Delivering
Sustainable
Growth
Galliford Try Holdings plc
Annual Report and Financial Statements 2022
Galliford Try Holdings plc Annual Report and Financial Statements 2022
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About us
Galliford Try is one of the UK's leading construction groups,
working to improve the UK’s built environment and
delivering lasting change for the communities we work in
Read more
&
We are a people-orientated,
progressive business,
driven by our values
Visit our Results Centre to watch our results presentation
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About Why us Sectors Sustainability Careers Investors News
Strategic report
2 Our business model
6 Our investment case
8 Chairman’s statement
10 Market review
12 Our strategy
16 Chief Executive’s review
20 Operating sustainably
43 Risk management
48 Task Force on Climate-related
Financial Disclosures
55 Financial review
58 Operating review
61 Stakeholder engagement and
s172(1) statement
Governance
66 Chairman’s review
68 Directors and Executive Board
70 Governance review
82 Nomination Committee report
84 Audit Committee report
87 Remuneration Committee report
90 Directors’ Remuneration Policy report
95 Annual report on remuneration
100 Directors’ report
103 Statement of directors’ responsibilities
Financial information
104 Independent auditor’s report
110 Consolidated income statement
111 Consolidated statement of
comprehensive income
112 Balance sheets
113 Consolidated and Company statements
of changes in equity
114 Statementsofcashows
115 Notestotheconsolidatednancialstatements
150 Five-year record (unaudited)
151 Shareholder information
Contents
Pre-exceptional earnings per share
1
16.0p
(2021: 9.5p and 2022 statutory earnings
per share 5.8p)
Dividend per share
8.0p
(2021: 4.7p)
Average month-end cash
£174m
(2021: £164m)
Order book
£3.4bn
(2021: £3.3bn)
Revenue
£1, 237. 2m
(2021: £1,124.8m)
Pre-exceptional prot before tax
1
£19.1m
(2021:£11.4mand2022statutoryprot
before tax £5.4m)
Divisional operating margin
1
2.4%
(2021: 2.0%)
Pre-exceptional operating
prot before amortisation
1
£18.5m
(2021: £10.1m)
1 See note 32 for our alternative
performance measures.
Focused risk management
Our established approach to risk
management has laid a strong platform
for our strategy to 2026 and continues
to underpin our future ambitions.
Safety above all
We are committed to prioritising the
health, safety and wellbeing of our people,
and those around us, aiming for no harm.
Drivers of market growth
Our chosen markets remain favourable
andwearewellplacedtobenetfrom
sustained investment in the UK’s economic
and social infrastructure.
Built-in sustainability
Our sustainability commitments are built
into our strategy, allowing us to be more
efcient,winworkandengagewithour
employeesandsupplychain,whilebeneting
the community and environment.
Key sections of our report
Financial performance
1
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
A dening purpose
leading us forward
“We have made an excellent start to our
Sustainable Growth Strategy, delivering risk
managed controlled growth, and it’s exciting to
be at the forefront of the vital role construction
is playing in the future of the UK.
“The great thing about our strategy is that all our stakeholders’ interests are
aligned. We are contributing to the decarbonisation of the economy, unlocking
the potential of digitalisation to drive efciency, and working in partnership
with our supply chain to deliver for our clients and communities.
“With our passionate teams, strong balance sheet, market-leading sector
positions, excellent client and supplier relationships and high-quality order
book, we are excited about the future and look forward with condence.”
Bill Hocking
Chief Executive
Excellence
Striving to deliver the best.
Passion
Committed and enthusiastic
in all we do.
Integrity
Demonstrating strong
ethical standards with
openness and honesty.
Collaboration
Dedicated to working
together to achieve results.
Our values
Our vision
To be a people-orientated, progressive
business, driven by our values to deliver for our
stakeholders and the communities we work in.
Our purpose
To improve people’s lives by building the
facilities and infrastructure that communities
need, while providing opportunities for our
people to learn, grow and progress; working
with our supply chain to promote the very
best working practices; and caring for the
environment in which we work.
2
Galliford Try Holdings plc
Our business model
A progressive UK
construction business
We are proud to deliver vital buildings and infrastructure across
the country that make a real difference to people’s lives.
What we do
We are a major construction group, operating as
Galliford Try in England and Wales, and Morrison
Construction in Scotland. Our network of regional
ofces is a key advantage, offering clients the benet
of national strength with local delivery. We are
focused on markets where we have proven
strengths, operating predominantly in the public
and regulated sectors.
Building
operates across the UK, designing, constructing and refurbishing assets across markets
where we have proven expertise and signicant opportunities, particularly the education,
health, defence, justice and commercial sectors.
Infrastructure
comprises our Environment and Highways businesses, which carry out vital civil engineering
projects across the UK. Environment covers the water and sewage sectors, where we are one
of the largest players and carry out capital delivery and maintenance, and asset optimisation.
Our work in Highways has contributed substantially to the national infrastructure network,
from major project delivery of large-scale schemes to delivering road surfacing works and
maintenance as a leading player.
Investments
has historically specialised in managing construction through to operations for major building
projects via public private partnerships. These skill sets are now being used to progress
co-development opportunities, with a focus on the PRS (Private Rented Sector). Our expertise
in leading bid consortia and arranging nance to devise and secure the right solution on an
individual basis makes us attractive to clients.
Facilities Management
works with Building, with an emphasis on the education and health sectors. Our capabilities
include delivering high-quality, full life-cycle solutions to our clients, including green retrot.
3
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Who we work with
We primarily work with clients in the public and
regulated sectors, where we have core and proven
expertise, based on a strong understanding of client
requirements, the market and risk prole. We focus
on education, defence, health, justice, highways and
environment, as well as the commercial sector.
We seek clients who value a collaborative approach and long-term
relationships, for example by working in frameworks. Frameworks are
a multi-year procurement vehicle used by public and regulated sector
clients which provide greater opportunities for deeper, collaborative
working and support the achievement of wider strategic and social
goals, better understanding between parties, early mitigation of risks
and ultimately repeat business.
91%
of our order book is in the
public and regulated sectors.
94%
of our order book is with
repeat clients.
90%
of our order book is
in frameworks.
Our business model
continued
How we do it
Stages of a typical construction project
Identifying and
bidding opportunities
We seek opportunities within our
chosen markets and only pursue
those where we have the expertise
and resources to successfully
complete the work safely,
protably and to a high quality.
Our initial selection process
considers factors such as
geography, client, size of the
project, technical complexities and
our experience of similar projects.
Contracts meeting this criteria
are interrogated by our teams to
ensure we fully understand and
can meet client requirements.
They are ltered through our
risk-based heat map which
facilitates a rigorous assessment
of risks to ensure all aspects of a
contract including terms and
conditions satisfy our strict
criteria. All contracts with a value
exceeding £25m, and lower value
contracts with specied risk
parameters, require Executive
Board approval.
Early engagement
Depending on the contract, we
may be involved in the design.
These contracts, called Design
and Build, are different from
traditional contracts, where the
client appoints consultants to
design their scheme and a
contractor is selected to execute
the works. Design and Build
contracts can provide greater
opportunities for selecting building
features, systems, equipment and
materials which deliver lower life
cycle cost or carbon emissions
and shorter programmes
while meeting the required
performance, quality, reliability,
and safety requirements.
Assembling a team and
procuring products
and services
Delivering a construction project
requires many different disciplines,
some of which are specialist. This
is because it is unlikely that any
one contractor will have all the
required skills to complete every
aspect of a construction project.
Our role includes assembling
the right team, including
subcontractors, and sometimes
consultants, to carry out specic
aspects of works such as
mechanical and electrical work.
This phase also involves other
preparatory processes before
mobilising on site, such as obtaining
permissions and permits. It is
about further reducing risk,
improving productivity, selecting
partners, and digitally testing
the solutions to improve health,
safety and quality and eliminate
waste. Early procurement also
mitigates risk.
Construction
This phase consists of all the
physical processes of building,
landscaping or refurbishing a
project in addition to mobilising
teams and services such as power
and utilities. It includes erection
of hoardings and welfare facilities,
site clearance, demolition or
remediation works, site
preparation, excavation works,
installation of foundations,
frame construction, civil
engineering works and t out,
where applicable. It can also
include rebuilding work and
alterations or additions to
buildings or infrastructure.
A key part of this phase is ensuring
the project’s performance is
controlled to ensure that it is
running safely, on schedule
and within budget. Day-to-day
supervision from a project team
is required to set and track
progress, resolve any challenges
including unforeseen events such
as extreme weather, supply or
labour issues, and make any
required adjustments.
Documentation, digital tools and
communication are vital within
this phase as they enable the team
to monitor performance against
programme expectations as well
as providing a blueprint of what is
required in the nal product.
Diligent planning in the early pre-construction phase goes a long way in ensuring
that construction takes place on time, to budget and to a high quality.
4
Galliford Try Holdings plc
High-quality revenue
We target lower-risk contracts with clients that typically comprise:
Target cost/cost reimbursable
where an overall target contract
value is agreed with the client, including margin, risk and ination
contingencies, and the actual cost of the work plus an agreed fee is
paid by the client. Any cost savings or overspends against the target
are shared between the client and contractor.
Fixed-price
where the nal price and programme is negotiated on a
sole basis following early involvement, resulting in a xed-price for a
dened scope at point of nal contract award.
In addition to construction projects, we earn revenue and prot from
our PPP Investments and Facilities Management businesses, which offer
lower-risk annuity type income and margin accretion.
Good capital management
Our business is typically cash generative, as we receive regular
payments from clients as projects progress. We are well-capitalised
with a strong balance sheet that benets from a robust cash position
and a PPP asset portfolio, giving clients and our supply chain condence
in our ability to partner with them.
Our business does not require signicant investment in xed assets
or working capital. We therefore deploy a modest amount of cash
for ongoing investment in the business and for investing in PPP,
co-development or green retrot projects.
Our capital allocation and dividend policy is set out in the Financial
review (page 55).
How we make money
We aim to generate a return for
shareholders by operating a protable
and sustainable business. We make a prot
by carefully selecting the work we take on
and executing it well.
Handover
Before completion of a project,
nal inspections are made. The
project is then approved by the
client and a nal completion
certicate is issued, conrming
the project has been handed over
in a satisfactory manner. In some
instances, we may also take on
the maintenance of the asset.
5
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Our investment case
A compelling
investment
Our leading positions in thriving markets,
strong foundations and a progressive
culture provide an engine for growth.
High-quality
order book
Our people
Good visibility
of pipeline
Strong
balance sheet
Strong culture
of discipline
and risk
awareness
6
Galliford Try Holdings plc
Strong balance sheet
Performing consistently and predictably in this
way provides us with a strong balance sheet.
This is important to clients as they prefer to
work with contractors who can deliver for them in
the long term and it provides further condence
to our supply chain who look to partner with
businesses that can pay them promptly. Balance
sheet strength means we can invest in our
people, technology and business to develop our
capabilities. Finally, a strong cash balance gives
us agility and enables us to react quickly to
strategic opportunities, including bolt-on
acquisitions aimed at enhancing our capabilities
and driving up margin. Coming full circle, a strong
balance sheet enables us to reinforce our culture
of being selective about the work we pursue,
so the cycle continues, delivering a compelling
investment proposition.
High-quality order
book and good visibility
of pipeline
Being selective about the work we take on and
focusing on bottom line growth over revenue
drives a high-quality order book which is
characterised by its quantum; longevity through
frameworks; a repeat client base who we
know and can work collaboratively with; and
embedded cash and margin proles. This leads
to work we can execute with a high degree of
condence in addition to pipeline visibility, which
enables us to effectively resource projects with
our people and supply chain. This approach
underpins our strategy and facilitates controlled
growth, generating long-term shareholder value.
Strong culture
of discipline and
risk awareness
Our approach to running a good construction
business that can perform consistently and
predictably revolves around the right people,
who share our purpose, values and objectives.
We have a strong culture of discipline and risk
management and only pursue opportunities
where we have the skills, resources and contract
terms and conditions to be successful. This is
complemented by our incentive models, which
mirror our attitude and are predicated on prot,
cash and Environmental, Social and Governance
(ESG) measures.
7
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Read more p17 and 43 Read more p59
This is my last report to you as
Chairman of Galliford Try and
I am pleased to be handing over
to Alison Wood with the Group
in a strong position.
During the year, we beneted
from the successful
implementation of our
Sustainable Growth Strategy,
achieving further controlled
growth, and remaining rmly
on track to meet our nancial
targets to 2026.
As a result, pre-exceptional prot before
tax was up 68% to £19.1m (2021: £11.4m).
The Group has maintained its nancial strength,
with a net cash balance at the year-end of
£219m (30 June 2021: £216m) and an average
month-end cash balance during the year
of £174m (2021: £164m). In these times,
the strength of our balance sheet continues
to differentiate us in our markets.
Enhancing shareholder returns
In my report to you last year, I said that our
policy was to target a dividend cover range of
2.0-2.5 times. At the interim results in March
2022, we announced an improved policy,
with the aim of annual earnings covering the
dividend by 2.0 times. Having paid an interim
dividend of 2.2p per share, up 83% on the 1.2p
per share paid in the prior year, the Board has
proposed a nal dividend of 5.8p per share
(2021: 3.5p per share). The total dividend for
the year is therefore 8.0p, up 70% and in line
with the 2.0 times cover policy.
The enhancement to the dividend policy
reects the Board’s condence in the Group’s
performance and outlook, and its strong
balance sheet. The Board previously committed
to monitor the Group’s cash position, and
consider, where appropriate, additional capital
returns. On 21 September 2022, we announced
an initial share buyback programme to
repurchase up to £15m of ordinary shares.
Chairman’s statement
Condent in our strategy
8
Galliford Try Holdings plc
A successful and sustainable strategy
The strategy we set out last year is delivering as
we expected. In conjunction with management,
the Board has reviewed the strategy and our
progress against it throughout the year and this
has reafrmed our view that the strategy is the
right one for Galliford Try.
In the rst half of the year, we strengthened
our Environment business with the acquisition
of nmcn water, which has been successfully
integrated within our Group. The purchase
was in a space where we had been looking to
grow and we are now one of the largest players
in this sector. On 8 July 2022, we acquired
MCS Control Systems, a leading systems
integrator to the industrial and utilities sectors,
based in Coventry, West Midlands, which
again demonstrates the excellent position
of the Group and good progress towards our
strategic goals.
Environment, Social and Governance (ESG)
issues are a core part of the Board’s strategic
focus, with Board-level working groups as
described on page 70. While ESG continues
to rise up the agenda for all businesses and
their stakeholders, we believe this is an area
where Galliford Try has always been strong,
such as in our long-standing approach to using
environmentally sound processes and materials.
We continue to up our game, for example in
setting net zero carbon targets for our own
operations by 2030 and for all activities by
2045. Decarbonisation is also a growth driver
for us, as we look to help clients to meet their
own carbon reduction targets.
A truly sustainable business needs to work for
all its stakeholders and the Board continues to
ensure it is well informed on their views. Our
Senior Independent Director Terry Miller plays
a key role here, as chair of both our Stakeholder
Steering Committee and our Employee Forum.
Our Finance Director, Andrew Duxbury, chairs
our Carbon Reduction and Social Value Forum
on a quarterly basis. The Board discusses
feedback from these groups. This in turn allows
the Group to successfully and sustainably
deliver for all stakeholders.
People and culture
Maintaining a positive culture is a major focus,
and Bill Hocking continues to lead initiatives
which have signicantly enhanced our
approach, including rst and foremost, an
improvement in our Accident Frequency Rate.
Our progressive culture has helped to empower
our people, giving them the exibility to make
decisions within a solid framework and with a
clear understanding of the Group’s approach
to managing risk, which is embedded at every
level of the business. There is also a strong
emphasis on personal development,
encouraging our people to learn new skills
and put themselves forward for opportunities.
On behalf of the Board, I want to thank
everyone at Galliford Try for their hard work
and dedication, which is reected in the results
we have achieved this year.
Management and the Board
There were two additions to the Board
during the year. Alison Wood joined us as a
Non-executive Director on 1 April 2022 and
will succeed me as Chair when I step down
from the Board on 21 September 2022. We
were also pleased to welcome Sally Boyle as a
Non-executive Director from 1 May 2022.
Both Alison and Sally have further strengthened
the Board’s independence and experience and
have already made valuable contributions to
our work.
Looking forward
The last few years have been a time of huge
change for Galliford Try and, as I prepare to step
down as Chairman, I am pleased to be leaving
the business in great shape and in very good
hands. The Group has a robust order book, is
performing strongly and has a clear strategy
for further growth. The Board looks forward to
the future with condence.
Peter Ventress
Chairman
A strong culture driven by our purpose:
the
results of our employee survey conrmed we
have embedded a strong culture which will
fuel our ambitions, ensuring we grow our
business the right way. As an example:
99%
of people responded favourably to the
statement that we give health and safety
a high priority.
96%
of people responded favourably to the
statement that our commitment to social
responsibility is genuine.
94%
of people responded favourably to the
statement that they are motivated by
our vision.
complementary markets:
the acquisitions
of nmcn’s water business (including Lintott
Control Systems) in October 2021, and MCS
in July 2022, have advanced our strategy of
growth in existing and adjacent markets by
increasing our geographic coverage through
established frameworks, complementing
our order book, enhancing our capabilities
in maintenance, off-site build and asset
optimisation, and adding highly sought-after
talent to our business.
Progress on carbon:
during the year we
made signicant strides in our carbon
journey, maintaining a downward trend in
our own emissions and also developing our
own capabilities. In the year, we launched our
Net Zero Partners initiative to collaborate
with our supply chain and help the industry
work together to deliver lower carbon
projects. We have also been involved in
several low and net zero carbon schemes,
including pilots for public sector clients
such as the Department for Education
(pages 30 and 37).
Highlights of the year
9
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Market review
Market opportunity
Our chosen markets remain favourable. The construction sector is expected to
benet from sustained investment as a means to drive the UK’s recovery from the
challenges of the pandemic, and to address global factors and the issue of climate
change. We have a major role to play across these areas, driving efciency through
digitalisation and off-site build and delivering wider societal value. While we remain
vigilant about the macro-economic backdrop of cost ination, resource scarcity
and geopolitical challenges resulting from the war in Ukraine, these challenges
are less pronounced across our areas of operation.
Market opportunity
Investment in the UK’s
social and economic
infrastructure
There is a drive to build a stronger economy
following the pandemic, using construction
as a way to stimulate activity and ensuring
we have the infrastructure to support the
country. The main themes of this are to
tackle regional and local inequalities through
improved facilities and better transport
links, decarbonise the built environment
and increase the UK’s productivity.
The Levelling up agenda
1
aims to lessen
geographic disparities in key services and
outcomes, such as health, education and
jobs. It recognises the key role investing in
infrastructure will have in improving lives by
bringing more places across the UK closer to
opportunity. Under the Levelling Up Fund,
£4.8bn has been set aside for local projects,
such as regeneration and transport across
England, Scotland and Wales.
The Construction Playbook
2
sets out
guidance for how public works are procured.
The Playbook (page 18) places a major focus
on social value, industry sustainability and
supply chain engagement. It favours
long-term contracting across portfolios;
standardised designs, components, and
interfaces; and innovation and MMC.
Our response
Government working across sectors
including highways, environment,
education, health and defence,
which form the backbone of the
country’s infrastructure.
Highlands in Scotland, down to Plymouth
in the South West of England which will
help us to support the levelling up agenda.
social value matches the Government’s
aims to deliver value to society.
is in frameworks, which are a key
procurement route for the delivery of
national infrastructure projects. Similarly,
91% of our order book is in the public and
regulated sectors.
decarbonisation, both by reducing our
own carbon footprint and helping our
clients to lower carbon from their projects.
construction businesses means that
we are well-placed to retrot and
optimise existing facilities so that they
have a better environmental and
operational performance.
innovation with investment in our
digital capabilities and MMC.
1 https://assets.publishing.service.gov.uk/
government/uploads/system/uploads/attachment_
data/le/966138/Levelling_Up_prospectus.pdf
2 https://assets.publishing.service.gov.uk/
government/uploads/system/uploads/attachment_
data/le/941536/The_Construction_Playbook.pdf
Our strategy responds to our markets
Market drivers
How our alignment positions us to benet
Investment in the UK’s social and
economic infrastructure
Key contractor for public and regulated sectors.
National coverage with local relationships and supply chain.
Committed to creating greater social value.
Urgency of climate crisis Net zero carbon target.
Support clients’ carbon objectives through our increasing capabilities.
Innovation
Digitalisation and adoption of Modern Methods of Construction (MMC).
THE
CONSTRUCTION
PLAYBOOK
Government Guidance
on sourcing and contracting public works
projects and programmes
Version 1.0
December 2020
10
Galliford Try Holdings plc
Market opportunity
Drive for
decarbonisation
and action on
climate change
The UK’s Ten Point Plan
3
for a Green
Industrial Revolution prioritises ‘clean
growth’ as it delivers on its aim to achieve
net zero carbon emissions by 2050, and
rebuild from the pandemic greener. The plan
involves £12bn of public spending in areas
from energy generation to building retrots.
Key initiatives include the energy efciency
of homes, schools and hospitals; protecting
the environment; ending the sale of new
petrol and diesel cars and vans by 2030 and
developing the cutting-edge technologies
needed to reach these new ambitions.
Our response
reducing our own carbon emissions and
commitment to achieving net zero carbon
across our own activities by 2030 and
all activities by 2045 are attractive to
existing and potential clients.
