Good morning, and welcome to Galliford Try Holdings plc half-year results to December 2023. I'm Bill Hocking, Chief Exec, and I'm joined by Andrew Duxbury, Group Finance Director. Here is the usual agenda for today. I'll take you through the highlights, Andrew will take you through the numbers, I'll then go through some of our operational progress and a case study, and then we'll go to Q&A. You'll see some familiar slides today which demonstrate the consistency and continuity of our approach. The photo you see here is our Grantham Southern Relief Road project for Lincolnshire County Council. In the foreground, you can see an impressively sized bridge starting to take shape, which will then be launched across the valley over the piers you see in the background. This is a great example of the engineering capacity and capability that we have in the business.
Here are the highlights for the half-year which demonstrate the excellent progress we're making. Revenue is up 21% at GBP 819 million, with divisional operating margin at 2.5%, up from 2.3% in the same period last year. PBT at GBP 15.6 million is up 33% on the previous period, with 13.2p earnings per share. We're pleased to declare an interim dividend of 4p, up 33% on the previous period. The cash performance was good, with average monthly cash rising to GBP 150 million from GBP 135 million previously. I'm really pleased with our performance in the first half. All of our businesses are performing well, our acquisitions in adjacent markets are settling in, and we've seen strong growth in the business. This, along with an excellent order book and long-term pipeline of opportunities, gives us confidence to deliver our full-year performance in line with expectations.
We aim to deliver consistent, predictable, profitable growth, and this slide demonstrates that we're doing just that. The continued improvement in our performance is assisted by a range of operational and technical efficiencies which I'll give an example of later on in the presentation. We're pleased with the progress that we're making on our sustainable growth strategy. On the back of this progress, we're looking forward to updating the markets with the evolution of our strategy and associated targets to 2030 at a capital markets event in London on the 23rd of May this year. And on that note, over to Andrew for the financials.
Thank you, Bill. Morning, everyone. On the screen is Greenhead College, which is one of the first generation of net-zero carbon in operation school buildings built as part of the Department for Education's School Rebuilding Programme. This is a reminder of our investment proposition which will be familiar to you. Galliford Try is a high-quality business with leading positions in market sectors that are robust and non-cyclical, and we're generating increasing returns for our shareholders. The growth opportunities in our market sectors remain strong, driven by the aging UK infrastructure with good levels of government investment and barriers to entry based on quality. The risk profile of our portfolio projects is very good, and we have excellent forward visibility, as Bill will cover later. Importantly, we have the culture embedded across our business to deliver our strategy, with everyone aligned to our purpose, values, and approach.
Our financial position is very strong, and we're demonstrating a track record of delivering predictable financial results and growing dividends. We're very pleased with the performance in the first half of the year, demonstrating good momentum and growth in line with our strategic targets. Revenue is up 21%, reflecting growth across all parts of the business. Our improved divisional operating margin has led to an overall increase in operating profit of 31%. Again, this represents a really good performance from all parts of the group. Pre-exceptional profit before tax is up 33%. This includes higher interest income due to the increased bank rates on our strong cash balances, although that's partly offset by higher IFRS 16 lease charges.
Exceptional costs, being the final element of the digital investment we've spoken about before, are lower than last year, and those systems went live successfully in the period, so that should be the last exceptional costs related to the new system. Our pre-exceptional tax rate of 15% is lower than normal due to prior year adjustments and is likely to be around 20% on an underlying basis for the full year. Altogether, this means that pre-exceptional earnings per share have increased by 50% compared to last year, benefiting as well from the reduction in share capital following the conclusion of last year's share buyback. Overall, the half-year performance was very strong, and I expect the full financial year to be more balanced between H1 and H2 this year than previously.
Delving into the segmental results in more detail, we saw revenue growth in both main divisions, and importantly, we also saw margin progression in both divisions, demonstrating the consistency and quality of our portfolio of contracts. We said last year that building saw some contracts delayed through 2022 due to inflation and slower public sector decision-making. We also said that these were delays and not cancellations, and that the issues were easing into 2023, so we anticipated this being positive for future revenue growth, and so it has proved. Building's revenue growth in the period, up 12%, shows that we're now benefiting from these contract awards that are now delivering on-site, and that rate of growth will normalize going forward.
