Another day, another set of reassuringly upbeat results from a UK housebuilder. An imminently respectable set of interim results from Uxbridge-headquartered Galliford Try (GFRD) follow on from Barratt Development's (BDEV) half year results on 24 February which showed robust growth across all the metrics that matter.
Galliford reports improved profitability in all of its three business areas. Management tells investors that 'recent activity has remained robust and the group is sticking to its medium term margin targets'.
Group revenue is up 12% to £1.26 billion while profit before tax rises 24% to £52.9 million in the six months to 31 December 2015 as a result of rising margins and improving operational performance across Galliford's three divisions.
While the construction market continues to show signs of improvement this has been at a slower rate than anticipated.
Galliford has nevertheless further improved its order book to £3.7 billion, with good visibility on projected revenue for this year and the next financial year.
Looking to the balance sheet, the group has maintained its strong focus on cash management throughout the period. Net debt at 31 December 2015 was £95.7 million which represents gearing of 16.8%.
The increase of £78.4 million since 30 June 2015 principally reflects additional investment in working capital within Linden Homes of £80.1 million.
Average debt over the six months to 31 December 2015 was £194 million compared to £137 million in the equivalent period last year and £168 million in the full year.
As a mark of Galliford's continuing confidence in the delivery of its growth strategy, the group has increased the interim dividend by 18%.
The group's strategy is to more than double 2013's profit before tax of £74.1 million and earnings per share of 71.7 pence by 2018, with a greater increase in the dividend.
Housing market conditions, both private and affordable, remain good in all regions. Mortgage availability and affordability continues to improve and benefit from government initiatives.