4
of buildings that will
exist in 2050 have already been built
and many of these will not meet the
energy efciency standards of the
buildings we are designing today.
Our capabilities in retrot and asset
optimisation enable our clients to reduce
carbon emissions and increase the lifespan
of their facilities. Overall, our clients’
ambitions to tackle decarbonisation
provide a revenue opportunity for us.
materials used in construction, known
as ‘embodied carbon’, can represent up to
half of the carbon footprint of a building
and an even greater proportion of some
infrastructure assets such as roads.
We have the knowledge to select and
transition to lower carbon materials and
manufacturing processes to reduce
embodied carbon now.
adoption of new technologies such as
design rationalisation using our Building
Information Modelling (BIM) tools
and experience helps us avoid over-
specication and reduce materials
consumed. Similarly, using MMC such as
off-site manufacture helps to minimise
waste and use materials more efciently.
Market challenge
Managing ination,
and labour and
supply shortages
In the last year, we have been operating in
an inationary environment, which is forecast
to continue for the foreseeable future.
pandemic has caused delays in the delivery
of supplies, as well as increased costs.
high demand across the UK.
Our response
with key suppliers and subcontractors
by giving them an insight into our pipeline,
paying them promptly and offering them
training and resources, for example
through our Advantage through
Alignment scheme, our behavioural safety
programme, membership of the Supply
Chain Sustainability School and our newly
launched Net Zero Partners initiative. This
leads to mutual benets and ensures we
remain a priority customer for our supply
chain during times of heightened demand.
of product availability during times of
higher demand. We maintain matrices of
key materials to ensure we are aware of
any materials shortages or longer lead-in
times and ensure we plan effectively to
mitigate any potential delays. These
processes are stepped up during times of
shortages. Ination is also assessed and
managed during bidding.
as building protections into our contracts
and procuring materials early to mitigate
against rises in ination and building in a
degree of tolerance.
development activities ensure we have the
skills we need to carry out our operations.
Our graduate and apprentice programmes
allow us to build our own talent pool.
Succession planning enables us to meet
the future needs of our business with less
likelihood of disruption to operations.
including initiatives such as agile working
and our focus on wellbeing, make Galliford
Try a more attractive employer and will
help us to appeal to a more diverse
audience, broadening the pool of potential
recruits and supporting retention.
industry to school and college leavers,
graduates and experienced people
through school presentations, visits to our
sites and careers exhibitions, helping to
encourage a career in construction for
future generations. Our approach breaks
down stereotypes of the industry and
presents it as an important enabler of
the UK’s plans for the future.
3 https://www.gov.uk/government/publications/
the-ten-point-plan-for-a-green-industrial-
revolution/title
4 UK Green Building Council.
Pictured, our Education
Director Claire Jackson
took part in a panel event
focused on targeting
zero carbon in school
buildings at Education
Estates, using our work
at Greenhead College
(page 30) as an example.
We shared our insights on the future of
the water sector, against the backdrop
for water service delivery, supply chain
challenges from Brexit and the
pandemic, the economic environment
and the drive for sustainability as part
of a new report produced by the Water
Industry Forum (WIF), entitled The
optimal delivery model for AMP8.
11
Annual Report and Financial Statements 2022
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Financial information
Our strategy targets sustainable growth
across revenue and margin. Our focus is on
margin growth, with revenue targeted where
markets support growth. Growth will be
achieved by:
markets within Highways, Environment
and Building by growing in our
existing geographies.
Why?
We understand these markets and their
risk proles and are already working
in these sectors, predominantly in
frameworks. We have the potential to
grow within these areas by bringing all
of our business units up to critical mass.
complementary and adjacent markets
and has three main strands:
i) Private Rented Sector (PRS).
ii) Green retrot.
iii) Capital maintenance and asset
optimisation within the existing
Environment sector (page 14).
Why?
These are all higher-margin activities and
will contribute considerably to our margin
growth targets. The nature of the work is
complementary to our existing capabilities,
we are present in these markets across
the UK, and they have risk proles within
our appetite.
We will improve our margin by continuing
with sustainable fundamentals of a focus on
risk management and disciplined contract
selection, targeting a high-quality order book,
investing in our people, and embracing
digitalisation and MMC.
Our strategy
Sustainable Growth
Our strategy is to deliver high-quality buildings and infrastructure in a socially
responsible way and provide a sustainable return for our shareholders.
Targeted sustainable revenue
and margin growth to 2026
from a basis of FY21.
2026
targets
FY21
Revenue
£1.1bn
Divisional
operating margin
2.0%
Adjacent markets
Existing markets
Revenue
£1.6bn
Divisional operating margin
3.0%
12
Galliford Try Holdings plc
Strategy in action
We continue to
target frameworks
A framework is a collaborative agreement between
client and contractor to deliver a programme of works
through a stable, long-term partnership, allowing
strategic planning, continuous improvement and
enhanced project outcomes. A framework can generate
millions of pounds of work over its duration.
Why do we target working as part of a framework?
established and well-understood terms and conditions.
cost of tenders.
project teams.
value-adding and social outcomes.
Examples of key frameworks include the Department for
Education’s school building framework (six lots); Crown
Commercial Service (CCS) Capital Works Framework, including
ProCure 23; Ministry of Justice Strategic Alliance Framework
(multiple lots); hub North Scotland; hub South East Scotland; hub
South West Scotland; hub West Scotland; National Highways
Delivery Integration Partnership; AMP7 with Northumbrian
Water, Yorkshire Water, Southern Water, Thames Water and
Severn Trent Water; Southern Construction Framework; Procure
Partnerships Framework and Midlands Highways Alliance +.
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Contractor of the Year
Our industry relies on its contractors
and supply chain partners to drive
forward best practice in construction,
innovative techniques and sustainability,
while maintaining high health and safety
and employment standards. The award
for Contractor of the Year recognises
Galliford Try’s commercial success,
agenda-setting innovation,
environmental stewardship and
workforce best practice.
Water Industry Awards Judges 2022
Our strategy
continued
Strategy in action
Developing complementary and
adjacent market opportunities
Private Rented Sector (PRS)
We already build PRS schemes for private sector clients. By
co-developing or developing our own schemes, we can benet
from development margins as well as construction margins,
which will augment the overall prot margin. We have extensive
experience and knowledge of this sector and understand the
opportunities and challenges well.
Green retrot
The UK Green Building Council estimates that 80% of the buildings
that will exist in 2050 have already been built and many of these
won’t meet the energy efciency standards of the buildings we are
designing today. The combined skills of our Facilities Management
and construction businesses positions us well to retrot existing
building stock to support our clients as they seek to reduce their
energy use and carbon footprint.
This is a big focus of the Government’s decarbonisation strategy
and a signicant market opportunity, again representing higher
margin work for our business.
Environment business
Our Environment business is one of the largest players in the
water sector. We deliver design and build work for 10 out of the 11
major water and sewage companies in the UK, where our national
footprint and established client relationships are a key advantage.
As the water industry looks to invest in its ageing asset base,
where existing plant and equipment is in need of investment
through building, refurbishing and maintaining assets, this gives
us an excellent base from which to grow.
Most of our work currently centres around designing and
commissioning water and wastewater facilities, and a natural
next step is to maintain and optimise the performance of those
facilities. The acquisitions of nmcn water (including Lintott Control
Systems) and MCS Control Systems, have advanced this plan as
they extend our capabilities in design and MEICA (Mechanical,
Electrical, Instrumentation, Control and Automation), asset
optimisation and capital maintenance, respectively which will
drive growth with higher margins.
10
We deliver design and build work for 10 out
of the 11 major water and sewage companies
14
Galliford Try Holdings plc
Delivering sustainable growth
A progressive
culture
Socially
responsible
delivery
Quality and
innovation
Strategy
Deliver high-quality
buildings and
infrastructure in a socially
responsible way and
provide a sustainable return
for our shareholders.
Sustainable
nancial returns
A people-orientated,
progressive culture driven
by our values.
Health and safety:
prioritising health,
safety and wellbeing
and ensuring no harm
to anyone linked with
our operations.
creating an inclusive
environment and
progressive culture that
enables all individuals to
reach their potential.
Deliver excellence
for our clients.
Clients:
delivering
lower carbon,
superior buildings and
infrastructure with a
better social footprint
for clients in our chosen
markets through a
focus on innovation,
digitalisation and quality.
aligning
our supply chain
with our culture and
creating collaborative
relationships that deliver
best practice, innovation
and sustainable
outcomes for clients,
communities and
the environment.
Protect the environment
and create greater social
value for communities.
Environment and
climate change:
adopting
sustainable resourcing
and consumption
practices and taking
measures to mitigate
carbon production
and climate change to
protect our environment
and biodiversity.
Communities:
making a
positive impact in
communities where
we operate by delivering
greater social value and
improving lives.
Earn a sustainable return
on the value we deliver.
Taking a disciplined approach to
selecting the work we take on and
carefully managing risk at every
stage of the project.
Delivering strong, predictable cash
ows and margin improvement.
Generating increasing
shareholder returns.
Objective
KPI
FY21
FY22
2026 target
Sustainable nancial returns
Earning a sustainable return
on the value we deliver.
Focus on bottom line
margin growth
Divisional operating
margin
2.0%
Divisional operating
margin
2.4%
Divisional operating
margin growth to
3.0%
Disciplined contract
selection and
sustainable
revenue growth
Revenue
£1,125m
Revenue
£1,237m
Revenue growth
towards
£1.6bn
Maintain strong
balance sheet
Average
month-end cash
£164m
Average
month-end cash
£174m
Operating cash
generation
Sustainable dividends
Dividend cover of
2.0x
Dividend cover of
2.0x
Dividend cover of
2.0x
Our nancial KPIs for our strategy period to 2026.
The non-nancial targets of our Sustainable Growth Strategy are included in the Sustainability section from pages 20 to 42.
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Financial information
Our full year results
demonstrate excellent progress
towards our Sustainable Growth
Strategy, delivering risk
managed controlled growth on a
strong foundation of discipline
and risk management. We have
made progress in all our target
areas and are well-positioned
to build on that momentum.
Performance on track with revenue
and margin growth
We have made an excellent start to our strategy
thanks to our solid foundation of excellent
people, a strong balance sheet, market-leading
positions in our chosen sectors, collaborative
client and supplier relationships and a
high-quality order book.
We are making progress across our key
performance indicators (page 55) and we
have momentum in the business which is
reected in our results. Margin progression
from 2.0% to 2.4% from the same period
last year demonstrates the quality of our order
book and our business practices. The increased
dividend of 8.0p, up from 4.7p last year, is a clear
measure of our improved performance.
Our order book of £3.4bn remains selective,
focused on our strengths and aligned to our risk
appetite (page 44). It does not yet reect the
addition of MCS Control Systems, which was
acquired in July 2022.
Chief Executive’s review
A strong start
to our strategy
16
Galliford Try Holdings plc
Our excellent cash position holds and we
had £174m of month-end of cash on average.
Not once in the last year did our cash balance
fall below £100m. In addition, we have £48m
of PPP assets, no debt and no dened benet
pension fund. The strength of our position gives
condence to our clients, who can be assured
of our ability to deliver. It is also important to
our suppliers and subcontractors, enabling
prompt payment and helping to mitigate
supplier-liquidity issues, which have impacted
some businesses during the pandemic. Through
our strong relationships, and collaboration
with our supply chain, we have effectively
managed the challenges of ination on materials
and labour and produced a great result that
exceeds expectations.
Looking ahead, the Government’s investment
in the rebuilding of the economy supports
growth in our core markets.
Our excellent performance and positive
outlook give us condence as we go into the
new nancial year and I thank all our teams,
supply chain partners and clients for their
relentless efforts in keeping our projects safely
on track and enabling us to deliver a good result.
Delivering Sustainable Growth
In order to deliver sustainable nancial returns,
our strategy focuses on a progressive culture,
socially responsible delivery, and quality and
innovation to deliver sustainable nancial
returns, as detailed on pages 20 to 42:
A people-orientated,
progressive culture
Health & Safety
The health, safety and wellbeing of our staff,
subcontractors, suppliers, clients and the public
remains our top priority and we will not rest
until we have achieved our goal of no harm.
Our safety programme Challenging Beliefs,
Affecting Behaviour is the backbone to this,
centering on the belief that nothing we do is
so important that we cannot take the time to
do it safely. This was reected in our employee
survey, where our highest scoring area was
health and safety, with 99% of respondents
stating we give health and safety high priority.
Our approach delivered an improved Accident
Frequency Rate (AFR), which fell to 0.06 (2021:
0.08) and was zero across eight business units.
Our People
To deliver our plans successfully we need to
ensure we have the right talent supported
by a great culture. Our approach to this is to
retain and invest in our existing teams, while
also attracting new high-calibre people.
A key highlight of the year was achieving an
employee advocacy score of 85% (sector
average 80%), which conrms our people
recommend us as an employer. This was also
demonstrated by a stable churn rate in a
competitive market for talent, and awards
for Top Apprentice and Graduate Employer.
Early careers roles enable us to grow our own
talent and our efforts at this grassroots level are
driving improvement in our diversity. Around
6% of our population are in early careers.
We continue to work towards our aspiration
to be a destination employer by supporting
our people with personal and professional
development, exible working, an inclusive
environment, technology and a comprehensive
benets package. A social conscience is also
increasingly important to employees, so we
were pleased that 96% of our people believe
our commitment to ESG matters is genuine.
Recognising the national cost of living challenge,
we looked at how we could support our
employees and the Group agreed to make
a one-off payment in Autumn 2022 of circa
£1.0m, in total, to over 1,800 of its staff.
Socially responsible delivery
Communities
Our clients and employees value being socially
responsible, so we make sure we make a
positive difference in the locality of our projects
for the long run by purchasing local goods and
services, using local labour and engaging local
communities to leave a legacy of training and a
better economic environment as well as our
buildings and infrastructure. In the year, we
continued to develop the tools that we use to
capture and monitor the positive social value
outcomes that we are delivering to the wider
community, including the impact on the local
economy through job creation and spend
with the local supply chain, apprenticeships,
work experience, training, and volunteering.
Contractor of the Year:
we won ‘Contractor
of the Year’ at the national Water Industry
Awards for driving forward best practice in
construction, innovative techniques and
sustainability, while maintaining high health
and safety and employment standards.
The award recognised the highly successful
acquisition and integration of the nmcn
water business, and we were also nalists
for ‘Digitalisation Project of the Year’,
‘Partnership of the Year’ and ‘Customer
Initiative of the Year’.
Leading the industry for digital solutions:
our collaborative approach to BIM (Building
Information Modelling) and our knowledge
of the subject has enabled us to contribute
to the authorship of the ISO 19650 series,
as well as being active authors of industry
guidance via the UKBIMFramework.
Highlights of the year
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Annual Report and Financial Statements 2022
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In our rst year of Group-wide partnership with
the Social Value Portal, a tool which is backed
by the National TOMs (Themes, Outcomes
and Measures) Framework, which helps
organisations measure, report and enhance
their social value, we evaluated 28 projects
and assessed their combined social and local
economic value delivered to be £306m.
In addition, we increased our average
Considerate Constructors Scheme score
from 40.6 to 41.8, which exceeds the industry
average of 39.0.
Environment and climate change
Tackling climate change is an essential
sustainability priority for us as a business as well
as for many of our clients, investors, people and
regulators. Last year, we joined the UN-backed
campaign Race to Zero and pledged to achieve
net zero carbon across our own operations by
2030 and all activities by 2045 supported by
setting interim carbon reduction targets using
the Science Based Targets initiative (SBTi).
In the year, we drove down our scope 1 and 2
emissions by a further 6.3% which reects a
number of ongoing initiatives including early
connections to mains electricity supply, the
transition to mandating electric and hybrid
vehicles in our eet, more energy efcient
site ofces and welfare, and a transition to
alternative fuels.
We also invested in our own capabilities to
support clients with their objectives. Activities
included a focus on how we design, build and
maintain low carbon infrastructure and
buildings through selection of materials and
construction methodologies, operational
energy consumption and, where relevant,
end-of-life decommissioning. We established
a cross-disciplinary Carbon Reduction and
Social Value Forum to improve employee
carbon literacy, carbon calculation, reporting
and training.
Quality and innovation
Clients
The Government’s investment in rebuilding the
economy supports growth in our core markets.
Its procurement aims align with our strategy,
with the Construction Playbook and Gold
Standards demonstrating a move towards a
more mature approach to delivery where
there is a more equitable sharing of risk,
longer term collaboration and repeat
contracting relationships.
Key client ambitions are to achieve greener,
faster and better delivery. We are well
positioned to support their carbon journeys,
having made signicant strides in our low
carbon capabilities in the last two years, and
furthering that with the launch of our Net Zero
Partners Programme with our supply chain.
Faster delivery while achieving high quality is
also a key client aim. Our focus on digitalisation
is an enabler of this and investment in
identifying and acquiring innovative
technologies means we are able to take an
entirely digitised approach to project delivery,
improving safety, quality and collaboration,
while driving down carbon.
We are leading the industry with our approach
to BIM, and have authored parts of the
international standard of BIM, as well as
being one of the few contractors in the UK
with advanced knowledge in the UK
Government’s chosen standard industry
exchange scheme, COBie.
The value we bring is reected in the levels of
repeat business we receive at 94%.
Chief Executive’s review
continued
We continue to prioritise a culture of
industry-leading health, safety and wellbeing
across all our workplaces. Pictured, Project
Manager Alex Mills receives our Site Safety
Award for an exemplary safety record at
our St Marylebone Bridge SEN School in
Queens Park, London from Building
Southern Managing Director Gavin Bridge.
18
Galliford Try Holdings plc
Supply chain
Strong supply chain relationships have never
been more critical and we are pleased to be a
partner of choice. Prompt payment is at the
core of that. During the period, we paid 98% of
invoices within 60 days, exceeding the target of
95% set by the Prompt Payment Code (PPC).
Beyond payment, we have a number of
value-adding initiatives that make us attractive,
such as our Advantage through Alignment
programme which provides selected suppliers
with greater insight into our operations and
pipeline and provides access to our training
programmes. Our Net Zero Partners initiative
shares carbon insights with our supply chain.
We retained Gold status from the Supply Chain
Sustainability School, a collaboration designed
to upskill suppliers through free training and
resources covering sustainability, off-site
manufacturing and BIM.
Sustainable nancial returns
All of the aspects described above make us
more efcient, deliver a higher-quality product
and make us more protable. This enables us to
deliver a good return to our shareholders, which
we have produced again this year and look
forward to building on in the new nancial year.
Outlook
We are pleased with the progress we have
made in the rst year of our Sustainable Growth
Strategy, including the successful integration
of bolt-on acquisitions during the year. With
our strong foundations of excellent teams
and business culture, embedded processes and
a favourable pipeline in chosen markets, we
look forward to delivering controlled growth
with sustainable dividends supplemented by
additional capital returns. We are condent in
delivering our 2026 targets, backed by a robust
balance sheet strength that supports
our operations.
Bill Hocking
Chief Executive
The technology enables data capture from
the use of plant and materials, extracts
embodied carbon data from material tickets
and has brought efciencies through
purchasing processes.
Collating such meaningful data has enabled
more productive planning of work, driving
efciencies and reducing carbon impact.
This important data and learning have been
shared amongst the wider Group delivery
teams to inform decision-making on future
activities and provide operational insights
to save money and build better and faster.
Having access to this real-time, veriable
data has enabled an agile approach to
on-site operations to be taken, reduced risk
and identied immediate opportunities to
lower carbon.
Using AI and blockchain to reduce
time and cost, and improve
carbon tracking
We have deployed innovative Articial
Intelligence and blockchain technology
across various projects under Delivery
Vehicle 2 with Scottish Water, as well
as AMP7 frameworks including for
Thames Water, Yorkshire Water and
Northumbrian Water.
This revolutionary Hypervine technology
tracks and measures carbon emissions and
embodied carbon in real-time overcoming
the challenges in accurately capturing carbon
emissions data from on-site construction
operations (including people and equipment).
19
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Governance
Financial information
Our commitment to sustainability
Sustainability underpins our long-term success
as a business and is a core part of how we
operate. We monitor our Environmental,
Social and Governance (ESG) practices and
performance through a robust structure
and are committed to publicly reporting
our progress across six fundamental areas:
our people, health and safety, environment
and climate change, communities, clients,
and supply chain.
Management
The Executive Board has overall responsibility
for setting policy and monitoring our
sustainability performance as a standing agenda
item. Main Board oversight of sustainability
performance is also maintained through the
Stakeholder Steering Group and the Carbon
Reduction and Social Value Forum. These are
chaired by the Senior Independent Director,
and Finance Director, respectively.
UN Sustainable Development Goals
The UN Sustainable Development Goals (SDGs)
provide an international blueprint for how
organisations can work towards greener,
more inclusive economies, and stronger,
more resilient societies. They recognise that
economic growth must also address a range of
social needs including education, health, social
protection, and job opportunities, while tackling
climate change and environmental protection.
This belief mirrors our own and so each of our
six pillars aligns to at least one SDG. In our
report, we have outlined how our sustainability
priorities align to the UN SDGs.
Operating sustainably
Sustainability is central
to our strategy
Being sustainable helps us to win work, engages our employees, benets
communities and the environment, and makes us more efcient. This is why
our ESG commitments are an integral part of our strategy, residing at the
core of how we deliver stakeholder value.
How our sustainability pillars align to the UN Sustainable Development Goals
Our
pillars
3
6
13
5
8
10
12
4
7
9
11
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Our six fundamental pillars
Mapped to the UN Sustainable
Development Goals.