Importantly, through those delays, we retained our disciplined approach to tendering and our focus on quality and future margin, and this is also now showing through in the results, with building's margin increased to 2.4%, and we're very confident that will continue to progress. Infrastructure's revenue is up 31%. This is driven by our environment business, mainly the continued improvement in AMP7 water revenues, but also growth in highways and our wider infrastructure offering. Environment's revenue growth will temper as we transition into AMP8 in due course, but we are really well placed in this sector. Very pleasingly, infrastructure's margin continued to progress to 2.6%, showing the strength in that business, with the combined divisional margin increasing to 2.5%. Our investments business successfully reached financial close on its first PRS co-development scheme, contributing to its revenue and profit in the period.
Remember as well that the comparative first half-year included a GBP 3.6 million profit on the sale of a joint venture investment, so the underlying investments profit is increased. Central costs are a little bit lower than this time last year, as we indicated that they would be. Coming back to margin, the quality of our order book and the contract portfolio continues to be the key driver of our margin improvement strategy. Operating profit pre-amortization has increased GBP 3.5 million to GBP 14.1 million. On the slide, I've stripped out the joint venture sale from last year's profit, so you can see the improvement from the operational business is actually nearer GBP 7 million, and that's driven by volume growth, margin improvement, and the increased contribution from investments and reduced central costs.
Our strong balance sheet, both our cash and our PPP assets, continues to be fundamental to our strategy, helping us to win work and to engage positively with the supply chain. It's worth repeating that we have no pension liabilities and no debt. Month-end average cash was GBP 150 million and will be similar, GBP 140 million-GBP 150 million in the full year. Of course, this is after the full GBP 15 million share buyback, which concluded in November, and the special dividend paid in October. With bank base rates increasing through the first part of 2023, such strong cash balances helped to increase our interest income in the period to GBP 2.7 million.
This included about GBP 2.4 million of bank interest, up from GBP 0.9 million last year, and GBP 2 million of interest on the PPP assets, but we also incurred increased IFRS 16 lease interest charges, largely from the growth in the size of our operations. Our intangible assets and goodwill increased as a result of the acquisition of AVRS in the period. Our PPP assets are valued at GBP 43.5 million, which is at a blended 7.3% discount rate, the same discount rate as at June 2023. And as I said, the portfolio contributes about GBP 4 million interest income annually, a strong annuity income stream which creates value to shareholders through our dividend policy. Overall, net assets are reduced GBP 16 million since June due to the shareholder returns, including the share buyback and the special dividends, exceeding the profit in the period.
Period-end cash of GBP 209 million is similar to June and a little bit higher than last December. The movement is summarized on the cash bridge. What this shows is two main things. Firstly, strong operating cash inflow supported by an improvement in working capital and net interest income. Taken together, that's an inflow of around GBP 27 million. And secondly, the return of around GBP 25 million in dividends and our share buyback during the period. That breaks down as GBP 8 million of the final dividend, GBP 12 million special dividend, and the final GBP 5 million of the share buyback that was spent in the period. Smaller items include, for example, IFRS 16 lease repayments and the GBP 3 million of cash we invested in our digital systems upgrade, which is now live. Importantly, our daily cash performance is robust and resilient.
Our average cash at GBP 150 million is very good, and we paid the supply chain well in 24 days on average, and we paid 97% of invoices in 60 days. These prompt payment numbers might drop a little bit in the next half-year due to the system transitions, but paying our supply chain well remains very high on our agenda. We continue to prioritize and retain a strong balance sheet. Our balance sheet provides a competitive advantage, which helps to deliver our sustainable growth plans. It's valuable to our clients who see the importance of financial stability and to ensure we're a partner of choice for our supply chain. Beyond that, our capital allocation policy remains unchanged.
