Broker Liberum describes Galliford Try’s (GFRD) half year results as “messy and weak in a transition year”. The group sold its housebuilding operations to Vistry (VTY) – formerly Bovis Homes – in January, and it has been rejigging the leftover construction business to focus on building, water and highways. The six months to 31 December 2019 saw it swing from a £2.9m adjusted operating profit to a £6.7m loss.
Galliford had been targeting a 2 per cent adjusted operating profit margin across ‘building’ and ‘infrastructure’ by 2021, but this has been pushed back to 2022. In the building division, the margin dipped 0.5 percentage points to just 0.6 per cent in the first half of the year, attributed to settling final accounts on legacy contracts. Meanwhile in infrastructure, contract settlements and legal costs pushed the margin into negative territory and the division flipped from a £1.5m adjusted operating profit to a £1.4m loss.
The group finished the half with £225m of net debt (excluding £23m in lease liabilities). But with the proceeds from the housebuilding disposal, it is now in daily net cash and has cancelled its debt facilities. Average month end net cash for the second half is expected to top £100m.
Liberum expects an adjusted pre-tax loss of £11m and loss per share of 8.1p for the full year, swinging to a £6m profit and EPS of 4.4p in 2021.
| GALLIFORD TRY (GFRD) | ||||
| ORD PRICE: | 126p | MARKET VALUE: | £ 140m | |
| TOUCH: | 124-126p | 12-MONTH HIGH: | 201p | LOW: 53p |
| DIVIDEND YIELD: | 46.9% | PE RATIO: | 1 | |
| NET ASSET VALUE: | 629p | NET DEBT: | 35%* | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 728 | -24.7 | -18.2 | nil |
| 2019 | 668 | 16.6 | 11.2 | 1.0 |
| % change | -8 | - | - | - |
| Ex-div: | 19 Mar | |||
| Payment: | 17 Apr | |||
| *Includes £22.8m in lease liabilities | ||||