Clients
3
4
5
6
7
8
9
10
11
12
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20
Galliford Try Holdings plc
Operating sustainably
continued
Health, safety and wellbeing
People and culture
Our objective is to prioritise health, safety and wellbeing
and ensure no harm to anyone linked with our operations.
We achieve this through our renowned Challenging Beliefs,
Affecting Behaviour and Be Well programmes.
99%
of our people say we
give Health & Safety
a high priority.
21
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Governance
Financial information
Performance in the year
We were pleased to reduce our overall Accident
Frequency Rate (AFR) to 0.06 (2021: 0.08)
and achieve an AFR of zero across eight
business units. Our Lost Time Incident Rate
remained stable at 0.26. We take safety
extremely seriously and our improved result is
demonstrative of our commitment to improve
our behaviour, for example by learning from
high-potential incidents and near misses, and
continuing to promote behaviours that drive
excellence in safety.
Leading from the front
While accident rates remain the industry
standard measure of safety performance,
internally, we use Lead Indicators to drive
improvement in safety culture and behaviour
as they enable a proactive approach to the
management of health and safety. Our Lead
Indicators span six areas: Leadership,
Communication, Competence, Culture,
Contractors and Planning, which are
underpinned by our Challenging Beliefs,
Affecting Behaviour programme.
Visible leadership through site safety tours,
and an open dialogue with our site teams are a
powerful way for management to promote and
maintain safe behaviours on site by engaging
with operatives to correct poor practice and
reafrm positive behaviour. We increased the
number of director tours from 755 to 1,144 this
year. We also conducted 65,281 Safe Behaviour
Discussions (2021: 60,411).
A culture of Challenging Beliefs,
Affecting Behaviour
We were pleased to see that health and safety
featured as one of our strengths in the
employee survey conducted during the
year. 98% of our staff responded that they
understand their role in keeping themselves
and their colleagues safe, and 99% believe
that Galliford Try gives Health & Safety a high
priority. The survey results provided excellent
feedback that our ‘Challenging Beliefs,
Affecting Behaviour’ framework, which targets
no harm through a culture of speaking up,
continues to drive a strong safety culture
across the business.
Wellbeing
Wellbeing remains a core area of activity for us
and in the year we provided sessions on a range
of themes covering mental health, diet and
nutrition, women’s health, stress, dealing with
grief, and nancial wellbeing. Our approach
covered online resources, face-to-face briengs,
Employee Assistance Programmes through
phone lines and counselling, as well as our
Wellbeing Wednesday webinars.
Award-winning approach
Awards provide great recognition of our
approach. We received an Order of Distinction
from RoSPA (The Royal Society of the
Prevention of Accidents). We also earned
the prize for Health, Safety and Wellbeing
Excellence at the Construction News Awards
in September 2021.
We did not receive any prohibition or
improvement notices during the year and there
were no fatalities on any of our projects (either
our own employees or supply chain employees).
Operating sustainably
continued
People and culture
Health, safety and wellbeing (continued)
Key commitments
KPI
FY20
FY21
FY22
Ambition
Link to UN SDGs
Accident Frequency Rate
0.07 0.08
0.06
No harm
Lost Time Incident Rate
0.26 0.26
0.26
No harm
22
Galliford Try Holdings plc
Looking forward
BMS refresh – moving safety ‘to the left’
We have refreshed our Business Management
System (BMS), with the primary objective
of ensuring that health and safety issues are
considered from the very beginning of the
project lifecycle. Some of the key changes
include consulting with the Health, Safety and
Environmental Advisors earlier in the bidding
process and updating the safety guidance and
expectations we share with the supply chain
when we tender subcontract packages.
In addition, some of the key areas of focus over
the next year include:
it more impactful.
to enhance in-built safety features and
ensure equipment supports our
carbon targets.
management to ensure our standards and
approach are fully understood and applied.
controls over and above PPE.
Visible leadership through site safety
tours and an open dialogue with our
site teams is a powerful way for
management to promote and
maintain safe behaviours.
In August 2021, our Health, Safety and
Environment (HS&E) Forum identied the
need to continue with a focus on prevention
of falling objects. We commissioned a lm to
use as a ‘Toolbox Talk’ or training session
based on recent high potential incidents.
An interactive training package was
developed to meet the following objectives:
for the prevention of falling objects.
and impact of personal decisions with
reference to the Challenging Beliefs,
Affecting Behaviours Programme.
for the HS&E team to deliver.
for delivering critical health and safety
messages across projects.
The new training solution ‘Choose the
Safe Path’ was introduced to sites in
January 2022.
These interactive sessions allow the
audience to determine the outcome of the
lm by debating and choosing to do the
right thing, thereby preventing an incident.
The workshops go on to show the outcome
of not choosing the safe path. From January
to June 2022, 245 people have been through
this training, including both Galliford Try
staff and members of our supply chain. The
early feedback from the attendees has been
very positive. Headline feedback includes:
96%
of attendees would recommend the
‘Choose the Safe Path – Prevention
of Falling Objects’ session to others.
81%
of attendees rated the session as
excellent or very good.
Strategy in action
Choose the Safe Path
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Governance
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Our people
People and culture
Our objective is to create an inclusive environment and progressive
culture that enables all individuals to reach their potential.
85%
employee
advocacy score
Operating sustainably
continued
24
Galliford Try Holdings plc
Performance in the year
Employee advocacy
Employee advocacy of our business is a
powerful indicator as it measures employee
connection and commitment to our company
and its culture and goals, with higher scores
promoting better performance, innovation,
retention and attraction of talent.
employee engagement survey since
Galliford Try became a standalone
construction group.
provides a representative view from
employees, and we achieved an employee
advocacy score of 85% compared to a sector
average of 80%. This gure represents how
likely employees are to recommend us as an
employer, which helps us benchmark our
progress towards becoming a destination
company where people aspire to work.
which is made up of a number of factors
including motivation, commitment to our
vision and pride in the company, was also
above the sector average at 72%.
Early careers as a % of total employees
Early careers are the focus of many of our
recruitment activities, as they allow us to grow
our own talent and additionally give us inuence
over the diversity of our future workforce.
remain popular, with 6.1% of our population
in these positions.
us becoming one of just 58 companies
out of a participating 600, representing
1.2 million employees, to be recognised
with a Gold Award through The 5% Club’s
2021 Employer Audit Scheme. The audit
validates employers’ activities by exploring
their plans and commitments to ‘earn and
learn’ schemes, the quality of training and
development schemes and approach to
social mobility, diversity and inclusion.
recognised as a ‘Top Graduate & Apprentice
Employer’ by TheJobCrowd, a league table
based on feedback from employees, which
placed us second in their league table for
our sector and 17th best employer for
graduates and trainees in the UK, conrming
our position as a destination employer for
early careers.
Notes:
1 Employee advocacy is measured through regular employee surveys. As employee advocacy was previously
unmeasured, through our insights, we have updated our target to greater than 80%.
2 We have updated our target from a year-on-year increase to more than 8% to give a clearer signal of our ambition.
Key commitments
KPI
FY20
FY21
FY22
Ambition
Link to UN SDGs
Employee advocacy
1
Not reported Not reported
85%
>80%
Early careers as a % of total
employees
8.0%
7.2%
6.1%
>8%
2
Women as a % of total employees
22%
23.0%
21.2%
YoY increase
25
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
This included encouraging our teams to
speak up about any potential non-compliance
with our policies to line managers, senior
management, our HR or Legal teams or
through our independent, anonymous
whistleblowing facility.
Skills and development
Our business is committed to supporting
employees at all levels to full their potential.
All employees are encouraged to participate in
our Performance and Development Review
process, which takes place once a year, and is
supported by ongoing development discussions
and training. Our approach takes the shape of
Career Paths, which provide a range of options
to support employees to develop the skills they
need to build their career with us at their own
pace. Career paths are designed to support
succession planning and link to our Leadership
Framework which denes the capabilities and
behaviours that are important to us.
Complementing this is our GT Academy, an
online platform of learning and development
tools and resources, and our Lunch & Learns,
which are short, impactful webinars open to
everyone, covering topics from personal skills
development to business-specic subjects
all hosted by subject matter experts.
Women as a % of total employees
Attracting more women into our business
is key to accessing the skills we need and
promoting a more diverse culture, so for
our strategy period, we are targeting year-on-
year increase for women as a percentage of
total employees.
females across Galliford Try was 24.3%
compared to 23.0% last year excluding
nmcn water, and 21.2% including the
acquisition of nmcn water.
practices, which remain a cornerstone of
our approach, offering exibility to suit
individual needs. It goes beyond remote
working and offers our people the ability to
take advantage of a blended approach to
work, including staggered start and nish
times, job shares, compressed hours,
sabbaticals and return to work programmes.
Underpinning all of these areas, is our Retain
and Gain approach which focuses on culture,
engagement and learning and development
of our people.
Our culture
The results from the employee engagement
survey demonstrated we have the right culture.
Our highest scoring area across the survey
was health, safety and ethics, where we rated
93% and 99% of people responded favourably
to the statement that we give health and safety
high priority. The highest scores compared to
the industry were our commitment to social
responsibility at 96%, having a vision that
motivates our people at 94%, and their ability
to have a say in matters that involve them at
93%. These highlights mirror the importance
we place across these areas.
Developing and maintaining the right culture
is a fundamental strength of our business and
so we continue to place a focus on it, leading
from the top. During the year, we restructured
our inductions for new starters, so that from
the very start of their career with us, they learn
what our business represents and what we
prioritise. Our inductions are comprehensive
and comprise three sessions, the rst of which
is led by a member of the Executive Board.
They cover our business, culture, health and
safety, our business processes, strategy and
technical approach.
We refreshed our Code of Conduct which
sets out what doing the right thing means to us
by outlining our strong ethical standards and
providing a framework to ensure we behave
in a way that reects our purpose, vision and
values including our environmental, social and
governance responsibilities.
People and culture
Our people continued
The acquisition of nmcn water brought
with it a team of 967 people to our business
following a period of instability at their
previous employer. Our objective was to
quickly and effectively communicate with
the incoming employee base to ensure
business continuity and improve employee
sentiment. Actions we took included:
CEO for all staff within the rst hour of
the acquisition being completed, with
follow-up calls over the next two days.
with members from key disciplines
from the joining and existing businesses
with the objective of developing and
delivering an integration plan.
designed to introduce employees to our
business and communicate with them as
processes transitioned to Galliford Try’s.
to our business.
available for questions and updates at
regular intervals.
questions and answers for employees
joining the business.
The actions demonstrate our approach
to inclusion and ensuring individuals are
welcomed to our Group from day one.
967
people integrated into our business
Strategy in action
Successfully integrating employees
from nmcn water
Operating sustainably
continued
26
Galliford Try Holdings plc
We delivered a total of 10,588 training days
during the year (2021: 6,353), equivalent to
3.3 days per employee (2021: 2.5). The increase
was partly a result of postponed courses due
to lockdown and being able to resume delivery
of in-person training. New mandatory
programmes for commercial and project
teams also contributed to the increase.
Gender Pay Reporting
From April 2018, companies have been required
to disclose a number of specic gender pay and
bonus comparisons on an annual basis. Our last
report provided our data as at 5 April 2021,
which therefore excludes our acquired
companies in the year. For the reported year,
the proportion of males and females across
Galliford Try remained stable with 23% of our
employees being female and 77% being male.
Our mean gender pay gap remained stable at
28.8% as did our median gender pay gap at
33.8% (2020: 32.2%).
Our mean and median gender pay gaps for
our early years population are both negative,
standing at -10.8% and -7.8% respectively,
which reects the gender split of talent
joining our business at an entry level, with the
ambition of developing this talent into senior
roles over time.
Our mean and median gender bonus gaps
both reduced, from 65.5% to 49.1% and 49.9%
to 38.2%, respectively.
Cost of living
Recognising the national cost of living challenge,
we looked at how we could support our
employees and the Group agreed to make
a one-off payment in Autumn 2022 of circa
£1.0m, in total, to over 1,800 of its staff.
Looking forward
We recognise there is a resourcing challenge
across the nation and industry and have
engaged in various activities to curb the impact
of those challenges within our business. Our
approach includes a signicant investment in
resourcing activities. As well as hiring a new
Head of Resourcing, we have partnered
with a specialist consultant to help to dene
and communicate our value proposition to
different employee groups to support our
approach to retaining and gaining the talent
we need to succeed in our ambitions. This
approach segments our audiences and offers
greater insight into what key demographics
or candidate types are seeking within their
employment, what makes them stay with an
employer and why they move. It also considers
the language we use to be more inclusive,
how we present our business to target hires,
and where we advertise. For example, we
continue to develop how we use social media
platforms to promote our business to potential
employees across different demographics.
Our plans also include adding support to hiring
managers in identifying and recruiting talent
into the business.
In addition, in July 2022, we formed a
partnership with Clear Assured, a company
which specialises in the provision of inclusive
talent management. Working together, we aim
to use the Clear Assured framework to identify
and remove barriers from recruitment and
retention practices which have the potential to
exclude under-represented groups including
disabled, BAME and LGBTQ+ candidates across
the employee lifecycle. Initially our focus will
be on retaining talent, nding talent, assessing
talent and reviewing our policies and
procedures, but will move to other areas
of focus as our journey progresses.
We are proud to have been accredited as a
Disability Condent Employer for a number of
years, conrming our commitment to removing
barriers to disabled people and those with
long-term health conditions in employment.
As part of our commitment to promoting
inclusion, we started a new series which
puts a spotlight on different communities
across the UK through blogs and
interviews. The series aims to break
down barriers by educating people about
the experiences of individuals, sharing
commonalities and celebrating
differences. So far, it has included
religious festivals such as Eid, Easter and
Vaisakhi, experiences of gay men in the
construction industry as well as blogs for
women in construction.
Our posts were viewed by
71,000+
people
1,800+
people directly engaged with
these posts
Strategy in action
Promoting
inclusion by sharing
experiences
Proportion of males and females across our business at 30 June 2022
Gender
1
Female
Male
plc Board
4 4
Senior grades (A-D)
2
56
508
Total company including plc Board
737
2,740
1 Gender gures are based on employee numbers at year-end.
2 Senior grades are dened as job grades A–D which encompasses senior managers and directors,
excluding Board directors.
27
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Environment and climate change
Socially responsible delivery
Our objective is to adopt sustainable resourcing and consumption
practices and take measures to mitigate carbon production and
climate change to protect our environment and biodiversity.
96%
of our people say
our commitment
to social responsibility
is genuine
Operating sustainably
continued
28
Galliford Try Holdings plc
Performance in the year
We saw a further 6.3% reduction in our scope
1 and 2 emissions in 2021 and remain on track
to achieve our target of achieving net zero by
2030. The biggest contributor to this fall was
our reduction in the amount of diesel used to
power plant and equipment on our sites.
Our overall performance reects a number of
ongoing initiatives including early connections
to mains electricity supply, more energy
efcient site ofce and welfare cabins,
and a transition to alternative fuels.
In September 2021, we committed to providing
only electric or plug-in hybrid vehicles in our
company car eet. As at 30 June 2022, 51% of
the 1,122 vehicles in our company car eet
were electric or plug-in hybrid and the average
emissions per vehicle reduced to 60.1g/km
(as at 30 June 2021: 77.9g/km).
Our waste intensity increased in the year,
reecting the project mix, with a greater
proportion of higher waste intensity projects.
However, waste continues to be an area of
focus, with increased use of MMC, especially
off-site manufacture, reducing the volumes of
waste produced. We also manage our waste
streams to maximise recycling and minimise
waste to landll and have increased the
proportion of waste diverted from landll
to 96.3% (2021: 94.5%).
Education is a large part of awareness, and
during the year, we delivered 251 training days
covering environment (2021: 304).
Carbon Reduction and
Social Value Forum
We have established a Carbon Reduction and
Social Value Forum, which reports into the
Director of Risk and Sustainability and is
chaired by our Finance Director on a quarterly
basis. Its purpose is to oversee the initiatives
being developed and delivered across the
different areas of our journey to net zero.
These include:
Net Zero e-learning module to equip all our
staff with literacy in the key carbon reporting
concepts and terminology, and to provide
them with an understanding of our carbon
reduction ambition and how they can
support us in achieving it.
integrated with our existing BIM tools to
model the embodied and operational carbon
of building and infrastructure designs.
This is allowing us to support our clients by
identifying opportunities to make different
design choices to improve the energy
efciency of the asset in use or reduce the
embodied carbon in the materials used.
embed carbon reduction targets and
principles into the business-as-usual
project delivery process.
Partners supply chain engagement initiative,
with the aim to help upskill our supply
chain partners and equip them to support
us in delivering low carbon buildings
and infrastructure.
accelerate the adoption of good practice
across our projects and support the
transition to diesel-free construction sites.
1 Carbon dioxide equivalent emissions are reported by calendar year, therefore the emissions reported for
FY22 relate to the calendar year 2021. Since 2014, our reported emissions have been externally veried to
the ISO 14064-3 assurance standard.
2 In 2020 and prior years, the emissions associated with business use of company cars where the employee
purchased the fuel and was reimbursed through an expenses claim were reported under scope 3 – business
travel. In 2021, these emissions have been reported under scope 1 in order to be consistent with the reporting
of emissions from company cars where the fuel is paid for by a corporate fuel card. To aid comparison with
earlier years, the data for 2019 and 2020 has been restated using the methodology used for 2021.
Key commitments
KPI
FY20
1,2
FY21
1,2
FY22
1
Ambition
Link to UN SDGs
Scope 1 and 2 carbon emissions
(CO
2
e tonnes)
18,732
11,525
10,795
Net zero
by 2030
Scope 3 carbon emissions
(CO
2
e tonnes)
Not reported Not reported
6,040
Net zero
by 2045
Waste intensity
(tonnes/£100k revenue)
13.04
7.57
20.96
YoY reduction
29
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Socially responsible delivery
Environment and climate change continued
Streamlined Energy & Carbon
(SECR) Reporting
The data included in the table on page 31
covers the reporting requirements detailed in
the SECR regulations. As we report our carbon
and energy data in calendar years, the following
section represents our carbon and energy
performance for Galliford Try for the calendar
years 2021 and 2020.
We are pleased to report a reduction in our
Scope 1 and 2 carbon emissions intensity
(see changes in reporting below) to 0.91 tonnes
of carbon dioxide equivalent emissions per
£100,000 of revenue in 2021 from 1.16 in 2020.
While some of this reduction is due to business
travel remaining below pre-pandemic levels,
this also reects the various initiatives we have
taken to become more energy efcient and
reduce the carbon footprint of our own
operations. Overall, we have reduced our scope
1 and 2 carbon dioxide equivalent emissions
by 61% since 2015, ie from 27,837 tonnes of
carbon dioxide equivalent emissions in 2015
to 10,795 tonnes in 2021.
Changes in reporting
In 2020 and prior years, the emissions
associated with business use of company cars
where the employee purchased the fuel and
was reimbursed through an expenses claim
have been reported under scope 3 – business
travel. In 2021, these emissions were reported
under scope 1 in order to be consistent with the
reporting of emissions from company cars
where the fuel is paid for by a corporate fuel
card. To aid comparison with earlier years,
the data for 2019 and 2020 has been restated
using the methodology used for 2021.
During 2021, we expanded our scope 3
reporting boundary to include all other
elements of business travel, fuel and energy-
related activities and employee commuting.
As part of our commitment to achieve net
zero by 2045 and setting a science-based
interim carbon reduction target, we are
currently in the process of performing a
Scope 3 footprinting review to identify the
most material Scope 3 emissions categories.
We will then develop reporting methodologies
for these categories and start reporting all
material Scope 3 emissions.
Greenhead College is part of the rst
wave of the Department for Education’s
School Rebuilding Programme. The project
involves the partial redevelopment of
the college campus to provide new modern
teaching and learning facilities within
energy efcient net zero carbon in
operation accommodation.
Our design for Greenhead College removes
the use of fossil fuels and adopts a fabric-
rst approach to improving the envelope
of the college thus reducing the energy
demand through passive design methods.
We have met the standard of reducing
energy use, staying below the maximum
energy use intensity of 74kWh/sqm per
year. This has been achieved by reducing
the amount of energy consumed in the
operation of the building with the aim of
ensuring the building is highly efcient.
Our design and construction is
future-proofed against the potential risks
of climate change by modelling the design
to future weather data and ensuring that any
adaptions required can be achieved without
changes to the structure of the buildings.
The project will include improving an
extensive biodiverse green roof combined
with photovoltaic cells that will generate
electricity and create a new habitat. We
have also maximised the benets of the
existing vegetation and microclimate.
Maximum energy use of intensity
per year of
74kWh/sqm
Strategy in action
Net zero in operation at Greenhead College
Operating sustainably
continued
Credit: Ryder
30
Galliford Try Holdings plc
Methodology
Carbon dioxide equivalent emissions (tCO
2
e)
are calculated using the methodology in ISO
14064-1 and the UK Government GHG
Conversion Factors and Methodology for
Company Reporting 2021, which are also
subject to external verication. Emissions
cover all those arising from our eet, gas and
electricity in all ofces and sites and all other
fuel used directly (for example diesel on site)
including our share of emissions from joint
ventures. Where data is obtained in litres
used and distance travelled, these conversion
factors have been used to convert to kWh.