Our balance sheet allows us to invest in future growth by investing in bolt-on acquisitions such as AVRS and in our adjacent markets such as our PRS capabilities, and continuing to invest in our people and in digital technologies that increase our quality and efficiency. Our strong balance sheet gives us the confidence that we can pay a growing and sustainable dividend. Our dividend cover policy at 1.8 times essentially returns the PPP interest income in full and returns half of our operational earnings annually, so the dividends will grow as we continue to grow the business. And finally, we've shown that we'll return excess cash to shareholders when appropriate. So to summarize, we've had an excellent first half with strong momentum in the business and have delivered profitable growth from the strong foundations we have built.
As a result, our interim dividend has increased 33% to four pence per share. You can see on the right-hand side that over the last three years, we've paid out GBP 25 million in ordinary dividends and GBP 27 million of additional shareholder returns through the buyback and special dividend. Trading since Christmas has continued well in line with our expectations. As we look into the remainder of the financial year and beyond, we're confident that we'll continue to see our good performance. We're confident in where the business is, and we'll see opportunities for continuing to deliver our profitable and sustainable growth strategy. With that, I'll hand back to Bill.
Thank you, Andrew. The photo here is of Stroud Sewage Treatment Works, and this is a shaft we're building as part of a wider program of sewer improvements. Here's a reminder of the broad philosophy of our business. We start with the core of the company, our excellent people. We engender a culture of discipline and risk awareness supported by good processes and aligned incentive mechanisms. Being very selective about the type of work and the clients we take on leads to a high-quality order book, which underpins our margin targets. Most of that order book is in long-term frameworks with repeat clients, and so we get good visibility of the forward order book and can align our people and our supply chain accordingly. This leads to a consistent and predictable operating performance, which further strengthens our balance sheet, and so the wheel turns.
Here's a reminder of our sustainable growth strategy. We aspire to deliver high-quality products to our clients in a socially responsible way and provide a good return to our shareholders. There are four very straightforward cornerstones of our strategy: people and the drive to a values-driven, inclusive, progressive business where the safety of everyone on our sites always comes first. We focus on retaining and developing our people and attracting new, good people to Galliford Try. We operate in a socially and environmentally responsible manner, striving to achieve our net zero carbon targets for 2030 and 2045, and delivering social value around our projects through employing local people and by procuring goods and services through local companies as far as possible. We deliver high-quality products for our clients and utilize modern methods of construction, off-site manufacture, and digital tools to improve quality and efficiency.
A significant proportion of work is delivered through our supply chain, and so retaining a high-quality supply chain is important, as is paying them promptly, on average 24 days, as you saw earlier. Our supply chain has proven resilient, and we continue to perform enhanced financial due diligence on the larger subcontracts or program-critical activities, which has proved effective to date. All of this comes together to provide good returns to our shareholders. As you've seen, we're growing well in our existing markets. We've also made progress in our adjacent markets with work underway on our first PRS scheme in Cardiff and a further three preferred bidder positions in the PRS sector. The acquisition of AVRS last year is settling in well and has accelerated our presence in the capital maintenance market in water and energy. Our approach to risk remains unchanged and core to our culture.
We have robust risk management processes throughout the pre-construction stage, strong project controls through the construction phase of our projects, and an embedded culture of risk awareness where we only accept those risks that we can reasonably price and manage. Here are some of the metrics we use to measure our business. We're pleased with our progress in reducing Scope 1 and 2 carbon emissions towards our 2030 Net Zero goal. Our Carbon Disclosure Project rating has improved to B, and we retain our MSCI AAA rating. Our accident frequency rate has improved in the period, which is good, but of course, we will not be happy until we reach zero. We've demonstrated good margin improvement over the years, and you see the main drivers of that improvement here. Taking on the right type of work with the right embedded margins is at the heart of our margin improvement.
