Galliford Try lifts dividend after 'strong' year

Construction and engineering company Galliford Try reported a “strong performance” in its final results on Wednesday, with increased revenue, pre-exceptional profit and operating margins.

The London-listed firm said its profit before tax was ahead 68% for the 12 months ended 30 June at £19.1m before exceptional costs.

It recorded an increased divisional operating margin of 2.4%, up from 2% year-on-year, which the board said made for “excellent progress” against its 3% margin target for 2026.

The company said it was cash-generative with a “well-capitalised” debt-free balance sheet, as average month-end cash for the year rose to £174m from £164m, while its public-private partnership asset portfolio slipped to £47.5m from £49.1m, with the firm having no pension liabilities.

Its board declared a 66% hike to the final dividend, to 5.8p, which together with the interim dividend of 2.2p made for a 70% increase in the total dividend to 8p.

Galliford Try also pointed to the additional capital return being made through an initial £15m share buy-back programme.

During the year, the company made a one-off payment totalling £1m to more than 1,800 employees, in recognition of the current cost-of-living crisis, while the board said it was delivering on its sustainable growth strategy, with a “confident outlook” for disciplined growth in 2023.

Looking ahead, Galliford Try noted its “high quality” £3.4bn order book, up from £3.3bn a year ago, positioned across its chosen sectors, with 90% of 2023 revenue already secured.

“The group has had another successful year,” said chief executive officer Bill Hocking.

“We have made an excellent start to our sustainable growth strategy, delivering risk managed controlled growth while making good progress on our margin improvement target.

“Our commitment to robust risk management, careful contract selection and operational excellence continues to underpin our performance and prospects.”

Hocking said the group was well-capitalised, and had a “strong and selective” order book, focussed in its “chosen and proven” sectors.

“This has enabled us to significantly increase shareholder dividends and capital returns.

“With strong and disciplined risk management we continue to manage the current market conditions, including the inflationary pressures, and are well placed for further progress in the 2023 financial year.

“With our passionate teams, strong balance sheet, market-leading sector positions, excellent client and supplier relationships and high-quality order book, we look forward to the future with confidence.”

At 1045 BST, shares in Galliford Try Holdings were up 3.62% at 162.68p.

Reporting by Josh White at Sharecast.com.