Annual energy usage
Our total energy use, calculated from
Defra 2021 conversion factors, for all
our UK activities was 48,382,602 kWh
(location-based), which is a 20.4% increase in
our total energy use (2020: 40,194,724 kWh
(location-based)). This increase in reported
energy use reects the inclusion of certain
scope 3 emissions categories within our
reporting boundary in 2021. On a like-for-like
basis, our total energy use was 37,203,327 kWh
(location based) which is a 7.4% reduction in
our total energy use compared to 2020.
This excludes our PPP Investments operations,
but includes joint ventures where we have
operational control.
Looking forward
Some of the key areas of focus over the next
year include:
calculators across the business.
and having our science-based carbon
reduction targets veried by the SBTi
(Science Based Target initiative).
principles into our project delivery
methodology by developing our processes
to meet the PAS 2080 Carbon in
Infrastructure standard.
reporting processes so that we can provide
our project teams with better information
to help them modify their operations to
reduce carbon.
learning content to support the low
carbon processes.
Tonnes of CO
2
e
2021
2020
2019
Emissions from combustion of gas tCO
2
e (Scope 1)
383
100
672
Emissions from combustion of fuel for transport purposes (Scope 1)
1
3,482
3,742
6,485
Emissions from fuel oil supplies ie diesel consumed (Scope 1)
4,556
5,683
9,997
Fugitive emissions from ofce facilities ie air conditioning systems (Scope 1)
212
5 9
Emissions from use of LPG (Scope 1)
0
0 1
Emissions from purchased electricity (Scope 2, location-based)
2,161
1,994
1,568
Emissions from purchased electricity (Scope 2, market-based)
1,341
998
Not reported
Emissions from fuel and energy-related activities (Scope 3) Not reported
2,738
Not reportedEmissions from business travel (Scope 3)
1
429
141
264
Emissions from employee commuting (Scope 3) Not reported
2,874
Not reportedGalliford Try’s operations are wholly within the UK and as such this is where reported emissions arise.
1 In 2020 and 2019, emissions from business travel only included emissions related to the business use of privately owned vehicles.
From 2021, business travel also includes emissions related to air travel, rail travel and hotel stays.
In June 2021, we committed to
achieving a veriable science-based
target validated by the Science Based
Targets initiative (SBTi) and joined the
Business Ambition for 1.5°C to limit
global warming to 1.5 degrees, and the
UN-backed campaign Race to Zero.
31
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Communities
Socially responsible delivery
Our objective is to make a positive impact in communities where we
operate by delivering greater social value and improving lives.
Operating sustainably
continued
Credit: Pozzoni
32
Galliford Try Holdings plc
Performance in the year
Delivering a legacy of positive social value
outcomes in the communities in which we
operate is a key part of our strategy. This is
the right thing to do as a responsible business
and is also an increasingly important priority
for our clients.
Social and Local Economic Value
The ability to measure the social and local
economic outcomes we deliver on our projects
is now a requirement for many of our clients,
especially in the public sector. The Construction
Playbook states that central Government
tenders must include a minimum of 10% of their
evaluation criteria dedicated to social value, and
the priority themes and outcomes are set out in
2020’s Procurement Policy Note (PPN) 06/20
–
Taking Account of Social Value in the Award of
Central Government Contracts
.
During the year, we extended the scope of
our partnership with the Social Value Portal
(SVP), a tool which is backed by the National
TOMs (Themes, Outcomes and Measures)
Framework, which helps organisations
measure, report and enhance their social value.
We are now able to report the social value we
deliver on our projects across the group in a
consistent way.
We have evaluated 28 projects completed
during the year and on these projects, we
delivered a combined Social and Local Economic
Value (SLEV) of £306m. Now that we have
more data from our use of the SVP, we have a
better understanding of the drivers of the SLEV
metric. The local economic value element is
calculated by applying a multiplier to spend with
the local supply chain which varies signicantly
depending on location. In a relatively small
population of projects, this can have a distorting
impact on the average SLEV as a percentage
of contract value, making it a volatile and
unreliable metric. Therefore, we have redened
our KPI to be the percentage of our completed
projects over £5m that achieve greater than
25% SLEV as a percentage of project value.
The threshold of 25% has been selected based
on the SVPs 2021 Social Value Benchmarking
Report. The SVP’s analysis of 1,480 UK
construction projects identied that the
average SLEV as a percentage of project
value was 24.67%. During this nancial year,
14 projects (50%) delivered a SLEV as
percentage of contract value greater than our
target of 25% and we have set our ambition
for 60% of projects to exceed this threshold.
During the year we donated time, materials
and money to the value of £268,000 (2021:
£250,000) to charitable and community causes.
Considerate Constructors Scheme
The Considerate Constructors Scheme (CCS)
is an industry-wide organisation that strives
to improve the image of the construction
industry and leave a positive legacy through
implementation of best practice in the areas
of community engagement, the environment
and workforce wellbeing. CCS scores and
benchmarks construction sites in terms of their
positive impact within their locality. Our
average CCS audit score has increased from
40.6 to 41.8 and remains above the industry
average of 39.0. We have worked closely with
CCS for over 15 years and this year were proud
to receive a Partnership Award in recognition of
our engagement with the scheme and
commitment to innovation to raise standards.
Key commitments
KPI
FY20
FY21
FY22
Ambition
Link to UN SDGs
% of completed
projects
delivering >25%
SLEV as a % of
contract value
Not
reported
Not
reported
50%
60%
Considerate
Constructors
Scheme (CCS)
performance
41.1
(industry
ave. 37.1)
40.6
(industry
ave. 38.0)
41.8
(industry
ave 39.0)
>38 and above
industry average
In 2022, Galliford Try marked its
15-year anniversary of being a
Considerate Constructors Scheme
Partner. This is a signicant
achievement and demonstrates the
commitment the organisation has to
raising its standards and delivery for
communities.
33
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Performance highlights
Local delivery supported by
Group-wide network
Social value delivery is managed by a network
of regional Social Value Managers (SVMs) who
dene, agree, plan and report on the community
engagement and social value activities on each
of our projects. This is based on a needs analysis,
performed through collaboration with national
and local stakeholders, which identies the
needs and priorities of the local community
and the commitments made by our clients.
During the year, the Group Communities and
Social Value Manager established a Social Value
Forum, comprised of the regional SVMs to
promote the sharing of good practice. This has
included providing training in the National
TOMs Framework and supporting the
implementation of the Social Value Portal.
Educational support
We have developed an online resource for our
teams to support schools engagement. The hub
includes internal guidance as well as access to
external resources, including learning plans
aligned to key stages 2 to 5, available through
Go Construct.
Looking forward
Much of the value we add to communities
takes place locally, whether it is by providing
employment, using the local supply chain or
providing work experience and education
opportunities. We aim to continue to support
these activities at a project level while also
targeting the following areas:
dedicated to delivering meaningful social
impact to communities across the UK by
helping homelessness charities and hospices
with vital construction projects. We have
been a corporate patron of CRASH for 21
years, and continue to engage with them to
identify ways to expand the scope of the
support we provide.
to include modelling potential social value
outcomes and agree targets at the bid stage
and to monitor performance against targets
through project delivery.
Socially responsible delivery
Communities continued
My Future Pathway
Our Morrison Construction business has
partnered with Renfrewshire Council on its’ My
Future Pathway into Construction’ programme.
The pathway programme sees students from
Renfrewshire schools with a keen interest in
working in construction complete the year-long
programme and learn a number of skills from
industry partners to help them with their future
career. This includes site visits, career talks,
taster days and work experience.
Operating sustainably
continued
34
Galliford Try Holdings plc
Clients
Quality and innovation
Our objective is to deliver lower carbon, superior buildings and
infrastructure with a better social footprint for clients in our chosen
markets through a focus on innovation, digitalisation and quality.
35
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Performance in the year
We continue to have a strong pipeline of
secured work in our chosen markets, with 90%
of FY23 revenue already secured.
These are important indicators demonstrating
we are building trusted, long-term relationships
with our clients based on a track record of
delivering on their key priorities.
Trusted, long-term client relationships
Our focus on delivering quality outcomes
and building trusted relationships with our
clients is reected in the fact that 94% of our
order book is repeat business. Collaborative
relationships provide the platform for our
teams to provide trusted advice and focus on
performance with clear customer priorities and
outputs, all underpinned by our accreditation
to the ISO 44001 Collaborative Business
Relationships Standard. Client satisfaction is
independently assessed by a third party and we
use a dedicated software platform to analyse
the data and develop improvement plans.
Delivering low carbon buildings
Critical to these long-term relationships is our
ability to support clients in achieving their
carbon reduction objectives, demonstrating
how together we can meet the Government
strategy for net zero carbon, alongside our own
net zero commitment by 2045. To achieve this
we are deploying the latest technology and
innovation and debunking many of the myths
that exist around reducing carbon emissions.
The key tools we use across our business to
reduce the carbon footprint of the schemes
we deliver for our clients include:
to ensure we identify and maximise the
carbon savings across the entire life cycle
of the project.
measure the carbon performance of
components and materials to provide our
clients with a clear understanding and
informed decisions to maximise the
reduction in carbon.
record decisions that inform future projects
and provide a baseline for comparing the
performance of the asset in operation.
Leveraging Modern Methods
of Construction
Long-term relationships with clients allow our
teams to provide early contractor engagement,
to de-risk projects and provide innovative
methods to reduce carbon, and improve
productivity and efciency. The proactive
nature of our relationships brings a shared
commitment to outcomes, rather than scope,
that unlocks innovation. MMC are helping to
achieve these outcomes across the company,
with examples including:
we won a Constructing Excellence Off-site
Manufacturing Award by using MMC to
reduce the required workforce from 50 to
12 operatives, shortening the programme
by 10 weeks and eliminating work at height.
We had a zero AFR and zero defects.
the A52 improvement works, we installed an
81m pedestrian bridge. The bridge was
manufactured off-site, assembled adjacent
to its nal location and then lifted into place
in one night. This demonstrated the benets
of component-based standardisation to
minimise disruption and guarantee quality.
works – a modularised plant room was built
and tested off-site, facilitating modular
construction of the building and plant
within two days.
Industry leading BIM and information
modelling capabilities
To support our clients achieve their objectives,
we have invested signicant resources towards
identifying and acquiring innovative
technologies to improve our ability in
providing our clients exceptional services,
products and value.
We are leading the industry with our whole
team approach to BIM, assimilating it into our
business processes, and working towards an
entirely digitised approach to project delivery
using the latest technologies and industry
standards to get there.
Our knowledge on the subject is well regarded
and has enabled us to author part of ISO 19650
as well as being active contributors to free
industry guidance development via the UKBIM
Framework. Together with standards such as
ISO 16739 and our BIM and technical services
policies, these form the foundation of our BIM
strategy, which is updated regularly to keep
abreast of advancements in the eld.
Quality and innovation
Clients continued
Key commitments
KPI
FY20
FY21
FY22
Ambition
Link to UN SDGs
% of repeat
business in our
order book
91%
92%
94%
>80%
% of full year
planned revenue
secured at the
start of the
nancial year
90% 90%
90%
>85%
Operating sustainably
continued
36
Galliford Try Holdings plc
Looking forward
Some of the key areas of focus over the next
year include:
maturity of our relationships building on the
collaborative successes across the business.
through our pre-construction processes
to provide clients with data to make
informed decisions.
Construction Playbook to drive forward
collaborative procurement models to
improve efciency and productivity.
Marjorie McClure School is a new build
Special Educational Needs and Disabilities
school in the London Borough of Bromley for
students with a range of different complex
needs which include physical, medical and/or
learning difculties and disabilities.
The project to re-build the school was
awarded to Galliford Try as part of a
Sustainability Pilot by the Department for
Education in response to the UK Government
target to achieve net-zero ‘greenhouse gas’
emissions by 2050.
Reducing energy demand
Marjorie McClure School is designed to
reduce the need for energy use.
design which balances daylight and
overheating by the use of external shading
but also a careful consideration of natural
light and ventilation to reduce energy use.
fuel free by means of an air source heat
pump and photovoltaics on the roof
generate energy to be offset against
the overall usage.
Structural Insulated Panels (SIPs) which
have the benets of enhanced fabric
performance. The SIPs system allows the
building to be manufactured offsite which
benets the programme, quality and the
overall sustainability performance of the
project by reducing embodied carbon.
Enhancing biodiversity
The scheme enhances the external
environment and increases biodiversity.
The plan is punctuated by two courtyards,
which allow daylight and air to penetrate
the circulation spaces. The courtyards have
been carefully detailed to include sensory
gardens, an animal care area, storytelling
and performance spaces, outdoor dining,
fruit trees and growing areas. The scheme
provides an accessible outdoor classroom
using the existing mature oak tree as a
centrepiece and also includes growing areas
which are accessible and will enhance the
curriculum by including planting to
complement subject areas such as food
technology, history, science and English.
Strategy in action
A sustainability pilot for the
Department of Education
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Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Supply chain
Quality and innovation
Our objective is to align our supply chain with our culture and create
collaborative relationships that deliver best practice, innovation and
sustainable outcomes for clients, communities and the environment.
Operating sustainably
continued
38
Galliford Try Holdings plc
Performance in the year
We continue to focus on developing
collaborative, long-term relationships
with our supply chain partners through
our Advantage through Alignment (AtA)
programme, with 60% of our core Aligned
trades spend now with Aligned subcontractors.
AtA is a programme devised by our business
which goes beyond pure collaboration with our
supply chain, into a much deeper relationship.
Aligned subcontractors are appointed a
dedicated point of contact within our business
for improved communication. Through support,
training and education, we align our suppliers
and subcontractors with our working practices,
our values and our vision. This includes access
to our award-winning behavioural safety
programme, Challenging Beliefs, Affecting
Behaviour; BIM training and access to
Continuing Professional Development.
This deeper understanding creates an aligned
health and safety approach, greater efciencies
and opportunities for innovation, as well as
upskilling workforces and allowing the small
and medium subcontractors we work with
to develop.
A healthy cash ow is the lifeblood of any
business and late payment of invoices can be
problematic for suppliers of goods and services.
As a signatory of the Prompt Payment Code, we
have committed to paying 95% of supply chain
invoices within 60 days, and paying 95% of
invoices from suppliers with fewer than 50
employees within 30 days. We have made
further improvements in how quickly we pay
our suppliers, with 98% now paid within 60 days
and the average days to pay reduced to 25 days.
We continue to retain Gold status from the
Supply Chain Sustainability School, an
award-winning collaboration designed to
upskill its members through free training and
resources covering sustainability, off-site
manufacturing, BIM, Lean and Management.
Performance highlights
Subcontractor spend analysis dashboards
In order to support our businesses in managing
engagement with their supply chain, we have
developed and implemented subcontractor
dashboards. The dashboards allow our teams to
manage subcontractor spend more effectively,
for example by monitoring the proportion of
business we are doing with our Aligned
subcontractors and SMEs and making sure that
we are not overexposed to any individual
subcontractors. We will continue to develop
the dashboard by integrating it with other
systems to provide information to help us
monitor supply chain performance and, where
necessary, identify subcontractors who need
more support.
Key commitments
KPI
FY20
FY21
FY22
Ambition
Link to UN SDGs
% of business unit core trades spend
with Aligned subcontractors
58%
59%
60%
70%-80%
Prompt payment – % of invoices paid
within 60 days
88%
93%
98%
>95%
39
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Strategy in action
Rolling out low carbon welfare units
Net Zero Partners
In the year we launched our Net Zero Partners
initiative to help remove the main barriers
for rst generational net zero carbon supply
chain in the collective journey to net zero
carbon. The programme empowers our supply
chain to make decisions around their own
carbon strategy and understand what is
required to work with Galliford Try on our
journey to net zero, using a clear set of
guidelines and recommendations, and in turn
provides us with industry insight to inform
and adjust that journey.
The initiative is based on three key pillars of
carbon literacy, upskilling and continual
improvement, and quality. These encourage
an understanding of what carbon is and how to
measure it properly, the skills, knowledge and
training required for low carbon instruction,
and how to utilise low carbon construction
methods and digital tools to maximise quality.
Looking forward
Some of the key areas of focus over the next
year include:
programme across all our businesses.
to identify innovation and upcoming
technologies that can play a part in our net
zero journey. This will be key to ensuring we
pick the most effective products at the time
and provide our business with the exibility
to evolve with the changing technologies
and innovation in this space.
Quality and innovation
Supply chain continued
Galliford Try is using modern welfare
units which reduce carbon dioxide
emissions, minimise fuel consumption
and lower noise pollution by targeting
the use of solar power, water harvesting
systems and smart telemetry.
The units’ smart telemetry system features
a live dashboard for real-time monitoring
including automated system start/stop,
fault resolution and management of service
intervals which facilitate optimal utilisation
of welfare.
A smart eco water system with rainwater
harvesting and a non-chemical water tank
provides bigger and better hygiene and
wash facilities while reducing costs and
carbon. The system stores hot water for
instant warm water instead of using a
generator-powered immersion heater to
heat water on-demand. Its large capacity,
along with the smart telemetry, has
eliminated 90% of automatic weekly
services, and also saved the equivalent
of 872 litres of fuel based on a single unit
over nine weeks.
Compared to traditional units that are
typically powered by diesel generators,
the new units run entirely on solar/lithium
batteries, unless a top-up charge is required
to power a working ofce, two separate
WCs and full welfare facilities including
appliances such as kettles and microwaves.
Four units deployed over three months generated savings of:
c1,220kg
in CO
2
emissions
£2,000
in operational costs
Operating sustainably
continued
40
Galliford Try Holdings plc
Action and performance
Since the Modern Slavery Act came into force,
we have run an awareness campaign comprising
posters, videos and educational material aimed
at helping people to recognise the typical
signs of modern slavery. During the year, we
refreshed our Code of Conduct, and promoted
awareness of modern slavery again.
We ask all suppliers of equipment and materials
to our businesses to consider the risk of modern
slavery and to make a commitment to ensure
that there is no slavery or trafcking in their
supply chain.
Our widely available whistleblowing procedure
allows any employee or third party to
condentially raise a concern.
Anti-bribery and corruption
Policy and management
Every three years, all employees must
complete an online course regarding the
Bribery Act, which is also a topic covered
in employee inductions.
Twice a year, every business unit managing
director and head of support function is
required to sign a declaration to the Chief
Executive that their respective teams are
aware of the policy and the Code of Conduct,
comply with their contents, and that any
issues have been reported.
Performance
No material issues were reported or identied
through our audits.
Human rights and modern slavery
Ensuring human rights
We are committed to upholding human rights for our people and those
who work with us, and we take steps to prevent slavery and human trafcking
from taking place in our business and supply chain.
We comply with all UK legislation for human rights, recognising modern
slavery and human trafcking to be the most signicant human rights risks
to UK construction businesses.
41
Annual Report and Financial Statements 2022
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Governance
Financial information
Non-nancial information statement and non-nancial key performance indicators
The information required to be included in our non-nancial information
statement, under sections 414CA and 414CB of the Companies Act 2006,
can be found in the following places in the Strategic report:
Area
Key policies – available on our website
Further information on related risks,
KPIs and performance
Employees
Health and Safety Policy Statement
Pages 21–27
Employee Wellbeing Policy
Flexible Working Policy
Maternity Leave Policy
Paternity Leave Policy
Adoption Leave Policy
Shared Parental Leave (Birth) Policy
Shared Parental Leave (Adoption) Policy
Environmental matters
Energy Policy
Pages 28–31
Environmental Policy Statement
Responsible Sourcing Policy
Sustainability Policy
Biodiversity Policy
Human rights
Modern Slavery Statement
Page 41
Social matters
Code of Conduct – Doing the Right Thing
Page 26
Anti-bribery and corruption
Policy and Guidance on the Prevention of Corruption and Fraud
Page 41
Business model
n/a
Pages 2–3
Principal risks
Risk Management Policy
Pages 44–47
42
Galliford Try Holdings plc
Risk management
Effective risk management
Our ability to identify, assess and manage risks
and uncertainties is one of the key enablers to
delivering our Sustainable Growth Strategy.
It is vital that we understand the potential risks
associated with every project opportunity and
ensure that we only bid for projects that align
to our risk appetite and our ability to manage
the risks. We must also be able to identify and
manage the risks associated with operating
in a dynamic external environment.
Our embedded culture of risk awareness
has been particularly important to enable
the business to successfully mitigate the
macroeconomic challenges of the last nancial
year, such as rising ination. It also helps us
identify and monitor the development of
emerging risks, including the potential impact
of climate change – both the physical risks and
the risks associated with the transition to a low
carbon economy.
Our approach to managing risk is structured,
pragmatic and targeted, with key risk mitigation
measures embedded into management
processes and activities. These include:
processes and procedures designed to
give us condence in commercial decisions.
oversight of project forecasts.
meetings on all projects.
and reporting project performance
and forecasts.
to provide an independent assessment of the
project team’s reported project performance
and forecast outturn.
These activities are supported by a
governance structure that provides oversight
of key risks from the plc Board through to
individual projects.
Our principal risks are presented on
pages 44-47.
Our risk management process
The Group’s risk management and governance structure is designed to facilitate both a bottom-up
and top-down view of principal and emerging risks and is summarised in the diagram below.
Executive Board
that appropriate risk management and internal control procedures are embedded in our
day-to-day operations.
Business unit Boards
key mitigations and further actions required to manage the risk.
Internal Audit team.
Executive Risk Committee
Director of Risk and Sustainability, and a representative from each of Building, Infrastructure
and Specialist Services (Investments & FM).
risks reported up from the business units, and to consider any emerging risks that may have
an impact on the business in the longer term.
plc Board
oversight of our processes for identifying, assessing, managing and reporting on
principal risks.
the lifecycle of the project.
review meetings.