Moving into higher margin adjacent markets augments that overall margin, and then there are a host of operational and process efficiencies which work together to further enhance our margins: modern methods of construction, off-site manufacture, digital tools, and so on, that allow us to construct a project in virtual reality and identify improvements, which then improves the quality and efficiency and safety, of course, of the physical build. Good people and a high-quality supply chain underpin all of this. This is one of our prison projects, which is a good example of how modern methods of construction are driving efficiencies across the design and construction cycle. The precast modules are manufactured in a factory, which insulates against weather conditions, improves quality, and gives greater program certainty. They are then delivered to site in the sequence needed to support the construction logic.
You can see in this slide the precast units being placed on an in-situ slab. They are temporarily supported until they're grouted into their permanent position and come complete with security windows, electrical wiring, plumbing, and so on. Once a floor is complete, a precast concrete slab is placed over it, and the next floor is constructed in the same manner. This method of construction needs fewer people on site, is fast and safer to construct, and reduces defects and rework. This slide shows the procurement routes and typical scoring mechanisms in winning frameworks or individual projects. You can see on the left-hand side that the vast majority of our order book comes through two-stage target cost cost reimbursable or negotiated work. Virtually all of our work is run on a quality basis, and you can see an example of a client's scoring criteria on the right-hand side.
Investors should be encouraged by these procurement methods, which provide a far more mature, sustainable contract environment with higher levels of collaboration between all parties and a more equitable allocation of risk leading to more consistent outcomes. There is robust long-term demand across our sectors. This is driven by aging social and economic infrastructure, which needs to be repaired, improved, replaced, and expanded to cater for the growing population and the effects of climate change. We have leading positions in these sectors and frameworks that are responding to these challenges, and we see a solid pipeline of opportunity well into the future. We have an excellent non-cyclical order book at GBP 3.7 billion, and you can see the details of the order book in building and infrastructure on the left-hand side. The split between the public and regulated sectors and the private sector remains broadly in the range 85%-15%-90%-10%.
The order book continues to have all of the attributes to underpin our goals in terms of its quantum, its longevity through frameworks, a sensible risk profile, and a high proportion of repeat clients. We have virtually all of this year's work secured: 83% of work already in hand for full year 2025 and over half of full year 2026's work already in hand. This is an excellent position, which provides continuity through the general election and means that we can continue to be very selective about the work that we do. I would draw your attention to the GBP 380 million special services order book, which includes FM and three shorter order book specialist businesses. We will expand more on these businesses and how we see them developing at the capital markets event in May. In summary, we're in very good shape.
Our growth strategy is progressing well, supported by great people, an excellent long-term order book, and a strong balance sheet. We've got momentum in the business, are delivering growing shareholder value, and are confident in the outlook for the full year. Overall, we're delivering ahead of our 2026 plan and look forward to presenting the next phase of our evolution to you at a capital markets event on the 23rd of May in London, and I hope to see you all there. That concludes the presentation, and I'll hand back to the operator to take any questions. Thank you.
As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two . We'll take now our first question from Alex O'Hanlon from Liberum . Your line is open now.
Morning, guys. Just a couple of quick questions from me. The first one is just given some weakness in the wider market, have you seen any weakness in your supply chain, and has that led to any quantifiable financial costs? And the second question is just I noted that HICL last week reported that it's seeing a disconnect between the private and public markets with respect to infrastructure asset valuations. What are you seeing in the secondary market for PPP assets, and are you open to dispose of any of yours in the near term? Thank you very much.
Hi, Alex. Thank you. I'll take the first one, and Andrew can pick up the second one. We've seen no weakness in our supply chain. What we do is we are very robust in working with what we call an aligned supply chain, companies that share the same values as us and have a strong balance sheet and a good reputation. So we've done enhanced financial due diligence on our main suppliers or on programme-critical suppliers over the last few years, and that's worked really well. So we've seen no real weakness in the supply chain, and it's not cost us any money.
Yeah. Morning, Alex. Just on the PPP valuations, obviously, we monitor the markets. There's still an active market as far as we can see. Don't forget the assets we've got are all really good, high-quality assets, but we haven't sold any in the period. They continue to contribute to our balance sheet strength. They contribute to earnings, contribute to our dividends. We're very comfortable holding the assets, but they're all high quality, and there is still a good market for those assets if required.
