GFRD revenues increase 10% with profits up 16% to £157m
Companies: Galliford Try Holdings PLC
Galliford Try (LSE: GFRD) struck a confident tone in its FY Results this morning with a 21% dividend increase and solid growth in revenues and earnings. Revenues (including JVs) rose 10% over the year and profit from operations rose 16% to £157m. The Balance Sheet looks healthy with a relatively flat net debt position of £8.7m, half the level reported in 2015.
The main driver of profits was Linden Homes which achieved encouraging margin expansion driving profit from operations up 19% to £147m from £124m. The other businesses were relatively flat YoY with respect to earnings.
Linden Homes benefited from a robust housing market throughout the year resulting in completions of 3,078 compared with 2,769 in 2015. This was helped by shortages in supply and easily available, low-cost mortgages. According to management, the margin expansion was driven by:
"a rigorous drive in efficiency ... We have restructured and strengthened senior management, and achieved significant overhead savings through process rationalisation."
Shares opened up 3% today in early trading as the market welcomed the dividend increase and performance at Linden Homes. Shares are down 35% over the year and up 48% from their low in July.
Peter Truscott, CEO, highlighted the "further progress on margins in Linden Homes", as well as reiterating the Group continues to "make progress in resolving older contracts in Construction". The team have reorganised management across the three main businesses "creating the right platform for future progress in both volume and margin" according to Mr Truscott. This and the record results has driven the 21% dividend increase.