Good morning, and welcome to the Galliford Try trading update. My name is Charlie, and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can do so by pressing star followed by one on your telephone keypad. I'll now hand over to your host, Bill Hocking, Chief Executive, to begin. Bill, please go ahead.
Thanks, Charlie. Good morning, everyone, and thank you for joining us. Bill Hocking here, Chief Exec, and I'm here with Andrew Duxbury, Finance Director. You've all seen the training update, I'm sure. I don't intend to talk through it, just, take you to a few of the highlights. In a nutshell, the first half has seen us trading in line with our expectations. We managed to deal with the dramas of last, second half of last, calendar year, well, with no material impact on our trading. That gives us confidence for the full year to the end of June. Balance sheet remains really strong. Cash held up well in the period with GBP 154 million of average monthly cash, which we're really happy with.
The order book is looking good at GBP 3.5 billion. It's a good quality order book. We like everything that's in there. It's got a good risk profile, and it supports our margin aspirations. More importantly, we continue to see a good pipeline of opportunities coming through. There's been no diminishment at all, despite what you see in the press so far. That's holding up well. The share buyback is going along. Andrew can actually go into that in a bit more detail if he wants to later. Overall, performance in the first half has been good, and demonstrates good progress against our overall targets for the year. That's it. Those are the highlights, everyone. I think it's probably best if we just go straight to questions.
Thank you. If you'd like to ask a question via the telephone lines, you can do so by pressing star followed by one on your telephone keypad. If you choose to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. As a reminder, that's star followed by one on your telephone keypad now. Our first question comes from Andrew Nussey of Peel Hunt. Andrew, your line is open. Please go ahead.
Yeah. Morning, Bill. Morning, Andrew. A couple of questions from me relating to that pipeline, which obviously you describe as robust. I wonder, are there any particular areas of relative strength over the next 6 - 12 - 18 months that you could draw out? Secondly, just with that bid pipeline and what you're seeing, your ability to maintain the rigor around the whole sort of risk assessment process and what you look to pursue.
I mean, I'd say that the pipeline across the piece is holding up pretty well, actually, Andrew. We've seen in the statements, we've had good success with the custodial sector recently with Rye Hill. The education sector is holding up well. We've had quite a few awards of late in that. Those two, I suppose, jump out immediately. I'd say across the piece, all of our pipelines are holding up pretty well. In roads, there's been a bit, you know, we've got the two A47 projects, two of which have got the DCO, the consent from the government to proceed, but have been held up by a legal challenge on the carbon calculations or something. That's, that's fairly common. I think most of the tier ones or most of the roads in the National Highways program are under that at the moment.
They've really been knocked back once, by the way, there have been appeal, and I think that... I'd say by the half year, by our full year, the half come the end of June, we should have an outcome on those, and we're positive that it'll be a good outcome for us. In roads, we've made a bit of a hiatus based on that challenge, but apart from that, the pipeline looks pretty robust. As I said before, we've seen no diminishment in the type of work coming through that fits the bill for us. That means on a risk basis, there's been no change at all, in our attitude to risk and the type of work that we're doing and don't do.
That's great. Thank you.
Thanks.
Thank you. As a reminder, if you wish to submit a question, please press star followed by one on your telephone keypad now. Our next question comes from John Fraser-Andrews with HSBC. John, your line is open. Please go ahead.
Morning, Bill Hocking, Andrew Duxbury. A couple from me, please. The first one is, can you elaborate on the commercial sector, the private end of your customer base, please, Bill Hocking, what you're seeing, how the pipeline's looking on that front? It's clear that the public regulated sectors are strong. The second question is on margin. You know, are you seeing competitors remaining disciplined, and given your own order book and framework bias, I imagine there's no change in strategy there, and hopefully margins are moving ahead. Is it the key for Galliford Try that an increasing proportion of your work is on an upwards margin trajectory?
Morning, John. The commercial sector actually tend to look through hiatuses and the issues. We've seen one of our clients in London, for example, going ahead full steam ahead because they see that, you know, by the time a building is built in, you know, two years, the typical sort of gestation period, that we're through all of this and they'll be demand will have come back. We came to see that the commercial private sector clients tend to look through these sorts of issues and look through to better times beyond. We've seen I think the commercial clients workers now, all of them, I'd probably buy one or going ahead regardless, I suppose.