Project teams
reporting and management
of risk throughout the
governance structure.
the updated principal and
emerging risks to the Executive
Board and the plc Board at least
three times a year.
Audit Committee
Risk and Internal Audit
review the adequacy and
effectiveness of our risk
management processes and
systems of internal control.
and approving statements
included in the Annual Report
concerning internal controls,
risk management and the
Viability Statement.
43
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Risk description
We fail to secure an appropriate pipeline
of projects to achieve our revenue and
protability targets.
Risk appetite
We aim to secure a forward order book
that provides a high degree of certainty of
current year plus following year revenue,
while reecting appropriate margin, cash
and risk attributes.
Maintaining discipline in the projects that
we bid for is a fundamental element of our
internal control framework. We will only
bid for projects where we are condent
that we have the experience, knowledge
and supply chain to deliver effectively
and where the client relationships and
commercial terms support a collaborative
approach to managing risk.
Potential causes of risk
in Government investment in building
and infrastructure projects reduces
the opportunity pipeline.
economically unviable leading to
delays or cancellation of projects.
private sector investment due to
macro-economic conditions.
procurement frameworks.
sustainability expectations of our clients.
project selection.
Current risk environment
remains strong, supported by
Government policy on infrastructure
spending and levelling up.
buildings and infrastructure is creating
market opportunity – net zero new builds
and energy-efcient refurbishments
and retrots.
agree contract values – increased risk that
some opportunities may go away if they
become unaffordable for the client.
ination and are more receptive to a more
collaborative approach to sharing the risk.
important to clients, not just price –
clients across all sectors are looking for
solutions that support their carbon
reduction and social value objectives.
This aligns well with our strengths, but we
need to continue to develop our capability
and offering.
Emerging risks
traditional main contractor/subcontractor
model, instead opting for more self-
delivery and enterprise delivery models.
too early, incurring costs associated with
being an early adopter, or too late, losing
market share.
at differing rates, leaving some clients
focused on construction cost and
others on whole-life cost and
carbon performance.
to deliver the UK’s net zero ambition
limit the ability of our clients to pursue
new build construction schemes.
spending could reduce the certainty
of opportunities in the public and
regulated sectors.
Mitigations
an economic downturn by building a
high-quality order book with projects
that meet our strict risk prole.
core strengths and clients with long-term
growth and protability potential.
procurement frameworks (page 13) and
repeat business with key clients through
a centralised, dedicated pre-construction
team. This allows for strategic planning,
better collaboration and reduced risk of
project failure.
follow our internal “heat map” process,
identifying risks across a range of criteria
including the client and their advisors,
project location and our local supply chain,
our technical experience, our internal
resources and capacity, the procurement
method, contractual terms, and conditions
and price.
have a heightened risk indicator on
any other measure, are reviewed by
the Executive Board prior to approval
to bid. We typically target lower-risk
contract types.
relevant to ensure robust review and
challenge of risks and assumptions and
to promote knowledge sharing across
the business.
and nmcn acquisition, expand our target
markets in a risk-managed way.
Key risk indicators
existing clients.
Our principal risks
At a Group level, the Board monitors risk using
the following four principal risks, a detailed
analysis of which is provided below:
Resources.
This approach facilitates a targeted focus on
the most signicant risks and the actions being
taken to manage them.
At an individual business unit level, our risk
management process captures and monitors
risks and mitigations using more detailed risk
themes aligned to the four principal risks so that
we can take more targeted actions to address
issues that are specic to the regions and
sectors in which they operate.
Work-winning
Risk management
continued
44
Galliford Try Holdings plc
Risk description
We fail to deliver projects safely, on time,
in agreement with contractual terms,
and to a high quality for our clients.
Risk appetite
We prioritise health and safety above
everything else and believe that nothing is
so important that we cannot take the time
to do it safely.
We will not tolerate poor quality and
strive to deliver high quality buildings and
infrastructure for our clients that provide
safe environments for the occupiers and
users of the assets.
We aim to provide realistic and transparent
forecasts of project performance with
potential risks to programme and
margins identied and addressed before
they materialise.
Potential causes of risk
regulations and/or poor safety behaviours.
variations and claims processes.
per contract requirements.
document management.
control procedures.
weather conditions.
and/or insolvency.
complete, ination estimates, outcomes
of disputes and nal value included in
project forecasts.
Current risk environment
from 0.08 to 0.06 in the year.
risk to programmes but there remains the
risk of isolated examples of disruption.
workers feeling stretched which could
impact on safety and wellbeing.
or incomplete deliveries are
causing disruption to programmes,
but are manageable.
available space which needs to be planned
properly to maintain safe site operations.
It also increases the risk of theft.
across the year with periods of extreme
heat managed through pragmatic guidance
on modications to working practices.
quality through training, tools,
quality alerts.
Emerging risks
and/or insurance cover becomes
prohibitively expensive.
the requirements of our clients to have
better and more reliable data about the
assets we design and build for them.
and any potential new global pandemic
has a signicant/similar impact on the
construction industry that it had
with Covid-19.
methodologies fail to adapt to the physical
effects of climate change, including more
regular and more extreme weather
events, leading to reduced productivity,
programme delays and cost overruns.
Mitigations
behavioural safety programme
Challenging Beliefs, Affecting Behaviour,
and the introduction of Lead Indicators
which target no harm.
delivery focusing on close collaboration
and client satisfaction to enable
achievement of end goals for both parties.
terms, pre-contract to ensure we do not
sign up to contracts with onerous terms.
This includes the employment of margin
thresholds and escalation to the Board of
any contracts that do not meet our criteria.
management system policies and
procedures and digitalisation to improve
data, quality and efciency.
designers and subcontractors to work
with and use specialist consultants at
key review stages.
formats (value cost analysis and cost
and value reconciliation) for monitoring
and reporting project performance
and forecasts.
review meetings on all projects enable
a robust assessment of programme
status, risks and commercial forecasts
and are investing in upgrading our existing
ERP systems.
checks’ to provide an independent
assessment of the project team’s reported
project performance and forecast outturn.
and safety site risk assessments, which are
monitored through a regular audit process.
Support Forums that drive process
improvements across health and
safety, digitalisation, carbon reduction,
procurement, design management,
mechanical and electrical, and
commercial activities.
and appropriately to incidents.
Key risk indicators
Project delivery
Link to our
strategic priorities
Progressive
culture
Socially
responsible
delivery
Quality and
innovation
Sustainable
nancial returns
45
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Risk description
We fail to secure the right people and other
resources necessary to deliver our projects
and manage our business.
Risk appetite
We aim to recruit employees from a diverse
talent pool who are aligned to our values
and behaviours.
We seek to work with nancially resilient
subcontractors, suppliers and joint venture
partners who share our values in relation
to safety, quality and sustainability.
Potential causes
develop the right staff to meet our future
needs, we mismatch our stafng levels
to peaks and troughs in activity or
lack diversity.
due to high levels of activity in the
construction sector.
payment practices.
Current risk environment
short term supply/demand imbalances
and high energy prices, exacerbated by
the conict in Ukraine. However we
take measures to manage material cost
ination (early procurement, supply
chain engagement, risk allowances in
tenders etc).
steel and bricks are now factored into
our programmes and procurement
planning. However, we are seeing more
short-notice delays, cancellations or
incomplete deliveries.
risk, but we manage by being selective
in who we work with, monitoring our
exposure and ensuring we pay our
suppliers promptly.
Large infrastructure schemes and a
mismatch between skilled worker supply
and demand is driving salaries up and
increases the risk of employees leaving for
higher reward packages. We are working
hard on developing our employee value
proposition as part of the broader ‘retain
and gain’ people strategy.
and provide them with the opportunities
for progression. The results of our staff
survey indicate that we have high levels
of engagement and satisfaction within our
staff and we continue to improve the way
we promote the business and develop our
employee offering.
gives condence to clients and allows
us to continually improve our prompt
payment performance.
Emerging risks
more experienced staff retire and are not
replaced in sufcient numbers because
the construction sector cannot compete
with other sectors in attracting talent.
will require us to attract a workforce
with a different set of skills.
non-renewable materials may lead to
greater volatility in prices and more
regular disruption to supply.
may lead to an increased risk of defects
and quality issues as we start to use new,
low carbon materials whose long-term
performance is unproven.
Mitigations
based on best practice principles and
relevant legislation which, among other
things, includes the regular review of
remuneration and benets packages to
ensure we remain competitive.
management processes enable continuity
and identication of future leaders.
programmes to develop our own pipeline
of talent.
with key suppliers and subcontractors
to ensure that we remain a priority
customer when resources and materials
are in short supply.
programme facilitates greater
engagement with our key supply chain
members and provides them with greater
visibility of our pipeline of projects.
supply chain invoices within 60 days,
and achieving the new standards of the
Prompt Payment Code.
strength using a credit tracker on the
Dun & Bradstreet portal.
forecast weekly and monthly, and the
Group prepares a detailed daily cash book
forecast for the following eight-week
period to highlight any risk of intra-month
uctuations. These forecasts are reviewed
at business unit, division and Group level.
Key risk indicators
performance statistics.
Resources
Risk management
continued
46
Galliford Try Holdings plc
Risk description
We fail to comply with requirements of the
various legal and regulatory regimes in which
we operate, resulting in a high-prole breach
and regulatory censure.
Our risk appetite
We have zero tolerance for non-compliance
with regulations. We expect all employees and
subcontractors to be aware of all regulations
relevant to their role and to comply at all
times. We also expect our people to speak up
if they observe or suspect non-compliance.
Potential causes
changes to key legislation and regulations.
training to all staff.
monitoring processes.
Current risk environment
the drive for greater quality and
consistency, the Act has the potential
for signicant consequences in relation
to extended liabilities.
surveillance tools, recognising the potential
risk of cyber-attacks linked to the conict
in Ukraine.
security standards and procedures
through ISO 27001 accreditation.
ESG reporting is evolving quickly and will
require us to monitor and publish more
information and comply with new
standards (ie ISSB).
Emerging risks
independence may lead to very different
regulatory regimes in Scotland and the
rest of the UK.
eg a ban on diesel.
Mitigations
and guidance at every level including
our Code of Conduct, mandatory
regulatory and cyber security e-learning
for all employees, an anonymous and
independent whistleblowing helpline,
regular legal updates and briengs,
six-monthly compliance declarations,
and conict of interest registers
and authorisations.
provides ongoing monitoring and oversight
of policy and compliance activity in relation
to key areas of legislation.
Building Safety Act and are preparing
through training, continued investment
in digital tools to support quality, and a
proactive approach to managing claims.
Key risk indicators
Number of external enforcement cases.
Regulatory compliance
Link to our
strategic priorities
Progressive
culture
Socially
responsible
delivery
Quality and
innovation
Sustainable
nancial returns
47
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Governance
Financial information
The built environment is responsible for around
40% of global carbon emissions, therefore as a
business operating in the construction sector,
we have a responsibility to play our part in
reducing emissions. We have reduced the
carbon emissions within our own operations
by 61% since 2015 and have set ambitious
targets to achieve net zero in our operations
by 2030 and across our value chain by 2045
(pages 30-31).
However, as well as continuing to address
the impact that our activities have on the
environment, over the past year, we have
increased our focus on how climate change may
have an impact on our strategy and the risks
and opportunities presented. We have made
disclosures that are consistent with the TCFD
core elements areas of Governance, Strategy,
Risk Management and Metrics and Targets
and cover the 11 specic recommended
disclosures, with the exception of the following
two recommendations where we are not
yet able to disclose full compliance:
scenario analysis to model the resilience
of our strategy under different global
warming scenarios.
in relation to our Scope 1 and 2 and some
Scope 3 GHG emissions, we need to expand
these to include all relevant Scope 3
emissions categories and develop metrics
and targets that are more closely aligned to
the climate-related risks and opportunities
we have identied.
Climate change considerations are embedded
into our existing governance and risk
management framework. Therefore to
avoid duplication, the key disclosures in relation
to the 11 TCFD recommendations are included
in the relevant sections of the Annual Report,
as indicated in the table on pages 49 and 50.
In this section, we have provided information
on the disclosures that are not addressed in
other sections.
Task Force on Climate-related Financial Disclosures (TCFD)
Our climate-related risks
and opportunities
The nature and scope of our activities and
the commercial environment in which we
operate provide us with a number of inherent
advantages in terms of our exposure to
climate-related risks:
facilities or other assets that could be at risk
of stranding, ie their useful economic life
being curtailed due to the transition to a
low carbon economy.
environment provides a market opportunity
for our services.
therefore, while still exposed to rising mean
temperatures and more severe weather
events, we have limited exposure to the
climate extremes that are predicted to make
human life unsustainable in some regions
of the world.
a geographically dispersed portfolio of
projects, therefore we are not exposed
to damage to a business-critical facility,
such as a factory or distribution centre,
due to extreme weather.
unpredictable shifts in consumer
preferences and behaviour as our work
is for long-term repeat clients, largely in
the public and regulated sectors.
investment cost or risk associated with
developing new, low carbon alternatives to
existing product ranges as this is typically
carried out by our supply chain partners.
costs, these can be priced into our bids
and recovered from clients.
Addressing climate change
We are taking action to ensure that our business continues to adapt and thrive in a
changing climate.
Our Net Zero Partners empowers our supply chain to make proactive decisions
around their own carbon strategy and understand what is required to work
with Galliford Try on our journey to net zero. Around 45 supplier organisations
attended the launch event near Glasgow, and the programme has now been
rolled out nationwide.
48
Galliford Try Holdings plc
Notwithstanding these structural advantages,
during the year, the Executive Risk Committee
performed a detailed review of the key
climate-related risks and opportunities, based
on analysis that had been prepared by the
Director of Risk and Sustainability. The
methodology adopted for the review closely
followed the format of the CDP risk disclosures
and therefore included assessments of the
primary potential nancial impact, the time
horizon, likelihood and magnitude of each of the
risks and opportunities identied. The outputs
from the Executive Risk Committee’s review,
which are outlined on pages 50–53, were
reviewed by the Executive Board and plc Board.
Our most signicant risks and opportunities
are related to how effectively we manage the
transition to a low carbon economy, as opposed
to physical risks to our existing assets.
In assessing the likely timeline when risks
and opportunities will begin to have an
impact on the business, we have applied
the following denitions:
Short term (0 – 3 years):
aligns to our current
pipeline of opportunities and projects and
reects issues and trends that are already
having some impact.
Medium term (3 – 10 years):
issues or trends
that are already visible, but are not yet having
a signicant impact.
Long term (10 – 30 years):
potential issues or
trends that are foreseeable, but there is a high
degree of uncertainty on how they develop and
what impact they will have on the business
Managing climate-related risks
The climate-related risks we face are managed
through our existing strategic and operational
management processes. For example, the
risk and opportunity created by the increased
carbon reduction requirements and
expectations of clients is one of the key drivers
of our Sustainable Growth Strategy. This is
supported by operational responses, led by
the Executive Board, to deliver the strategy.
These responses include investment in new
carbon reduction roles, creation of cross-
disciplinary working groups, development of
new processes and tools, and upskilling our
own people and our supply chain.
Climate scenario analysis
We are developing scenario-based analysis,
using plausible extreme scenarios – a 1.5ºC
warming trajectory (aligned with the Paris
agreement) and a 2.7ºC warming trajectory
(consistent with the Climate Action Tracker’s
assessment of current policies and pledges).
Our high-level assumption is that a 1.5ºC
scenario will only be achieved through radical
policy interventions, such as carbon taxes, or
mandatory carbon offsets. Therefore under
this scenario, we would expect the transition
risks to be greater as we would have to respond
more quickly to changing client expectations
and a very different regulatory landscape.
By contrast, the 2.7ºC scenario would be
characterised primarily by increased physical
risks as a result of unchecked climate change
and the resultant increase in the frequency
and severity of extreme weather events.
Our qualitative assessment is that the potential
impact of the risks and opportunities we have
identied would be greater under a 1.5ºC
scenario, given that they are more closely
aligned with transition rather than physical
risks. However, over the coming year, we will
develop and rene this analysis further, and
evaluate the potential implications on our
strategy and business model.
TCFD Pillar
Recommended disclosures
How addressed
Governance
Disclose the organisation’s
governance around
climate-related risks
and opportunities.
a. Describe the Board’s oversight of
climate-related risks and opportunities.
Governance over climate-related risks and opportunities is
embedded into our business-as-usual governance processes
and structures. This approach allows us to assess climate-
related risks and opportunities in the context of the broader
risk environment and develop pragmatic responses that are
aligned with our overall Sustainable Growth Strategy.
During the year, the plc and Executive Boards have reviewed
the detailed assessments of climate-related risks and
opportunities performed by the Executive Risk Committee.
For further information and details as to management’s role
to assess as risk, please refer to our Governance framework
outlined on page 70.
b. Describe management’s role in assessing
and managing climate-related risks
and opportunities.
Strategy
Disclose the actual and
potential impacts of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and nancial
planning where such
information is material.
a. Describe the climate-related risks and
opportunities the organisation has identied
over the short, medium, and long term.
See ‘Our climate-related risks and opportunities’ section
overleaf and on page 51.
b. Describe the impact of climate-related risks
and opportunities on the organisation’s
businesses, strategy, and nancial planning.
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario.
We have not yet completed a quantitative scenario analysis
to model the resilience of our strategy under different global
warming scenarios. We have begun to develop qualitative
analysis based on plausible extreme scenarios and will develop
this analysis further over the coming year.
See overleaf for further information.
49
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Task Force on Climate-related Financial Disclosures (TCFD)
continued
Risks
Fail to develop a competitive low carbon construction capability
Risk description and potential impact on the business
Our clients, in both the public and commercial sectors, are increasingly
required to operate low carbon buildings and infrastructure.
They expect us to have the capability to model the embedded and
operational carbon, use lower carbon materials and extend the life
of their existing assets through retrotting.
Planning policies and building regulations may also move towards
ensuring that embedded and/or operational carbon targets
are incorporated into the design and construction of buildings
and infrastructure.
If we fail to develop these capabilities quickly enough, we may not
remain competitive and may not be able to win positions on key
frameworks. Ultimately, if we cannot win new work, we may
generate reduced levels of revenue and prots.
Risk mitigation
We have committed to achieving net zero across our own operations
by 2030 and across all value chain operations by 2045. To do this, we
have developed our ‘Journey to Net Zero’ framework and are taking
multiple actions to achieve our carbon reduction targets including:
reduction ambition and targets, and developing solutions to
meet those objectives.
operational carbon.
data and reporting.
TCFD Pillar
Recommended disclosures
How addressed
Risk Management
Disclose how the
organisation identies,
assesses, and manages
climate-related risks.
a. Describe the organisation’s processes for
identifying and assessing climate-related risks.
The identication, assessment and management of climate-
related risks and opportunities is embedded within our broader
risk management structure and processes.
For further information on our risk management process,
please refer to the Principal Risks section on page 43.
b. Describe the organisation’s processes for
managing climate-related risks.
See ‘Managing climate-related risks’ on page 49.
c. Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organisation’s
overall risk management.
Climate-related risks are considered as cross-cutting risks that
can have an impact on a number of the principal risk themes we
monitor at a business unit and Group level, such as work-
winning or project delivery. This is the same approach we have
taken to other cross-cutting risks including Brexit and Covid.
Metrics and Targets
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
a. Disclose the metrics used by the organisation
to assess climate-related risks and
opportunities in line with its strategy
and risk management process.
We have existing metrics and targets in relation to our GHG
emissions and these are included in the Environment and
Climate Change section on page 28.
Over the coming year we will be developing additional metrics
and targets that are more closely aligned to the climate-related
risks and opportunities we have identied.
b. Disclose Scope 1, Scope 2, and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions,
and the related risks.
In 2021, we achieved a 6.3% reduction in our scope 1 and 2
GHG emissions compared to 2020. We also expanded our
scope 3 reporting and for the rst time reported the emissions
associated with business travel, employee commuting, and fuel
and energy related activities.
Our Scope 1, 2 and 3 GHG emissions are reported in our
Streamlined Energy and Carbon Reporting (SECR) disclosure
on page 31.
c. Describe the targets used by the organisation
to manage climate-related risks and
opportunities and performance against targets.
We have existing metrics and targets in relation to our GHG
emissions and these are included in the Environment and
Climate Change section on page 28.
Over the coming year we will be developing additional metrics
and targets that are more closely aligned to the climate-related
risks and opportunities we have identied.
Time horizon
Short term
Potential impact on
nancial performance
Decreased revenues due to reduced
demand for products and services
Link to our principal risks
50
Galliford Try Holdings plc
More regular extreme weather events
Risk description and potential impact on the business
A signicant amount of construction activity happens outside and
therefore is exposed to the weather. The latest Met Ofce UK Climate
Projections (UKCP July 2021) predict warmer, wetter winters and
hotter, drier summers, along with an increase in the frequency and
intensity of extremes weather events including heatwaves, intense
rainfall and ooding. Such events could lead to disruption to our
construction activities in a number of ways:
may require modications to working practices to maintain worker
welfare which may increase costs and reduce productivity.
may cause damage to works under construction and curtail certain
activities, such as crane lifts or earthworks, which could result in
project delays and additional costs.
weather may make it more difcult for staff and deliveries to get
to sites.
water usage which may make it impossible to maintain site
welfare or restrict certain activities, eg concrete pouring and
dust suppression.
to supply chain disruption (unavailability, longer lead times and
increased costs).