That's perfect. Thank you very much, both, and well done on the strong results.
Thank you.
Thanks.
We currently have no more questions coming through. As a final reminder, if you would like to ask a question, please press star one now. We've got no further questions, so I will hand you back to Bill Hocking. But sorry, we've got now one more question from Alex. I'll open your line again.
Just thought if there's no other questions, I'll be selfish. Can I just ask one more?
Sure.
Just in terms of I know you're going to probably set out some new targets at the capital markets day later this year. I imagine that kind of sourcing and retaining talent is going to be a key part of that. Can you just talk me through how easy you find it to attract and retain good people? Because I can see that that's a key part of the messaging in the slide deck.
Yeah, absolutely. I mean, people want to work for companies that are doing well, have strong balance sheets, have good reputation in terms of sustainability and so on, and diversity, inclusivity, and all of those things. So we've been working hard on that over the years, Alex, and we've got a really good retention rate. Our voluntary churn rate is around 10%, which is very good in the industry, and we find that we can attract good people to Galliford Try. We also recruit about 150 early-careers people every year, graduates, apprentices, and trainees to the business, and we're finding that the calibre of those people is really good. So we work hard on making sure that we remain an attractive destination for employees, and the evidence so far is that we are.
That's great. Thank you very much, Bill. I appreciate that.
Thanks, Alex.
We'll take the next question from Andrew Nussey from Peel Hunt. Your line is open now.
Great. Glad we could get the technology to work. A couple of questions from me. First of all, sort of operationally, you obviously referenced environments that have benefited from ramp-up in AMP7 activity. Obviously, conscious, we will be moving into AMP8, and you did say that growth would temper. Can we be fairly confident that you will be able to manage that sort of transition, I think, particularly in terms of ensuring skills are retained to face the AMP8 activity? And secondly, one for Andrew in terms of capital allocation. Obviously, when the current capital allocation strategy was introduced, you gave some proportion or percentage of revenues that you felt were comfortable to be held in terms of cash and investments. Are those levels still valid?
Perhaps when we look out to the capital markets event, if we see a mixed shift in the business towards infrastructure, would you look to review those levels of cash holding and investments?
Okay. Thanks, Andrew. So in environment, we're probably, I'm going to say, in this calendar year, probably going to reach the peak of AMP7. And then typically, you'd see a little bit of moderation in revenues as you transition to AMP8. Now, we've been working for years with the water companies and the regulator to try and moderate those sort of cycles. And my sense is that this year, we're going to be reasonably successful having a fairly smooth transition into AMP8. And I say that for two reasons. One, because quite a few of the water companies have already started their AMP8 procurement. We've already won a few AMP8 frameworks, and a number of our clients are just going to extend from AMP7 into AMP8. So that should moderate the usual swing we see there, Andrew.
Going into AMP8, though, of course, there's massive growth in the water industry in AMP8, and my view is that we need to make sure that we operate within our means in terms of people. So we will see growth, but as usual, we'll be very disciplined about how we approach that growth.
Yeah. Just on the cash point, Andrew, so our cash for the half-year, average cash was just over 9% of turnover on an annualized basis. I think we'd always said that kind of 8%-12% is about right. We're right in there and happy that that's still the right guidance for now. I mean, you're right to see that infrastructure business has obviously been growing faster than building over the last few years. So obviously, when we talk in May, we'll talk about what we think that looks like going forward. The important thing is that strong balance sheet is really important, and the strong cash balances are a key part of that.
Thank you.
We'll take the next question from others right now. We don't have further questions at the moment. But yes, as another reminder, if you would like to ask a question, please press star one now. Yeah, we've got now a question from Adrian Kearsey from Panmure Gordon. Your line is open now.
Thank you very much. Guys, well done on fantastic first half. In terms of water, you've made 4 acquisitions over recent years that have expanded your capabilities and capacities within the segment. Would you be able to perhaps provide some examples or sort of give some colour about areas such as digital and monitoring where you've won work by putting your sort of skills that you've brought in with your existing capabilities within water?
