m 2.5 £520m 87% 2.0 £bn 1.5 81% 91% 91% Building Infrastructure Work in frameworks 1.0 order book order book (HY22: 87%). 0
Slide 22: Advantages of working in frameworks
Advantages of working in frameworks • Cleeve Meadow School Improved risk allocation: Established and well-understood terms and conditions. Long-term client relationships. Predictable behaviours. Certainty in tendering and typically reduced cost of tenders. • Armthorpe Frameworks allow strate
Slide 23: Good forward visibility
Good forward visibility Examples of our framework positions 2023 2024 2025 2026 Highways Midlands Highways Alliance YORcivils National Highways RDP Environment AMP7 AMP8 Scottish Water Investment Programme Alliance Defence & Custodial Crown Commercial Services MOJ frameworks Education DfE Constructi
Slide 24: Summary
Summary Progressive Quality and culture Strategy innovation Sustainable Growth Strategy Deliver high-quality progressing well buildings and infrastructure in a socially responsible way and provide a sustainable return for our Continuing to deliver profitable growth. shareholders Strong pipeline
Slide 25: Questions & answers
Questions & answers 25
Slide 26: Appendices
Appendices 1. Sustainable Growth Strategy 2. Segmental analysis 3. PPP Investments valuation 4. Supply chain payment 5. Forward order book 6. Contract types 26
Slide 27: Sustainable Growth Strategy
Appendices 1. 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 28: Segmental analysis
£m HY23 HY22 Var Revenue 679.2 594.0 +14% Appendices Building 399.7 386.2 +3% Infrastructure 276.6 204.4 +35% 2. Segmental analysis PPP Investments 2.9 3.4 -15% HY23 HY22 Var Operating profit1 (£m) 10.8 6.9 +3.9m Building 9.3 8.4 +0.9m Infrastructure 6.5 4.3 +2.2m PPP Investments 1.5 (0.5) +2.0m Cen
Slide 29: PPP Investments valuation
Appendices PPP Investments valuation 3. PPP Investments 55 valuation 50 £48m £46m £44m Valuation £m 45 40 35 30 6.6% 7.1% 7.6% Discount rate % 29
Slide 30: Supply chain payment
Appendices Average days Invoices paid Invoices paid in 4. Supply chain 6 months to 31 Dec 22 to pay to terms 60 days payment Galliford Try Construction Ltd 26 89% 99% Compared to 31 Dec 2021 28 92% 98% Galliford Try Infrastructure Ltd 23 90% 98% Compared to 31 Dec 2021 21 94% 98% 30
Slide 31: Forward order book distribution – Building
Appendices Forward order book distribution – Building (excluding FM) 5. Forward order 40 book 35 Number of contracts 30 25 £20m average contract 20 size. 15 10 5 0 Contract size 31
Slide 32: 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 33: 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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