Changes in temperature extremes can also have an impact on the
resilience of building materials and therefore determine the materials
we are able to specify and use. Similarly, changes in climate may
inuence the heating and cooling systems that we specify which
may increase the costs of the buildings and infrastructure we build.
Risk mitigation
As was demonstrated during the pandemic, we are experienced in
developing and amending site operating procedures in response to
specic health and safety risks. Examples of adaptations we could
make include:
water and sun cream.
the day.
and reduce the number of people on site.
Similarly, we are experienced in managing the impact of unexpected
events on construction programmes and have a number of operational
and contractual mechanisms to mitigate the risks, including:
Time horizon
Short term
Potential impact on
nancial performance
Increased direct costs
Link to our principal risks
51
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Task Force on Climate-related Financial Disclosures (TCFD)
continued
Failure to manage the adoption of new technology
Risk description and potential impact on the business
As the focus on embedded carbon increases, we expect to increasingly
be required to use lower carbon alternatives for construction
materials, especially carbon-intensive materials such as steel, concrete
and glass. There is a risk associated with the adoption of new materials
and using manufacturers and suppliers we have no experience of
working with previously. Without effective product and design
evaluation and robust quality assurance procedures, there is a risk
of increased defects, which in turn could result in the professional
indemnity insurance market responding through further increases
in premiums or restrictions/limitations in cover.
Similarly, to achieve our scope 1 and 2 net zero by 2030 target,
we will have to signicantly reduce (if not eliminate) our use of
diesel-powered plant and equipment. The non-diesel alternatives,
such as HVO, electric and hydrogen, may not be available in the
volumes we require, at an equivalent cost, or deliver sufcient
safety and/or operational performance.
Risk mitigation
Response includes:
such as Fieldview, BIM and Dalux.
PMDF modules.
Supply Chain teams to evaluate new materials, plant and equipment
and other new technology and support their adoption across
the business.
issues with particular products have been identied.
Risk description and potential impact on the business
There are a number of climate-related drivers that may result in
sustained increases in materials costs in the construction sector.
This is driven through a combination of the market dynamics of supply
and demand imbalances, as well as Government policy to incentivise
carbon reduction. Our bidding disciplines and contractual protections
largely insulate us from the direct impact of cost increases. However,
the indirect consequence of rising construction costs could be
potential projects becoming unaffordable for our clients, leading
to a reduction in opportunities and revenue.
Manufacturers are developing innovative, lower-carbon materials all
the time and this is vital if we are to reduce the embodied carbon of the
buildings and infrastructure we construct. However, as new products
come on to the market and establish credibility, demand for these
materials could grow more quickly than the production capacity,
resulting in higher material costs.
In the short to medium term, the supply and demand imbalances
in global energy markets are likely to be sustained as countries
manage the twin challenge of decarbonising electricity generation
and increasing security of supply. High energy prices will continue
to increase the cost of materials that have energy intensive
manufacturing processes, such as steel, concrete, and glass.
In addition to the market imbalances, regulatory moves to use carbon
pricing to incentivise carbon reduction may add further upwards
pressure on the price of carbon-intensive materials. It is also possible
that the UK-Energy Trading Scheme is extended to other sectors
considered to be carbon intensive, including construction.
Risk mitigation
from short-term cost ination and maximise cost recovery.
the amount of carbon-intensive materials.
to reduce costs through minimising waste and shortening
construction programmes.
the material requirements eg. transitioning from new build to
retro-tting and refurbishment.
Increased material costs make projects unaffordable
Time horizon
Short term
Potential impact on
nancial performance
Decreased revenues due to reduced
demand for products and services
Link to our principal risks
Time horizon
Medium term
Potential impact on
nancial performance
Increased direct costs
Link to our principal risks
52
Galliford Try Holdings plc
Opportunity
Development and/or expansion of low carbon construction
Opportunity description and potential impact on the business
In order to decarbonise the built environment in the UK, there is a
need for our clients to ensure that existing assets are either replaced
with new, more energy-efcient assets, or increasingly, ensure that
they are modied to extend their life and improve their energy
efciency. Demand for both new build and retrot of existing assets
with low embodied and operational carbon performance is likely
to create a pipeline of opportunities within our target markets.
Opportunity realisation
The actions we are taking to realise the opportunities are the same as
the actions we are taking to mitigate the risk of failing to develop our
low carbon construction capability, ie:
reduction ambition and targets and developing solutions to meet
those objectives.
operational carbon.
data and reporting.
Time horizon
Short term
Potential impact on
nancial performance
Increased revenues resulting from increased
demand for products and services
Link to our principal risks
53
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
As required by provision 31 of the UK
Corporate Governance Code, the Board has
assessed the prospects and nancial viability
of the Group, taking account of the Group’s
current position and the potential impact of the
principal risks to the Group’s ability to deliver
its business plan. The assessment of prospects
has been made using a period of ve years,
which is just beyond our strategic plan period.
The assessment of viability has been made using
a period of three years, which aligns with our
budget period and provides reasonable visibility
of future revenue from the existing order book.
Since the sale of the housebuilding businesses
and the recapitalisation of the business in
January 2020, the Group no longer has any debt
facilities and associated covenants, therefore
viability has been assessed in terms of the
headroom against available cash reserves.
Assessment of prospects
As outlined in our Strategic report, the
long-term prospects of the business are
supported by a strategy which builds on
our existing strengths and the growth
opportunities in our target markets.
Our alignment to the UK’s continued
investment in social and economic
infrastructure is a fundamental driver of
demand for our services and plays to our
strengths in the health, education, defence,
highways and environment markets. Our ability
to achieve sustainable growth within these
markets is underpinned by our position on the
most signicant procurement frameworks, our
commitment to supporting the decarbonisation
of the built environment and our investment
in digital technologies to drive continuous
improvement in quality and productivity.
Our people remain the key to our success and
our focus on attracting and retaining a more
diverse workforce as well as increasing the
proportion of apprentices and graduates help
us access the skills and expertise required to
deliver on our sustainable growth strategy.
Assessment of viability
The base case for the cash ow projections modelled in our assessment of viability is the budget for
the three years from 1 July 2022 which incorporates appropriate contingencies against plausible
day-to-day downside risks, primarily the Group’s principal risks as disclosed previously. The base
case shows strong levels of average month-end net cash and assumes that the Group continues to
operate without debt facilities.
Against this base case, we have stress-tested the forecasts and modelled the impact on cash ow
and liquidity of a number of downside scenarios related to our principal risks, including a combined
downside scenario that includes a number of these sensitivities occurring together. The scenarios
modelled, and their link to the underlying principal risks, are described in the table below.
Although we have not included a further national lockdown scenario in our stress testing, the
business and our cash performance has shown a high degree of resilience throughout the Covid-19
pandemic. Our sites largely remained open and the adherence to stringent risk mitigation measures
in our sites and ofces, together with good engagement with our clients and supply chain, minimised
the disruption to project delivery.
Scenario modelled
Link to principal risks
Scenario 1
Reduction in construction volumes
Our cash performance is correlated with earnings growth and therefore
reliant on construction activity being in line with our assumptions.
We have modelled a reduction in construction volumes that would
equate to a 10% reduction in monthly cash receipts offset by a
proportionate reduction in payments, relative to our base case forecast.
Work-winning
Scenario 2
Deterioration in working capital
We have modelled the impact of a deterioration in our working capital,
which could be caused by delays in receiving payments from clients
and/or earlier payments to our supply chain.
Resources
Scenario 3
Irrecoverable cost increases
There is a risk of a prolonged period of materials cost ination and
therefore we have modelled the impact of failing to fully mitigate
these cost increases on our projects.
Resources
Scenario 4
‘Perfect storm’
We also tested the unlikely but plausible scenario where all of scenarios
1–3 combine at the same time.
Work-winning
Resources
As part of the viability assessment, the Board also considered the mitigations and interventions
available to manage the impact of one or more of the downside scenarios occurring. The base case
already includes signicant cash contingencies and the Board has considered further mitigating
actions that are available to it.
Based on the results of this analysis, the Board has concluded that it has a reasonable expectation
that the Group will be able to continue in operation and meet its liabilities as they fall due over the
three-year period of its assessment.
Viability Statement
54
Galliford Try Holdings plc
Financial review
Delivering sustainable growth
Performance
1,2
We have delivered an increase in prot and
dividends. Our prot margin has increased,
showing excellent progress against our
margin improvement targets.
Revenue
Our revenue for the year was up 10% at
£1,237.2m (2021: £1,124.8m), reecting
disciplined growth in Infrastructure. As
expected, Infrastructure’s revenue increased
as the AMP7 programme in the water sector
gathered momentum, and this was
supplemented by our acquisition of the
water business of nmcn plc (in administration).
Of the total, Building contributed revenue of
£789.1m (2021: £789.2m), broadly in line with
2021 as a result of some delays to new contract
starts towards the end of the nancial year as
expected given the increased length of client
procurement in response to rising ination.
Infrastructure recorded revenue of £441.9m
(2021: £329.2m), including £74.1m from the
nmcn acquisition. PPP Investments’ revenue
was £6.2m (2021: £6.4m).
Our results reect the strong
foundations of the business and
excellent performance of our people.
Andrew Duxbury
Finance Director
We have delivered growth in line with our strategy and expectations, resulting
in increased shareholder returns. The continued improvement in our operating
performance, alongside our strong nancial position and high-quality order book,
provide condence in our ability to meet our sustainable growth targets.
1 See note 32 for a reconciliation of statutory numbers to Alternative Performance Measures.
2 Pre-exceptional items from continuing operations, unless otherwise stated.
55
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Financial performance
1
Revenue
£1, 237. 2m
(2021: £1,124.8m)
Divisional operating margin
2
2.4%
(2021: 2.0%)
Operating prot before amortisation
2
£18.5m
(2021: £10.1m)
Prot before tax
2
£19.1m
(2021: £11.4m)
Dividend per share
8.0p
(2021: 4.7p)
Average month-end cash
£174m
(2021: £164m)
PPP portfolio
£47.5m
(2021: £49.1m)
Operating prot before amortisation
Our pre-exceptional operating prot before
amortisation was £18.5m (2021: £10.1m).
Of this, Building generated prot of £18.9m
(2021: £15.9m), representing a margin of 2.4%
(2021: 2.0%), and Infrastructure generated
prot of £10.8m (2021: £6.0m), representing a
margin of 2.4% (2021: 1.8%). The combined
divisional operating margin of 2.4% (2021:
2.0%) has been achieved in line with our margin
improvement targets, with further details of
divisional performance set out on pages 58
to 60.
There was an £11.2m net loss in
PPP Investments and Central Costs
(2021: £(11.8)m), with Central Costs being
in line with their 2021 level.
Exceptional items
Exceptional items of £13.7m were incurred in
the period, as set out in note 4 to the nancial
statements. £7.7m related to the acquisition
and integration of the nmcn water businesses,
acquired in October 2021. The remaining
£6.0m relates to our investment in cloud-based
Enterprise Resource Planning (ERP) nance and
commercial systems scheduled to continue into
Spring 2023, part of our investment in our
digital and data capabilities, which under
updated accounting guidance, is not allowed
to be capitalised. There were no exceptional
items in 2021.
Net interest income
Net interest income of £2.9m is in line with
2021, reecting the stable portfolio of PPP
sub-debt investments.
Prot before tax
Pre-exceptional prot before tax for the year
was £19.1m (2021: £11.4m). Pre-exceptional
prot before income tax is an alternative
performance measure and a key metric we use
to monitor our performance in years with
exceptional items, such as 2022.
Post-exceptional prot before tax was £5.4m
(2021: £11.4m).
Taxation
The pre-exceptional tax charge for the year
is £1.7m (2021: £1.0m), which equates to an
effective tax rate of 8.9% (2021: 8.8%), lower
than the standard UK rate of corporation
tax due to the recognition of previously
unrecognised brought forward tax losses
and corporate interest restrictions. The
post-exceptional tax credit is £0.9m (2021:
charge of £1.0m).
We have a constructive and open relationship
with HMRC, and look to comply with both
the letter and spirit of relevant regulations
and to pay our fair share of tax. Our tax
strategy is available from our website at
www.gallifordtry.co.uk.
Earnings and dividends per share
We recorded pre-exceptional earnings per
share for the year of 16.0p (2021: 9.5p).
The post-exceptional earnings per share in
2022 was 5.8p.
The Board declared an interim dividend of
2.2p per share (2021: 1.2p), which was paid
to shareholders on 8 April 2022, and has
declared a nal dividend of 5.8p per share
(2021: 3.5p), bringing the total dividend
for the nancial year to 8.0p per share
(2021: 4.7p). The full year dividend in 2022
is covered 2.0 times (2021: 2.0 times) by
pre-exceptional earnings, in line with the
Board’s stated policy.
At 30 June 2022, the Company had
distributable reserves of £109.7m
(2021: £100.7m).
Critical accounting policies and assumptions
Our principal accounting policies are set out
in note 1 to the nancial statements, together
with a description of the key estimates and
judgments affecting the application of
those policies and amounts reported in
the nancial statements.
We use alternative nancial performance
indicators to monitor our performance,
alongside standard measures, which are
designed to be useful to investors by providing a
balanced view of our operations. An explanation
of these measures and reconciliations to the
corresponding statutory measures are included
in note 32.
Financial position
Our strong balance sheet, supported by a
robust cash performance and valuable PPP
assets, is important for our clients; provides
condence to our supply chain; and continues to
provide a strong underpin for our future plans.
Cash and investments
We have no debt or dened benet pension
obligations, and at 30 June 2022 had a cash
balance of £218.9m (2021: £216.2m). The
average month-end cash balance in the year
was £174m (2021: £164m) and our daily
minimum cash balance was above £100m,
which shows continued strong cash
performance throughout the year. Our
operating cash generation in the year,
reects very strong cash performance
across the business.
We are committed to pursuing a collaborative
and open approach with all our supply chain
and our performance under the Prompt
Payment Code improved again, with 98%
of invoices paid within 60 days (2021: 93%)
and average days to pay invoices reduced to
25 days (2021: 36 days).
At 30 June 2022, we had a PPP portfolio of
£47.5m (2021: £49.1m), reecting a blended
7% discount rate (2021: 7%). This portfolio
contributes to our balance sheet strength
and generated interest income of £3.9m
(2021: £3.9m) in the year.
Working capital
We have modest working capital requirements.
At 30 June 2022, net working capital employed
was £255.5m (30 June 2021 (restated, see note
35): £237.6m), predominantly reecting the
net contract liabilities acquired with nmcn.
The Group has restated the balance sheet
classication of some prior year working capital
balances, as set out in note 35.
As previously disclosed, the Group provided
services in respect of three contracts with
entities owned by a major infrastructure fund of
a blue-chip listed company. Our work on these
contracts formally ceased on their termination
in August 2018. Costs were signicantly
impacted by client-driven scope changes and
the Group has submitted claims and variations
to the value of circa £95m in respect of these
costs (2021: circa £95m). The Group has taken
extensive legal advice on our entitlement, and
we have been successful in two adjudications
supporting the validity of the Group’s position.
The claim is progressing in line with the original
expected timetable. Taking into account the
requirements of IFRS 15, the Group had
constrained the revenue recognised in prior
periods to the extent that it was highly probable
not to result in a signicant reversal in the
future. At 30 June 2022, the Group has updated
its assessed recoverability in accordance
with IFRS 15. Given the progress, in line with
expectations during the year, this is unchanged.
The Group has also updated its expected credit
loss provision in accordance with IFRS 9 for
which there was no material change in the
required provision since the prior year end.
Total equity at the year-end was £132.1m
(2021: £134.1m).
Capital allocation and dividends
The Board is committed to maintaining a strong
balance sheet, which provides the Group
with competitive advantage in its market and
supports our growth strategy. Our capital
allocation priorities are:
strategic opportunities
A strong balance sheet is an important element
in delivering the Group’s Sustainable Growth
Strategy, as it provides a competitive advantage
in the market, supports the Group’s disciplined
approach, and provides condence to our
clients and supply chain. We are also able to
allocate capital to assist the development of
our adjacent markets. Furthermore, and as
demonstrated by the recent acquisition of the
water businesses of nmcn, a strong cash balance
sheet enables the Group to react quickly to
strategic opportunities, including bolt-on
acquisitions that enhance our capabilities
and increase future value.
Financial review
continued
56
Galliford Try Holdings plc
The current outlook across our markets remains
encouraging and supports our strategy, but the
Group ensures that it is prepared for any
adverse change in market conditions that may
arise. Our strong balance sheet is particularly
important for the Group to continue to operate
its disciplined approach to contract selection
and focus on operating margin, irrespective of
any short term economic concerns. The recent
inationary pressures clearly demonstrate the
value and importance of the Group’s risk
management framework and focus.
The Board understands the importance of
dividends to shareholders, and in setting its
dividend considers the Group’s protability,
its strong balance sheet, high-quality order
book and longer term prospects. Consistent
with this approach the Group expects dividend
per share to increase in line with earnings, with
dividend cover of 2.0 times annual earnings.
We continue to assess the cash requirements
of the business to ensure the Group remains
well positioned to deliver on its Sustainable
Growth Strategy and has sufcient funds to
invest in the business. Given the capital
allocation priorities and requirements set
out above, the Board anticipates retaining
average month-end cash and PPP assets of
£175m to £250m to support delivery of our
nancial targets to 2026. For the year ended
30 June 2022, the aggregate of month-end
cash and PPP assets was £221m, towards the
top of this range early in the strategy period.
Where average month-end cash and PPP asset
increase above the level required, then the
Board will consider making additional returns
to shareholders.
In line with this approach, on 21 September
2022, we announced an initial share buyback
programme to repurchase up to £15m of
ordinary shares.
Contingent liabilities
The directors ensure that contingent liabilities
are appropriately assessed, documented and
monitored. More information can be found in
note 28.
Going concern and Viability Statement
Our going concern statement, together with
further related information, can be found in the
Directors’ report on page 101. Our Viability
Statement can be found on page 54.
Financial targets
Objective
Focus on bottom line margin growth.
2026 target
Divisional operating margin growth to 3.0%.
Divisional operating margin
1
2.4%
Actual 2022
2.0%
Actual 2021
Objective
Disciplined contract selection and
sustainable revenue growth.
2026 target
Revenue growth towards £1.6bn.
Revenue
£1, 237. 2m
Actual 2022
£1,124.8m
Actual 2021
Objective
Maintain strong balance sheet.
2026 target
Operating cash generation.
Average month-end cash
£174m
Actual 2022
£164m
Actual 2021
Objective
Sustainable dividends.
2026 target
Dividend cover 2.0x.
Dividend per share
8.0p
Actual 2022
4.7p
Actual 2021
1 This is dened as the pre-exceptional operating prot before amortisation as a percentage of revenue
for the total of the Building and Infrastructure segments (note 2). This measure represents the trading
performance of the Group’s primary operations.
2026 target20222021
2.0%
2.4%
3.0%
20222021
4.7p
8.0p
2026 target20222021
£1.1m
£1.2m
£1.6m
20222021
£164m
£174m
57
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Performance – Building
2022
2021
Revenue (£m)
789.1
789.2
Operating prot (£m)
18.9
15.9
Operating prot margin (%)
2.4
2.0
Order book (£m)
2,047
1,920
Building (which includes our FM business)
had a revenue of £789.1m (2021: £789.2m),
generating an operating prot before
amortisation of £18.9m (2021: £15.9m), which
represents a margin of 2.4% (2021: 2.0%).
Revenue is in line with the previous year
as a result of some delays to new contracts
towards the end of the nancial year, reecting
increased length of client procurement in
response to rising ination. The improved prot
reects the continuing improving performance
of projects that were added to the order book
in recent periods in line with our margin
improvement targets.
Our FM business continues to complement our
operations by providing high-quality building
maintenance services. We continue to grow
the capabilities of this operation, with a specic
focus on decarbonising existing buildings
through retrot and other interventions.
This ‘green retrot’ capability will grow over
the coming years and we plan to allocate some
additional capital to support this growth.
Building won contracts and positions
on frameworks worth over £945m,
(2021: £641m). Signicant appointments
and wins for Building included:
Buildings, Construction and Infrastructure
PB3 framework which covers projects
across all public sector buildings.
Education 2021 Construction Framework.
on behalf of Scottish Borders Council and
Hub South East.
in Milton Keynes.
for Education (DfE) Net Zero Carbon in
Operation (NZCIO) scheme for Greenhead
College in Hudderseld.
(CCS) and Associated Services Framework
covering projects worth up to £20m across
the North East, North West, East of England
and South East to drive economic growth.
In addition, the business has been appointed
to Lot 3, which includes projects above £70m
in value.
Services (SBS) second generation Hard FM
framework, to deliver Security, Fire and Hard
FM Managed Services valued up to £800m
by SBS.
Building’s order book stands at £2,047m,
compared to £1,920m last year including
31% in Education, 23% in Defence and
Custodial, 18% in Facilities Management
and 11% in Health.
Operating review
A strong performance
We delivered a very strong set of results during the
nancial year, with improved margin and prot growth
across our core businesses comprising Building,
Infrastructure and PPP Investments.
We secured £1.4bn of work, contributing to an overall
order book at 30 June 2022 of £3.4bn (2021: £3.3bn).
58
Galliford Try Holdings plc
Building a high-quality order book
Our order book underpins our future plans and gives us excellent medium
term visibility of pipeline, meaning that no part of the business needs to take
on inappropriate levels of risk. Its composition is therefore pivotal, which is
why we seek to build a high-quality order book.