Yeah, sure, Adrian. I mean, so those four acquisitions, the biggest one, of course, was NMCN 2 and a bit years ago now. And what that acquisition did, it gave us geographical coverage of the whole of the UK because basically, where Galliford Try operated before the acquisition was the opposite to where NMCN did. So through that acquisition, we got geographical coverage of the whole of the UK, and we worked for every single water company or major water company in the UK. And that gives us a pretty unparalleled overview, I suppose, of each of the water companies and the ability to join the dots. And so what we've seen is discussions with water companies that allow us certainly in the manufacturing parts of the business.
So the other acquisitions were Lintott, which came with NMCN, and MCS, and those two companies make motor control centers and chemical dosing systems. And what we've seen there is the ability to join the dots to show companies that sometimes other companies' engineering standards are more efficient. And that means we can harmonize, for want of a better word, some of our designs, and that gives us manufacturing efficiencies because we can build more motor control centers, for example, of a similar ilk to two or three different water companies as opposed to bespoke ones to each one. So there have been some efficiencies there, and that's a win-win for both companies.
Another thing we're doing in the digital field is if you take ozone dosing plants, which are, again, built in a, it's not quite a container, but in an enclosure, and they send out to site, we build a digital twin alongside that so we can monitor the performance of that ozone treatment plant from our own offices in Norwich, and we can advise our clients if there's something that needs sorting out or cleaning or replacing, whatever it is. So we're starting to provide now an enhanced service to our clients where it's starting to move into the operational sort of capital maintenance and advisory sort of part of the industry. And that's going to grow, in my opinion, quite significantly over AMP8, where all of the water companies, as we've all seen in the press, have a driver to be more efficient in terms of their CapEx.
Bill, thank you very much.
We'll take the next question from Andrew Nussey from Peel Hunt. Your line is open now.
Yeah, if I could jump in with another one, please. Just in terms of the adjacencies strategy, and I'm conscious you say we might get a little bit more of the capital markets event, but just if you could sort of update around the FM decarbonization opportunity as well as just updating on the progress that you've had, or I guess particularly in sort of PRS through the investments side as well.
Yeah. So Andrew, in FM, the sort of green retrofit market is a huge market, but there's a bit of a disconnection we find between the will to do it and the CapEx to do it. So what we see is especially private sector clients have operational budgets, but they don't have the CapEx budget. So this is growing slower than we would have liked to be frank. But it is nevertheless the law still says by 2050, we need to be Net Zero. So the driver is very much still there. And hopefully, through the next few years, in terms of government spending, we'll see a bit more emphasis on the CapEx side, allowing people to make their buildings and their portfolios greener and more energy efficient. On the PRS side, we've started on the ground in Cardiff, so that job is going really well.
We've got a further three preferred bidder positions, one in Milton Keynes, one in Nottingham, and one in Leicester. So they're going along. I mean, they've got quite a long gestation period, these projects, and they've got to go through the planning cycles and so on, which sometimes can be a bit torturous. But overall, we're heading in the right direction. We've always said, by the way, that PRS will never be we expect to have two or three of these things going through the books at any one time. So they're not going to be game-changing, but they are margin enhancing.
Great. Thank you.
We'll take the next question from Alastair Stewart from Progressive. Your line is open now.
Oh, hi. Sorry, I had technical problems as well as Andrew. You just mentioned the PRS side, two or three projects at any one go. What about affordable? And between those two businesses, in about two or three years' time, could you see it being sort of 15%-20% of the building businesses' revenue? And another small point on PRS and affordable, since you mentioned Net Zero, I presume affordable clients will be putting a big emphasis on Net Zero. What about the PRS side? And then one final very quick question. On investments, the valuation went down a tad, and the discount rate went up a tad. Was one completely the result of the other, or have the cash flow dynamics changed in any way?
