Construction group and housebuilder Galliford Try (GFRD) delivered impressive earnings growth at the full-year stage and also rewarded shareholders with a hefty hike in the dividend.
Housing completions fell from 3,039 to 2,932 as the group focused on developments offering superior returns on capital. Indeed, average private selling prices rose 5 per cent to £262,000 and, together with greater use of cheaper land, the operating margin rose from 11.8 per cent to 13.1 per cent. Moreover, chief executive Greg Fitzgerald reckons that the margin can be lifted to 17-18 per cent by 2018. The group has also been busy buying more land and the land bank now stands at a record 11,300 plots. All the land needed for 2014 has already been secured and 90 per cent for 2015.
On the construction side, margins slipped from 2 per cent to 1.7 per cent and are expected to ease further to around 1.4 per cent before recovering. Encouragingly, the order book was maintained at £1.7bn, thanks to growing demand from the private sector, which helped to offset further delays in bringing forward public sector work. Even so, profits here slipped from £18.9m to £15.1m.
Broker Numis Securities expect pre-tax profit for 2014 of £84m, giving EPS of 79.6p.
| GALLIFORD TRY (GFRD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,046p | MARKET VALUE: | £869m | |
| TOUCH: | 1,060-1,062p | 12-MONTH HIGH: | 1,090p | LOW: 663p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 612p* | NET DEBT: | 3% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.46 | -26.9 | -34.4 | 10.9 |
| 2010 | 1.22 | 19.2 | 14.7 | 12.5 |
| 2011 | 1.28 | 41.7 | 40.3 | 16.0 |
| 2012 | 1.50 | 63.1 | 60.9 | 30.0 |
| 2013 | 1.47 | 74.1 | 71.7 | 37.0 |
| % change | -2 | +17 | +18 | +23 |
Ex-div: 16 Oct Payment: 29 Nov *Includes intangible assets of £128m, or 157p a share | ||||