Our condence in the quality of the order book comes from key features of
its composition:
risk, our ability to put appropriate mitigations in place, and our ability to
successfully deliver quality projects.
in the UK as they help mitigate risk by enabling us to work within
established and well-understood terms and conditions and provide
consistent pipelines of work (page 13).
(2021: 87%).
risk by working with repeat clients on a relationship basis, and provides
a strong pipeline of future opportunities.
sectors (2021: 91%), and 9% in the private sector (2021: 9%) with
carefully selected blue-chip clients.
to bid with the appropriate discipline and selectivity.
was secured (2021: 90%).
indication of the size of risk being accepted.
less than £20m.
Strong visibility of workload Strong visibility of workload
A
B
C
D
E
Bu
il
din
g
£2.0
bn
£m
A
Education
640
B
Defence & custodial 476
C
Facilities management 362
D
Health
228
E
Commercial & other 341
£m
A
Highways
622
B
Environment
774
A
B
Infrastructure
£1.4b
n
F
Y22FY21FY20
£3.2bn £3.3bn
Order book by client type
81
%9
1%
9%
19
%
£3.4b
n
9%
91%
Public and re
g
ulated Private
59
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Performance – Infrastructure
2022
2021
Revenue (£m)
441.9
329.2
Operating prot/(loss) (£m)
10.8
6.0
Operating prot margin (%)
2.4
1.8
Order book (£m)
1,396
1,348
Infrastructure’s revenue was £441.9m
(2021: £329.2m). As expected, revenue
increased due to the higher level of activity
from the AMP7 programme in the water sector.
Additionally, the acquired water operations
of nmcn plc (in administration) contributed
£74.1m revenue in the year. Infrastructure
generated an operating prot before
amortisation of £10.8m (2021: £6.0m)
which represents a margin of 2.4% (2021: 1.8%).
The improved prot performance is in line with
our expectations, and includes the benet of
new contract frameworks.
Following the acquisition of nmcn’s water
businesses in October 2021, we have
restructured our Environment business to
provide enhanced service delivery across UK
operations including water, engineering, off-site
build and asset optimisation, and asset security.
The acquisition has provided the Group with
additional geographic scale and increased
capabilities in the water sector, further
supplemented by the acquisition of MCS
Control Systems Limited in July 2021 (note 31).
Infrastructure won contracts and positions on
frameworks worth £466m (2021: £590m).
These included:
(PP) North West Framework valued at
£1.8bn in the North West of England,
in conjunction with the Building business.
Framework for National Highways.
Infrastructure had an order book of
£1,396m, compared to £1,348m last year,
including £622m in Highways and £774m
in Environment.
Performance – PPP Investments
2022
2021
Revenue (£m)
6.2
6.4
Operating loss
(0.9)
(1.8)
Net interest income
3.9
3.9
Directors’ valuation (£m)
47.5
49.1
With the reduction in traditional PPP/PFI
bidding opportunities, PPP Investments
has continued to move its focus towards
co-development of Private Rented Sector
(PRS) projects. During the year, its rst scheme,
in Cardiff, obtained planning consent and
the business is working towards reaching
nancial close with an operator which will allow
construction to commence during the next
nancial year. At the year end it was the
preferred bidder on two further PRS schemes
with a gross development value of c£200m and
anticipates further opportunities in the future.
At the year-end, the directors’ valuation of
our PPP portfolio was £47.5m (2021: £49.1m),
which is the fair value included in the balance
sheet reecting a blended discount rate of 7%
(2021: 7%). The valuation compared with a
value invested of £35.7m (2021: £36.2m). There
is an active secondary market for these assets,
which generated an annuity interest income of
£3.9m (2021: £3.9m) and contributes to our
balance sheet strength.
Operating review
continued
60
Galliford Try Holdings plc
Stakeholder engagement
Consideration of stakeholders is ingrained in
the way we conduct business and our Board
remains committed to considering the
consequences of our decisions on different
stakeholders and acting in a way that promotes
the long-term success of the business.
How the Board engages with
our stakeholders
The directors are committed to the long-term
success of the Group and play an active role
in understanding, considering and addressing
stakeholder interests. Engagement takes place
both directly and indirectly and is rooted in
the principles of our Code of Conduct which is
signed by the Board and outlines our duties to
our colleagues, clients, suppliers, communities,
the environment and governance.
Details of how we engaged with key
stakeholders and how their interests inuenced
Board decisions during the nancial year are
set out on the following pages.
In 2019, we established a Board-level
Committee chaired by Senior Independent
Director Terry Miller, to review and oversee
the Group’s relationships with key stakeholders.
This Stakeholder Steering Committee identies
ways to create two-way communication
between stakeholders and the Board, and
ensures their views are considered in Board
discussions and decisions. The Committee met
twice during the year, as discussed on page 67.
This information complements regular updates
to the Board which include key interests of
our stakeholders such as Health and Safety,
which is the rst agenda item of every meeting;
people matters; sustainability and changing
market dynamics with regard to client and
supplier priorities.
The Board additionally receive presentations
on these matters throughout the year,
which provide in-depth updates from each
stakeholder group.
Directors gain a rst-hand insight into
our culture in action through site visits,
presentations from our businesses on
operational matters and information in monthly
Board packs. These enable discussion around
managing the interests of our people, clients,
suppliers and communities.
Direct engagement with investors also takes
place through investor presentations and the
Annual General Meeting.
s172(1) statement
The Board remains committed to carrying out its obligations under
the Companies Act.
61
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Who and why
Key business and
sustainability
stakeholder
interests identied
in our Stakeholder
Materiality Matrix
How we engage
Actions in the year
Outcomes
Our people
We are reliant
on our people
to achieve
our purpose
p24
and Health
and safety
p21
and wellbeing.
and culture.
learning and
development.
progression.
and benets.
Embedding and reinforcing our culture is a continuous
process. We ensure employees understand our culture
and purpose from the recruitment stage. On joining, all
employees take part in an induction with members of
our Executive Board, outlining our purpose, strategy,
values and business processes and giving the opportunity
to ask their questions. Graduates attend a bespoke
welcome event.
New starter and refresher training ensure our culture
and processes are embedded. Our Employee Engagement
Group seeks the views of employees on strategic decisions
and provides updates from the business.
Engagement also takes the form of a roadshow from our
Chief Executive, emails from him to all staff, e-bulletins,
an employee magazine, PDRs and toolbox talks.
Access to our Employee Assistance Programme
offers support to our people while our whistleblowing
hotline enables them to condentially report suspicion
of wrongdoing.
Board engagement
the Employee Forum meets twice a year to discuss
matters important to employees.
behavioural safety
programme.
Employee Engagement
Survey to gauge
employee sentiment
on key areas.
second all staff
virtual roadshow
with national and
local information
for our staff.
induction sessions.
focused on spotlighting
different communities
to promote inclusion
through awareness.
expanded our
Wellbeing
Wednesdays
programme.
continue to be
addressed by our
updated strategy.
believe we give
Health & Safety
a high priority.
advocacy score.
are motivated by
our vision.
Clients
Satised clients
are essential
for a sustainable
and protable
business
p35
stability and
ability to deliver.
and quality.
carbon and
sustainability
objectives.
social value.
Collaborative relationships provide the platform for our
teams to provide trusted advice and focus on performance
with clear customer priorities and outputs all underpinned
by our accreditation to the ISO 44001 Collaborative
Business Relationships Standard.
On appointment, we carry out a Customer Start
Meeting which identies outcomes for the end of
the project discussions and are retained for record
purposes. Dedicated quality managers conduct
regular audits, complemented by our internal audit
department and external audits of our ISO 9001
certied management system.
Frameworks allow us to deepen our relationships with
our client and stakeholder groups which leads to greater
innovation and better public infrastructure.
client discussions on
areas of challenges and
opportunity such as
service delivery, supply
chain disruption from
Brexit and learnings
from Covid-19, the
economic environment
and the drive for
sustainability.
carbon and digital
capabilities to help
achieve client
objectives.
and win places on
frameworks with new
and existing clients.
order book is in
frameworks.
business.
Stakeholder engagement
continued
62
Galliford Try Holdings plc
Who and why
Key business and
sustainability
stakeholder
interests identied
in our Stakeholder
Materiality Matrix
How we engage
Actions in the year
Outcomes
Suppliers
The majority of our
work is delivered
in partnership with
our supply chain
so they must be
aligned to our
values and
objectives
p38
and wellbeing.
and prompt
payment.
of work.
relationships.
training,
educational
resources and
learning
opportunities.
We seek to build long-term relationships with key
suppliers and contractors who share our principles.
Robust contracts set the terms for both parties in our
relationships, and regular meetings, workshops and
working groups ensure two-way communication.
Through our Advantage through Alignment programme
of support, training and education, we align our
suppliers and subcontractors with our working practices,
our values and our vision.
key subcontractors
through our Advantage
through Alignment
programme.
Partners Programme
to support supply
chain with their
carbon upskilling.
the Supply Chain
Sustainability School.
continue to be
addressed by our
updated strategy.
unit core trades
spend with
Aligned
subcontractors.
paid within
60 days.
of Supply Chain
Sustainability
School.
Communities
We want to be
welcomed in the
communities we
operate in and
create greater
social value where
we operate
p32
safety and
environment.
buildings and
infrastructure.
local labour,
resources and
employment
opportunities,
educational
opportunities
and wider
investment
in their
community.
We engage with local communities through town
halls, newsletters, project websites, social media,
press releases and planning meetings.
As a dedicated Partner of the Considerate Constructors
Scheme, we strive to continuously improve the image
of the industry, focusing on the key areas of safety,
community, environment, workforce and appearance.
Through events such as Build UK’s Open Doors,
recruitment fairs, school visits and site tours, we
showcase our industry and invite communities to
learn more about our industry, business, projects and
careers on offer.
the social value of our
work by supporting
local business,
providing employment
and training, charitable
donations and
volunteering for
local causes.
our partnership with
the Social Value Portal.
capability to report
our Social and Local
Economic Value
(SLEV).
CCS score.
of projects
delivering more
than 25%of
percentage of
contract value.
charitable
donations.
Shareholders
We want our
shareholders to
have condence
in the long-term
success of
our business
business model
and strategy.
performance
and dividend
policy.
governance.
business.
We engage directly with our shareholders through
investor roadshows; face-to-face, video or telephone
communications; Capital Markets Days, results
presentations and webcasts; analyst briengs;
AGMs; our Annual Report; consultations;
and Regulatory News Service announcements.
Indirect engagement includes an up-to-date website,
press coverage, engaging in social media, trading
updates; corporate and nancial videos; and
contributions to investor decision-making resources.
brieng for investors
and provided a
recording on
our website.
continue to be
addressed by our
updated strategy.
per share.
Policies relating to each of these stakeholder groups can be found in the pages on our website. Risks are detailed from page 43 and further information
is contained in the Sustainability section from page 20.
63
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Stakeholder engagement
continued
Considering stakeholder interests
when acquiring nmcn water
Overview
Soon after the launch of the Group’s Sustainable Group Strategy,
nmcn plc announced that it had entered into administration
after a planned renancing of the business collapsed.
When deciding to acquire part of the business, the Board carefully
considered the following factors:
Whether the acquisition t with the strategy to grow in adjacent
and complementary markets.
The nmcn water business’ geographic coverage, customer
relationships and technical capabilities in relation to how
complementary they were to Galliford Try’s existing
operations or whether it would create duplication.
The audited revenue of the businesses being acquired and
prots prior to subsequent re-statements.
The purchase price, transaction and restructuring costs,
contractual liabilities and commercial and legal terms.
The following stakeholder interests were considered:
The management resource taken to lead integration of the
businesses and the impact on the existing people within
the business.
Potential impact on existing clients and whether time would
need to be diverted from those operations.
The future of the employees within the nmcn business.
Our ability to successfully deliver for our new clients.
Supply chain considerations.
Potential shareholder returns.
Broadening capabilities to serve clients and communities
nationwide as a result of the acquisition.
Who did the Board engage in making its decision?
The Board liaised with a cross-section of stakeholder groups
including the Managing Director of the Environment business,
the General Counsel & Company Secretary, HR Director and
external specialist advisors to consider all aspects of the
transaction, including the interests of existing employees,
clients and shareholders.
The result
Galliford Try completed the acquisition of the nmcn water
businesses on 8 October 2021. The transaction protected the
jobs of more than 900 directly employed staff as well as ensuring
continuity for the clients and communities served by the nmcn
business, protecting the vital water operations the business carries
out. Setting up a dedicated integration team to combine the two
businesses also meant that existing operations were not impacted
for existing staff and clients.
64
Galliford Try Holdings plc
Informing and engaging
our investors
As the lockdown measures eased, we took the
decision to hold a face-to-face Business Brieng
with the purpose of giving detailed insights into
parts of the business, introduce investors and
analysts to some of the management team to
demonstrate the culture of our business and
expertise of our team, to provide a deeper
understanding of where the controlled revenue
and margin growth targeted through our strategy
would come from, and to provide a channel for
people to directly question our Board and
management on key topics.
www.gallifordtry.co.uk/investors
65
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Among the key events of the year, we oversaw
the Group’s strong response to the Covid-19
pandemic and support to staff, continued to
monitor the successful execution of the
strategy, including the acquisition of nmcn’s
water business, and appointed Alison Wood
and Sally Boyle to the Board as non-executive
directors. As Chair-designate, Alison will
succeed me as I retire from the Board on
21 September 2022, ensuring a smooth
transition of the role. More information on
strategy and Board appointments can be
found in my statement in the Strategic report.
Sustainable value for all stakeholders
The Group’s strategy is designed to create
sustainable value for all of our stakeholders.
In particular, we are a highly people-orientated
business, and we continue to listen carefully
to employees through both surveys and the
Employee Forum. Our Stakeholder Steering
Committee also plays an important function,
ensuring effective stakeholder engagement.
Sustainability is also integral to our strategy
and the Board will carefully monitor the
Group’s progress towards its net zero goals.
Chairman’s review
Governance overview
Maintaining high standards
of corporate governance
On behalf of the Board I am pleased
to present the Company’s corporate
governance report for the year ended
30 June 2022. A robust corporate
governance structure supports the
decision-making needed to implement
our strategy, helping us to deliver
sustainable performance and
long-term stakeholder value.
Board leadership and company purpose
p76
Division of responsibilities
p77
Composition, succession and evaluation
p77
Audit, risk and internal control
p78
Remuneration
p78
Corporate governance
Considering our stakeholders in the decisions we make is not only the right thing
to do, but building meaningful relationships with key parties is critical to achieving
both our day-to-day objectives and long-term ambitions.
66
Galliford Try Holdings plc
Employee voice and
stakeholder engagement
During the year we carried out an employee
survey. We were delighted to achieve a
participation rate of 74% of those invited and
an above average engagement rate (page 25).
While overall responses were positive, there
are also some areas where we can use the
feedback provided as a spur to do better,
such as improved articulation of career paths,
and we will address feedback from the survey
in the coming year. The Board takes a keen
interest in the Group’s culture, as I discuss in
my statement in the strategic report.
for further information.
The Employee Forum, introduced in 2019,
meets three times a year and gives employees
another route, outside of line management
structures, to provide suggestions and
ideas about working practices. These are
communicated to the Board by the Employee
Forum chair, enabling the Board to consider
employees’ feedback and opinions when it
makes decisions about the Group’s operations.
Focus areas during the year have included the
employee engagement survey, our wellbeing
approach, the introduction of Total Reward
Statements, exible and agile working, and our
approach to returning to the Group’s ofces
post-Covid.
Engagement with our wider stakeholders is
vital to the success of the business and the
Board factors their interests into its discussions
and strategic decision-making. Our Stakeholder
Steering Committee met twice during the
year, to review the ways we engage with key
stakeholders and ensure that these evolve and
remain appropriate to the Group’s strategic
priorities. Our key stakeholders are detailed
on pages 61 to 65.
Our strategy
We are making good progress towards our
Sustainable Growth Strategy and our target
of 3% divisional and operating margins across
our Building and Infrastructure divisions.
The acquisition of nmcn’s water business
during the year is fully aligned with our strategy
and enhances our capabilities. The Board
thoroughly reviewed the strategy at our annual
strategy meeting and we are satised that it
remains appropriate and aligned to the Group’s
purpose. This also led to the acquisition of
MCS Control Systems in July 2022.
Carbon
We recognise the critical importance of
climate change and the impact of our business
operations on the environment. We manage
and mitigate our environmental impacts
through our ISO 14001 certied management
system and will continue to work towards
reducing our carbon footprint, focusing on
our ofces, site accommodation, eet and
site waste.
In June 2021, we published our commitment
to achieve net zero across the Group’s own
operations by 2030 and across our whole
value chain by 2045, validated by Science
Based Targets. Investments in this area
include appointing a Director of Sustainability,
recruiting a Low Carbon Manager, establishing
a Carbon Reduction Group, dedicated carbon
e-learning for all employees and the launch of
our Net Zero Partners programme.
section on pages 28 to 31 for further information,
and pages 48 to 53 our reporting under the Task
Force on Climate-Related Financial Disclosures.
Communicating effectively with
shareholders and investors
During the year, we have continued to engage
positively with our shareholders, prospective
investors and major institutions, combining
face-to-face meetings, technology and virtual
platforms to good effect. We have updated
investors on key activities, our response to the
pandemic and cost ination and areas of focus
for the Board, as well as our strategic plans for
the Group. In May 2022 we wrote to major
shareholders offering the opportunity to
meet the Chair-designate, Alison Wood.
Further detail can be found on page 81.
The Board and Audit Committee continue
to monitor the Government’s proposals
for restoring trust in audit and corporate
governance, with a view to implementation
and compliance.
Board performance evaluation
The 2018 UK Corporate Governance Code
(the “Code”) requires the Board to have an
externally facilitated evaluation at least every
three years, and this took place in February and
March 2022. Overall, the outcome was positive,
nding that the Board benets from a highly
experienced group of non-executive directors,
with skillsets appropriate to the Group’s
strategy, and operates in an environment of
healthy challenge and an appreciation of the
Group’s stakeholders. The integration of the
new non-executive directors was identied
as an area of focus, to ensure that the Board
continues to perform well as its membership
evolves. Further details about the process can
be found on page 79.
Looking forward
This is my last year as your Chairman and
I would like to close by thanking shareholders,
Board colleagues and the Company’s
employees for their support during my seven
years in ofce. I have thoroughly enjoyed my
time at Galliford Try and leave the business
with a capable Board and management team,
strong balance sheet, market-leading position
and good progress towards its Sustainable
Growth Strategy. I am delighted to welcome
Alison to Galliford Try as a Non-executive
Director and my successor. She has a wealth
of experience and her appointment will further
strengthen the independence and the
experience of the Board.
On behalf of the Board
Peter Ventress
Chairman
67
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Peter Ventress
Chairman
Appointment date:
Peter joined the Board on
30 April 2015 and was appointed Chairman on
11 November 2016.
Board experience:
External appointments:
Peter joined the Board
of Howdens Joinery Group Plc on 1 July 2022 as
Chairman Designate and Non-executive Director
and assumes the role of Chairman with effect from
21 September 2022. Peter is also Chairman of
Bunzl plc, the FTSE 100 specialist international
distribution and services group.
Skills and experience:
Peter has signicant
experience of chairing boards and of being a
Non-executive Director of both public and private
companies. He brings a wealth of commercial,
nancial and high-level management experience,
including being former Chief Executive Ofcer of
European textile service business Berendsen plc
from 2010 to 2016. He has also held several senior
executive roles, including International President
of Staples Inc and Chief Executive Ofcer of
Corporate Express N.V. In 2008, he was appointed
head of all Staples’ activities outside the United
States and Canada. Peter was formerly a Non-
executive Director of Softcat plc, Premier Farnell plc,
Staples Solutions BV and Signature Aviation plc.
Directors and Executive Board
Our Board
Bill Hocking
Chief Executive
Appointment date:
Bill was appointed as
Chief Executive on 3 January 2020.
Board experience:
Skills and experience:
Bill is a civil engineer
with more than 35 years of experience in the
construction industry. He has full day-to-day
responsibility for delivering the Group’s strategy,
having regard to the Group’s responsibilities
to its shareholders, customers, employees and
other stakeholders.
Bill joined Galliford Try as Managing Director of
Construction in September 2015. He was previously
at Skanska UK plc, which he joined in 1990 and
where he held the position of Executive Vice
President on the Executive Management Team
from 2008. From 1 August 2016 until his
appointment as Chief Executive of Galliford Try,
Bill was Chief Executive of the Group’s
Construction & Investments division.
Andrew Duxbury
Finance Director
Appointment date:
Andrew joined the Board on
26 March 2019 as Finance Director.
Board experience:
Skills and experience:
Andrew is a Fellow of the
Institute of Chartered Accountants in England and
Wales, with extensive knowledge of the operating
environment in construction. He has operational
responsibility for managing the Group’s nances and
oversees the Risk and Sustainability, Internal Audit,
Finance, Tax and Treasury, IT and Shared Service
Centre functions. He chairs our Carbon Reduction
and Social Value Forum on a quarterly basis.
He joined Galliford Try in March 2012 as
Group Financial Controller and from 2016,
held a number of operational nance roles,
including Finance Director of Linden Homes.
Prior to joining Galliford Try, Andrew worked
for PwC.
N E E
R
Alison Wood
Non-executive Director and Chair-designate
Appointment date:
Alison was appointed to the
Board on 1 April 2022.