Okay, I'll take the first one and Andrew take the last one. Thanks, Alastair. So on affordable, obviously, it's an enormous market, and I think whatever happens politically in the future, it's going to remain a key to both major parties. So we had a restrictive covenant, of course, after we sold the businesses to Vistry, and that ended last year. And since then, we've brought in some very good people in the affordable space. We had our first win last month on an affordable framework. So we started getting onto these frameworks, which allow us access to the market. And hopefully, in the not too far distant future, we'll be pulling in our first few projects and getting going on the ground. So we will talk about that more, Alastair, in May and how we see the affordable market evolving over time.
On Net Zero for PRS, yes, we see our clients wanting efficient buildings. Of course, it's always a trade-off between the CapEx required to invest in some of these green technologies versus a long-term payoff. But depending on what the energy prices are doing, it does remain a bit of a no-brainer over the long term.
Morning, Alastair. Just on the investment valuation. So the discount rate's actually the same as we used at the 30th of June. So obviously, there was a movement from 31 December 2022 to 30th of June 2023. That's then stayed the same over the last six months. And the reduction there is largely just there's a small subordinated debt repayment in there, which just trimmed the overall number slightly.
Sure. All right. Great. Thank you very much.
Thanks, Alastair.
We'll take the next question from Stephen Rawlinson from Applied Value. Your line is open now.
Thank you. Good morning, chaps. Just a quick one from me. On the 21% increase in revenue, is there a broad brush sort of split you could give us of what was inflation within some of the cost-plus contracts, what was acquisitions, and what was volume growth? Just so we can get a sort of fix on what may happen over the next few years, depending on how you proceed with each of those particular elements. Quite obviously, inflation between the first half of this year and the first half of 2022 would be quite considerable. So I just wonder if you could help us out a little bit just to understand what is genuine volume growth and what was from acquisitions and what was pricing.
Yeah. So morning, Steve. The acquisition bit is relatively small. So don't forget that obviously, I mean, the acquisitions in aggregate probably are in the order of magnitude GBP 150 million revenue per annum. But don't forget the biggest part of that was NMCN, which came in in October 2021. So in terms of the period-on-period growth, that's not really a drive. So that growth isn't really driven by acquisitions in the period. Of course, there's always a little bit of inflation. It's very hard to split out what's pure inflation because, of course, what we do is we price each individual project, each individual job on its own merits at the time. So it's quite difficult to split that out. I mean, I think what I would say is probably the bigger driver in the building side, I'd say, was that sort of hiatus through 2022 coming through.
We will see the growth rate in building probably come down a little bit. I don't expect that to carry on at sort of 12% rate. In infrastructure, again, the growth rate is probably higher than normal just because of that ramp-up in the water revenues, and that will come up a little bit as we discussed earlier.
Okay. Just looking forward, I mean, is there any sort of guidance you'd give us on that? Because obviously, you've hit the GBP 1.6 billion annual revenue run rate two years early. I was just trying to understand the elements of that because I think when you put that into place, there was some sort of vagueness about what would be the contribution of acquisitions, what would be the contribution from growth. I'm just trying to understand just a little bit about that. But I don't want to flog it to death. I just wanted to just get a bit of a sighter on that from you if there is one, please.
No, that's fine. So back in 2021, I think what we said was that the infrastructure part of the business would grow quicker or more than the building part as part of moving from GBP 1.1 billion-GBP 1.6 billion. And of course, actually, we didn't have that GBP 1.6 billion. It wasn't contemplating any acquisitions. So in a sense, the acquisitions have added some or accelerated that. And of course, Steve, actually, you're doing a great trailer for me because this is why you should come along in May, and we'll talk about what that looks like going forward.
It's a day after the Europa League final in Dublin. I've got problems. All right. Thank you very much indeed, chaps.
Thanks, Steve.
We currently have no further questions. I will hand over to you, Bill Hocking, for final remarks.
Thank you. Short and sweet, everyone. Thank you very much. Really pleased with our overall results in the half-year, confident in the full year, and look forward to seeing as many of you as possible. Football notwithstanding. On the 23rd of May, and the plan is it'll be in London and a mid-afternoon event followed by an opportunity for a chat afterwards. So very much hope to see you all there. Thank you very much for joining. Take care. Bye-bye.