Galliford Try Plc (GFRD.L), a UK-based housebuilding and construction company, reported Tuesday a significant increase in fiscal 2012 profit benefited by higher housebuilding revenues. The company also announced an 88 percent increase in total annual dividend.
Chief Executive Greg Fitzgerald commented, "Against a background of challenging and uncertain economic conditions I am very pleased to report that we have exceeded the objectives of our three year transformational housebuilding plan, delivering a substantial increase in profits and return on capital. In addition, we have maintained a high quality construction order book."
Full-year pre-tax profit climbed to 63.1 million pounds from last year's 41.7 million pounds that included a 6.6 million pounds exceptional credit. Annual earnings per share were 60.9 pence, higher than 40.3 pence in the prior-year period.
Group revenue on continuing operations totaled 1.50 billion pounds, a 17 percent increase from 1.28 billion pounds a year ago. Revenue, including joint ventures, went up 18 percent to 1.58 billion pounds.
Housebuilding revenues, including land sales, increased 64 percent to 636.7 million pounds boosted by the culmination of three-year expansion plan. Operating profit margin including land sales climbed to 11.8 percent from prior year's 8.1 percent. Completions increased 40 percent to 3,039 units. Average selling price also increased from last year.
The company said the market conditions remained mixed with challenging trading in much of the country, while housing market in the South East was robust.
Construction segment's revenues declined in difficult markets with lower revenues in buildings and partnerships, partly offset by higher infrastructure performance. Margin was 2 percent, lower than last year's 2.4 percent. Current order book is at 1.65 billion pounds, compared to last year's 1.7 billion pounds.
Further, the board recommended a final dividend of 21 pence per share, in line with the enhanced dividend policy, payable on November 16 to shareholders on the register at October 5. This will result in a total dividend of 30 pence per share, an increase of 88 percent over the previous year.
Looking ahead, the company noted that both housebuilding and construction segments are in strong positions with clear strategies going forward and are well placed to benefit from opportunities in their respective markets.
For construction, 2013 will be one of the peak years for work in the water sector that will help offset lower activity in other construction markets, the company said, adding that it welcomes the Government's initiatives to stimulate housebuilding and the construction market.
In the housebuilding segment, the company said its objective over the next few years is to continue to deliver revenue growth and improve margins by maximizing the efficiency and effectiveness of operations.
Fitzgerald added, "We have a strong balance sheet and a disciplined growth strategy with a clear focus on improving margins that positions us well to deliver further profitable growth in the new financial year and beyond."
As announced earlier, the company's current finance director, Frank Nelson will retire on September 30 after over 25 years with the company. Graham Prothero will join the board of directors as finance director later in the financial year.
Galliford shares closed Monday's trading at 670.71 pence in London, down 1.29 pence or 0.19 percent.
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by RTT Staff Writer
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