On margin. Well, I've seen no sign of competitors doing anything daft personally. I think more importantly, John, the clients that we work for don't want to contract us doing daft things. I think that's the important thing, is that our clients are far more intelligent about how they procure, and they don't want to procure for, you know, for trouble down the line. That means that our strategy in terms of our risk profile and type of work that we go for and our margin expectations is absolutely in line with our 3% aspiration.
Understood, Bill. Perhaps I can have another one and ask you to just update on where you're seeing the additional revenue targets that you've got in both the sort of more advanced assessment of facilities in water that you've made with the recent acquisitions. Any moves you're making in sort of facilities management, and also in PRS, whether those projects are still flowing, you know, regardless of what's happened in the fourth quarter and the disruptions in the cost of money?
Well, certainly, John, in water, we're doing well. The sort of growing MCS and Ham Baker into the business of the company is going well, and those people are being integrated. We've won our first capital maintenance framework, which we announced a while back in Welsh Water, two frameworks in Wales on the capital maintenance side. We're starting to see, well, maybe not momentum in those first two, but we add those to the ones we've already got, and we look forward to AMP8, and we can see that with the acquisitions, and the, I suppose the broad coverage we have across the water industry through the nmcn acquisition, we see momentum starting to build for AMP8. AMP 8 clients are already consulting with the market and we've got a number of meetings as we speak with our water clients looking to help them in their AMP 8 planning.
That's all positive. On the water side, we're happy with the way we're going there. It's going well. You know, because of the AMP cycle, it does sort of a little accelerating to AMP 8. You know, it will take a little bit of time on the capital maintenance side. On the PRS side, we did see a bit of a pause. That's the one commercial sector pause we did see last year after the political debacles. Again, we see those clients now looking through that and one of our commercial clients now is pressing ahead with their plans for PRS. There was a bit of a pause there, and that was around the cost of money and things like that. Certainly the one client that we work with at the moment is seeing through that and carrying on.
I imagine on those, Bill, any adjustment in market pricing is the landowner's problem as opposed to yours. You won't be compromising on margin on those PRS schemes of what you bill for them in the forward-
That's absolutely right.
Your forward funding.
That's right. The hurdles remain exactly the same for us. The only variable at the end of the day is, as you say, probably the land, but that's not of our issue.
The fundamentals of that market as you look through the short term issues remain, you know, absolutely as strong as they were when you spoke about it in the past.
Yeah. Thanks. Thanks, chaps.
Thanks, John.
Thank you. As another reminder, if you wish to submit a question, please press star followed by one on your telephone keypad now. Our next question comes from Alistair Stewart of Shore Capital. Alistair, your line is open. Please go ahead.
Morning all. Actually, John and Andrew have taken most of my questions. Just a couple of vague ones. First one, are you seeing any new markets emerging that you've not really emphasized before? That's more of a covered question. The other one is a number of the house builders have been talking about letting go some of their supply chain, some of their direct staff. Are any of them transferable into your operations?
Yeah. Hi, Alistair. Hi. No, I mean, we seem to be looking. We're not looking at any new markets, that's for sure. I think the one market that is part of our strategy that is gaining traction a lot is the new retrofit market. We've seen a lot of action at the moment, mainly in the public sector, in how to, you know, green the public sector estate. That is one thing that is supportive, in terms of our strategy and the group net, of course. The house builders, yes, they are pausing a bit here and there, and the only impact that we've seen of that, I think, Alistair, is in a bit more perhaps competition, in some trades. So, you know, bricklayer, the house, typical house building trade.
The bricklayers and perhaps the dry liners, we're seeing a bit more competition in that market now than we go up. That's the only sign that we've seen of that so far.
Yeah. Just on the actually what and on house builders and getting back to what John was asking, you know, if you see land values coming, your former chief exec was suggesting a few minutes ago, it's easy to because that's a PRS, much planning has to involve that.
Well, I don't think so. The sort of the house builder type, land isn't suitable for PRS generally.
Yeah.
PRS is generally city center brownfield stuff.
Yeah. All right. Great. Thanks so much.
Thanks, Alistair.
Cheers. You're welcome.
Thank you. At this time, we currently have no further questions. I'll hand back over to Bill for any closing remarks.
Okay. Thanks, Charlie. That's good everyone. It means our update was nice and concise. Thank you very much for joining, and we look forward to seeing you again in March. Take care, everyone. Bye-bye.
Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.