Galliford Try (GFRD) posted record first-half results as it benefited from a buoyant housing market, giving management the confidence to hike the dividend by 47 per cent. The housebuilder and construction specialist remains on track to double its pre-tax profit and EPS between 2013 and 2018.
Encouraging sales rates fuelled revenues and margins in Galliford's housing division, driving up profits. Strong demand for affordable housing, meanwhile, sparked a sharp uptick in orders for Galliford's partnerships unit. For example, the division has been contracted to build 1,100 mixed tenure homes in Canning Town, London. Meanwhile, a huge jump in land sales drove operating margins at Linden Homes up 160 basis points to over 15 per cent.
Galliford's management has been making the most of a “positive” land market by securing a record 14,300 plots. That means all the consented plots needed for 2016 have been secured, as have 70 per cent of plots required for 2017. Meanwhile, the bigger construction business ended the period with a record order book of £3.25bn - a three-fold rise. Importantly, that means that three-quarters of its projected revenue for 2016 is already secure. Recently-acquired Miller Construction chipped in about £169m of revenues, underpinning the group's targets.
Broker Panmure Gordon expects pre-tax profit of £112m for 2015, giving EPS of 106.9p (from £96.5m and 94.6p in 2014).
| GALLIFORD TRY (GFRD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,427p | MARKET VALUE: | £1.2bn | |
| TOUCH: | 1,425-1,429p | 12-MONTH HIGH: | 1,469p | LOW: 1,044p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 642p* | NET DEBT: | 7% | |
| Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 0.80 | 38.1 | 36.8 | 15.0 |
| 2014 | 1.09 | 42.5 | 42.0 | 22.0 |
| % change | +35 | +12 | +14 | +47 |
Ex-div:19 Mar Payment:08 Apr *Includes intangible assets of £153m,or 185p a share | ||||