Board experience:
Skills and experience:
Alison has a background
in engineering, economics and management and
extensive corporate experience with leading
engineering companies. She spent nearly 20 years
at BAE Systems PLC in a number of strategy and
leadership roles, including as Group Strategic
Director, and was the Global Director of Strategy
and Corporate Development at National Grid PLC
from 2008 to 2013. Alison has previously held
Non-executive Director positions with BTG PLC,
Thus Group PLC, e2v PLC, Cobham PLC and
Costain plc.
External appointments:
Alison is a Non-executive
Director and Chair of the Remuneration Committee
at TT Electronics PLC and Capricorn Energy PLC
and Senior Independent Non-executive Director
and Chair of the Remuneration Committee at
Oxford Instruments PLC. Alison is also Senior
Independent Non-executive Director and Chair
of the Remuneration Committee at the British
Standards Institution.
Terry Miller
Senior Independent Director
Appointment date:
Terry was appointed to the
Board on 1 February 2014.
Board experience:
Skills and experience:
Terry brings strong
commercial experience to the Board, gained
at a senior level in both the public and private
sectors. Terry was a Trustee of the Invictus Games
Foundation and previously General Counsel for
the London Organising Committee of the Olympic
and Paralympic Games (LOCOG). Her LOCOG
role included experience of major construction
projects in overseeing negotiation of all overlay
construction contracts for the London 2012
Olympic and Paralympic Games. Prior to her
LOCOG appointment, Terry spent 17 years with
Goldman Sachs in London and was its International
General Counsel.
External appointments:
Terry is a Non-executive
Director of Goldman Sachs International and
Goldman Sachs International Bank, part of the global
Goldman Sachs Group. She is also a Non-executive
Director of insurance company Rothesay Life plc,
and a Non-executive Director and Senior
Independent Director of Stelrad Group plc.
Gavin Slark
Non-executive Director
Appointment date:
Gavin was appointed to the
Board on 13 May 2015.
Board experience:
Skills and experience:
Gavin has strong leadership
skills and commercial experience gained in his
various executive-level roles. He is Chief Executive
Ofcer of Grafton Group plc and was Group Chief
Executive of BSS Group plc, a leading UK distributor
to specialist trades including the plumbing, heating
and construction sectors.
External appointments:
Since July 2011, Gavin has
been Chief Executive Ofcer of Grafton Group plc,
a publicly quoted distributor of building materials
operating in the merchanting, DIY retailing and
mortar manufacturing markets in the UK, Ireland
and mainland Europe.
N N N
A A A
R R R
68
Galliford Try Holdings plc
Executive Board
Kevin Corbett
CEng MICE MIStructE
General Counsel & Company Secretary
Appointment date:
Kevin joined the Executive
Board on 1 February 2012 and was appointed
General Counsel & Company Secretary on
1 March 2012.
Board experience:
Skills and experience:
Kevin is a solicitor and
chartered civil and structural engineer. He was
previously Chief Counsel Global for AECOM.
Kevin has signicant corporate law, risk
management, insurance, nance, governance,
strategy and extensive UK and overseas experience.
He chairs the Executive Risk Committee
and has responsibility for the management
of Legal, Secretariat, Communications and
Property functions.
Vikki Skene
HR Director
Appointment date:
Vikki joined the Executive Board
on 3 January 2020.
Board experience:
Skills and experience:
Vikki is an experienced senior
HR leader, with more than 20 years’ experience in
both Construction and HR and was previously UK
Employee Relations Director at Balfour Beatty,
where she held a number of senior HR roles. She
joined the Group in June 2016 as HR Director of
the Construction & Investments division.
Ian Jubb
Managing Director, Building
Appointment date:
Ian was appointed to the
Executive Board on 3 January 2020.
Board experience:
Skills and experience:
Ian has nearly 40 years’
experience in the industry, with the last 20 years
including senior positions with Miller Construction
and Taylor Woodrow. He joined the Group as
Managing Director for the North and Scotland
Building division on the acquisition of Miller
Construction in July 2014, subsequently taking
responsibility for all Building Operations in
May 2019.
Mark Baxter
Managing Director, Investments
and Specialist Services
Appointment date:
Mark was appointed to the
Executive Board on 3 January 2020.
Board experience:
Skills and experience:
Mark has a wealth of industry
and PPP experience, gained through a number
of senior roles spanning more than 20 years.
He joined the Group in February 2014 from
Miller Construction, taking on the responsibility
for the Group’s Investments division.
In March 2018, Mark additionally took on
responsibility for the FM division and, in 2019,
the specialist businesses Rock & Alluvium and
Oak Dry Lining. In his career to date, he has held a
number of senior roles including Director for all
PPP activities at Miller Construction.
Board Committee Membership
A
N
R
E
Chair
Board Experience
Construction
Commercial
Finance
Governance
Marisa Cassoni
Non-executive Director
Appointment date:
Marisa was appointed to the
Board on 1 September 2018.
Board experience:
Skills and experience:
Marisa is a chartered
accountant with more than 40 years’ experience
as a nance professional. She has strong leadership
and commercial experience gained through her
various executive and non-executive roles. Her early
career was initially in audit but she progressed into
advisory services including corporate nance,
investigations and restructuring across a variety
of industries and jurisdictions. Marisa’s previous
executive roles include Group Finance Director
of the John Lewis Partnership, Royal Mail Group,
Britannic Assurance Group and Prudential UK
Group. Marisa has over 20 years’ experience as
an Executive Board member and was recently a
Non-executive Director of Skipton Building Society
and Ei Group plc.
External appointments:
Marisa is currently a
Non-executive Director and Senior Independent
Director of AO World plc, a leading European online
electrical retailer.
Sally Boyle
Non-executive Director
Appointment date:
Sally was appointed to the Board
on 1 May 2022.
Board experience:
Skills and experience:
Sally qualied as a solicitor
at Simmons and Simmons. After several years in
private practice as an employment law specialist,
she joined Goldman Sachs International as an
employment lawyer; she later became Head of
Human Capital Management for EMEA. She was
named Partner in 2010 and worked as the
International Head of Human Capital Management,
covering EMEA, India and APAC, until she retired
from Goldman Sachs. Sally was on the Board of
Goldman Sachs International and its Management
Committee and co-chaired the EMEA Diversity and
Inclusion Committee, whilst also sitting on the global
Diversity Committee.
External appointments:
Sally is a Non-executive
Director of the Royal Air Force.
Balance of non-executive
and executive directors
Non-executive 6
Executive 2
Diversity
Male 4
Female 4
plc Board composition
Length of appointment
0–2 years 2
2–5 years 3
5–10 years 3
As at 30 June 2022
A
N
R
A E E
N
R
E E
69
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Governance review
Governance structure
Our governance framework
Our governance and controls framework ensures there is a clear and effective division between the Board, its Committees and operational
management. Our governance framework is detailed below.
The Board promotes the Company’s
long-term sustainable success and is the key
decision-making forum for all strategic matters.
It monitors progress against the Company’s
strategic priorities and ensures there is a robust
and effective control environment, so that
principal and emerging risks are appropriately
assessed and managed.
The plc Board
Board
Board
Committees
Executive
Committees
Our governance
framework
Executive Board and Committees
Executive Board
Oversees the Group’s operational management
and implements its strategy and policies,
including the Health, Safety & Sustainability,
nancial, HR and risk policies, as agreed by
the plc Board.
Executive Risk Committee
Assists the Board and Audit Committee in
monitoring and updating the Group’s principal
and emerging risks. The committee is chaired
by the General Counsel & Company Secretary.
Board Committees
Audit Committee
Oversees nancial reporting matters; keeps
under review the adequacy and effectiveness
of the Company’s internal control and risk
management systems; and seeks to ensure
the effectiveness of the Company’s
whistleblowing arrangements for its
employees and contractors.
for further information.
Nomination Committee
Oversees Board and Committee composition,
succession planning for Directors and other
senior executives, and the Board evaluation,
considering the Board’s balance of skills,
experience, independence and knowledge
of the Company, its diversity, how the Board
works together as a unit, and other factors
relevant to the Board’s effectiveness.
page 82 for further information.
Remuneration Committee
Designs remuneration policies and schemes
that support the Group’s strategy and
promote its long-term sustainable success.
page 87 for further information.
ESG
Stakeholder Steering Committee
A Board-level committee chaired by
Terry Miller, Senior Independent Director.
The Committee meets at least twice a year to
review and oversee the Group’s relationships
with its key stakeholders, identify ways of
creating two-way communication between
stakeholders and the Board, and ensure
stakeholder views are considered in Board
discussions and decisions. During the year
the Director of Sustainability and Risk joined
the Committee.
The Carbon Reduction and Social Value
Forum is chaired by the Finance Director, on a
quarterly basis and enables Board oversight
and inuence across these ESG areas.
The forum has been established to co-
ordinate and oversee the various carbon
reduction initiatives we are taking to achieve
our net zero targets, in addition to the social
value adding practice across our Group with
respect to the work we do in our communities.
This group is comprised of representatives
from across our different operational
divisions and support services functions.
Monitoring of ESG and the outputs from
the Carbon Reduction and the Social Value
Forum are reported by the Finance Director
at plc Board meetings.
Employee Forum
Chaired by Terry Miller and made up of
employee representatives from across
the Group, the Employee Forum meets at
least twice a year and provides a valuable
channel for communicating the views of
our workforce to the Board.
ESG
70
Galliford Try Holdings plc
The role of the Board and its Committees
As at 30 June 2022, the Board comprised the Chairman, ve independent non-executive directors,
the Chief Executive and the Finance Director. The Board considers all the non-executive directors,
including the Chairman, to be independent. To ensure a smooth transition of the important role
of Chair of the Remuneration Committee it is intended that Terry Miller, Senior Independent
Non-executive Director and Chair of the Remuneration Committee, is expected to continue on
the Board in her current roles beyond the normal nine years, which occurs in February 2023,
for a short period until September 2023. This limited extension to the term of ofce is considered
appropriate by the Board and the Remuneration Committee and Terry Miller will remain
independent in character and judgement.
Biographical summaries for each of the directors as at 30 June 2022, their respective
responsibilities and their external directorships are set out on page 68.
The roles of the Chairman, Chief Executive and Senior Independent Director are set out in writing
and summarised below. In line with the Code, the Board reviewed these roles during the year.
These documents can be found on our website at https://www.gallifordtry.co.uk/about/
governance-and-policies/
Role
Summary of responsibilities
Chairman
The Chairman’s responsibilities include:
integrity, openness and debate, and ensuring all directors contribute;
and independence, and that non-executive directors have appropriate
inductions and development;
long-term success;
Company in the industry and nancial community, ensuring effective
shareholder communication;
with the Code.
Chief
Executive
The Chief Executive’s responsibilities include:
the Group’s responsibilities to its stakeholders, achieving objectives and
executing the strategy approved by the Board;
monitoring performance across the Group and taking action where necessary;
and disposals, approving major proposals or bids, and identifying new
business opportunities;
stakeholders; and
and succession planning.
Senior
Independent
Director
The Senior Independent Director’s responsibilities include:
and being available for condential discussions with the NEDs on any matter
relating to the Board, performance or strategy;
Nomination Committee when considering succession for the Chair
(unless the Senior Independent Director is a candidate for the role);
sufcient meetings with shareholders to understand their views; and
senior executive team.
The non-executive directors’ role is to offer advice and guidance to the executive directors and,
when required, constructively challenge the executive directors and Group senior management
on performance and strategy matters.
The roles and responsibilities of the non-executive directors are specied in their letters of
appointment. The letters of appointment are available for inspection on request at the Group’s
registered ofce and will be available immediately prior to and during the 2022 AGM.
The Board has delegated certain responsibilities to its committees. Each committee has its
own terms of reference, available on our website at https://www.gallifordtry.co.uk/about/
governance-and-policies/. These are reviewed annually and updated where necessary,
to ensure they remain in line with best practice guidance.
Director appointments and
succession planning
Alison Wood joined the Board as a
Non-executive Director on 1 April 2022.
The Board intends that Alison will become
Chair of the Board on the current chair stepping
down. Sally Boyle joined the Board as a
Non-executive Director on 1 May 2022.
In line with the Code, all directors, excluding
Peter Ventress who will be stepping down
as previously announced, will stand for
re-appointment or re-election at the 2022
AGM. The directors’ performance continues
to be effective, and they clearly demonstrate
their commitment to their respective roles.
The Nomination Committee reviewed and
refreshed succession plans during the year.
Good progress has been made with rening
our leadership programme to target each
individual’s development requirements and
support them in their progression within
the Group.
71
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Governance review
continued
Operational management
of the Group
Management
succession planning
Allocation of
Group resources
Implementation of
Group policies
Risk management
Contracts up to a
prescribed value
Matters reserved for the Board Matters delegated to management
Group values
and standards
Group strategy, business
plans and annual budgets
Acquisitions, disposals
and contracts over a
prescribed value
Material contracts and
joint arrangements
Approval of
Group policies
Material changes to
Group share capital
Group borrowing facilities
Approval of circulars
and nancial reports
Delegated authorities
The Board continues to operate an established framework of nancial, commercial and operational matters delegated
to management, which is reviewed annually. A summary of the matters reserved for the Board and the matters
delegated to management is set out in the table below.
72
Galliford Try Holdings plc
2021/22 Board and Committee meetings attendance table
Number of meetings
(attended/scheduled)
Board
Audit Committee
Nomination Committee
Remuneration CommitteePeter Ventress
Chairman
8/8
by invitation
2/2
3/3
Bill Hocking
Chief Executive by invitation by invitation
8/8
by invitationAndrew Duxbury
Finance Director
8/8
by invitationn/a n/a
Terry Miller
Senior Independent Director
8/8
3/3
2/2
3/3Gavin Slark
Non-executive Director
8/8
3/3
2/2
3/3Marisa Cassoni
Non-executive Director
8/8
3/3
2/2
3/3Alison Wood
Non-executive Director
1/2
0/1 0/1
n/a
Sally Boyle
Non-executive Director
0/1 0/1 1/1
n/a
Kevin Corbett
General Counsel & Company Secretary
8/8
3/3
2/2
3/3Alison Wood was unable to attend the nal Board, Nomination and Audit committee meetings of the year, in May 2022, due to a pre-existing
commitment to attend the AGM of Capricorn Energy PLC.
Sally Boyle was unable to attend the nal Board and Audit Committee meetings due to illness.
Board activities during the year
The Board, supported by the General Counsel & Company Secretary, ensures that Board
meetings are carefully structured to allow enough time for open discussion. The Board
agenda is structured between standing agenda items, governance requirements and areas
of operational and strategic focus, and the Board regularly reviews and discusses the
following topics:
the Board has a full understanding of the views of major shareholders.
In addition, the Board receives regular presentations from the businesses on operational
matters, helping Board members to stay up-to-date with specic operational matters and
sector-relevant issues. The Board also receives updates from advisers, as and when required.
Board members are encouraged to undertake their own continuing professional development.
The non-executive directors’ roles on other boards also help them to develop a broad range
of skills and perspectives, from which the Group can benet.
73
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Key areas of Board discussion during 2021/22
The Board held eight scheduled meetings during the year and also held ad hoc meetings in relation to succession and strategic matters.
Board and Committee meetings were mostly face-to-face during the year, with virtual or hybrid meetings held when appropriate. Some of the
Board’s key activities and actions taken during the year are summarised in the table below.
Stakeholders considered
Strategy and
implementation
Acquisition
business, providing additional geographic coverage, customer relationships and technical
capabilities to complement the Group’s existing operations.
Covid-19
Sustainability
and Carbon Reduction and Social Value Forum.
Culture,
resources
and people
Operational performance
a presentation from the HS&E Director on the Group’s HS&E performance in 2020/21.
from the Group’s principal divisions throughout the year.
Lintott Control Systems business, part of the nmcn water business.
Succession planning
the appointment of Alison Wood and Sally Boyle, on the recommendation of the
Nomination Committee.
Employees
including observations on the Group’s culture.
Key to stakeholders:
Clients
Shareholders
People
SuppliersCommunities
Governance review
continued
74
Galliford Try Holdings plc
Stakeholders considered
Governance
Compliance
and regulatory developments.
of Reference.
Board evaluation
for improvement and agreed actions to be taken.
process and considered the resulting report and recommendations.
Stakeholder engagement
and in connection with the AGM.
submit questions ahead of the meeting, but none did so.
Committee meeting and considered the feedback from Committee members.
Financial
oversight
Financial resources
Reporting
the Audit Committee.
Risk
the internal audit programme.
proposed updates to the Group risk register.
emerging risks.
Board Strategy Meeting
Collaborating with the Executive
team to review our progress and
strategic priorities to 2026.
The Board held its annual strategy meeting
in April 2022, with the Executive Board
and managing directors of Highways and
Environment. The agenda for the meeting
was agreed between the Executive Board
and non-executive directors.
The Group set out its strategy to 2026 in
September 2021 and the strategy meeting
provided an opportunity to focus on progress
in the rst six months of the plan, as well as
review the Group’s businesses. The meeting
also considered the integration of the nmcn
water businesses acquired in October 2021
and plans for growth.
During its discussions, the Board ensured it
considered the interests of all stakeholders.
The meeting covered key areas and Group
initiatives, including health, safety and
wellbeing, ESG and people matters, and the
Finance Director also provided an update on
nancial performance and investor relations.
As a result of the meeting, the Board
concluded that the strategy remained
appropriate and aligned to the Group’s
culture, and that the Group was making
good progress towards its goals for 2026.
75
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Governance review
continued
UK Corporate Governance Code compliance
As a premium listed company, the 2018 UK Corporate Governance Code (“Code”) sets the standards against which we measure ourselves.
Throughout the year to 30 June 2022, the Board has applied the Principles and complied with all the Provisions of the Code, as set out below:
Principle
How we apply the Principle
Further information
1. Board leadership and company purpose
A. The Board’s role
A successful company is led by an effective
and entrepreneurial Board, whose role is to
promote the long-term sustainable success of
the company, generating value for shareholders
and contributing to wider society.
The Board is collectively responsible for the long-term success
of the Company, including its relationships and engagement
with shareholders and other stakeholders, and operates via
a formal schedule of matters reserved for its decision.
information and list of
matters reserved for
the Board.
B. Setting purpose, values and strategy
The Board should establish the company’s
purpose, values and strategy, and satisfy
itself that these and its culture are aligned.
All directors must act with integrity, lead by
example and promote the desired culture.
The schedule of matters reserved for the Board, which is
reviewed by the Board annually, provides that the Board is
responsible for establishing the values and strategy of the
Company. The Employee Forum chaired by Terry Miller,
Senior Independent Director, remains a key element in the
Board’s oversight of culture. Our Code of Conduct also denes
the behaviours we expect of our people and the ethical
standards to which we adhere.
Culture section on
pages 24 to 27 for
further information.
C. Risk management
The Board should ensure that the necessary
resources are in place for the company to
meet its objectives and measure performance
against them. The Board should also establish
a framework of prudent and effective controls,
which enable risk to be assessed and managed.
The Board reviews and agrees the annual budget in July each
year. In addition, mature risk management and governance
processes are in place to identify, report and manage risk.
These are kept under review to ensure they remain robust and
appropriate. The Executive Risk Committee assists the Board
and Audit Committee in monitoring and updating the Group’s
principal and emerging risks and regularly reports to the Board
on its work.
section on pages 44 to 47
for further information.
also be found in the
Executive Board report
on page 81 and the Audit
Committee Report
(pages 84 to 86).
D. Stakeholder engagement
In order for the company to meet its
responsibilities to shareholders and
stakeholders, the Board should ensure
effective engagement with, and encourage
participation from, these parties.
The Stakeholder Steering Committee, chaired by Terry Miller,
Senior Independent Director, continued to meet during the
year. The Committee oversees relationships with the business’s
key stakeholders, including collating stakeholder views and
reporting these to the Board.
stakeholder relationships
section on pages 61 to 65
for further information.
E. Workforce policies
The Board should ensure that workforce
policies and practices are consistent with the
company’s values and support its long-term
sustainable success. The workforce should
be able to raise any matters of concern.
The Code of Conduct ‘Doing the right thing’ sets out our
organisational policies and procedures and denes expected
behaviours. Group policies dene our approach to managing
health, safety, environmental and social matters affecting our
employees. These policies are regularly reviewed, published
on our website and described in our Annual Report. There is
an independent and anonymous whistleblowing procedure
allowing any employee or third party to condentially raise
concerns. The Audit Committee ensures the whistleblowing
procedure remains effective and that any matters reported
are appropriately investigated and resolved.
section on pages 24 to 27
for further information.
76
Galliford Try Holdings plc
Principle
How we apply the Principle
Further information
2. Division of responsibilities
F. Chair leadership
The Chair leads the Board and is responsible
for its overall effectiveness in directing the
company. They should demonstrate objective
judgment throughout their tenure and promote
a culture of openness and debate. In addition,
the Chair facilitates constructive board relations
and the effective contribution of all non-
executive directors, and ensures that directors
receive accurate, timely and clear information.
The Chairman is responsible for leading the Board, setting the
Group’s purpose, direction and values and ensuring the highest
standards of corporate governance are adhered to. In addition,
the Chairman facilitates constructive Board relations and the
effective contribution of all non-executive directors and,
in conjunction with the General Counsel & Company Secretary,
ensures that directors receive accurate, timely and clear
information. The Chairman’s performance is assessed through
the annual Board evaluation process and through a separate
annual meeting of the non-executive directors, led by the Senior
Independent Director without the Chairman present.
section on page 70 for
further information.
G. Balance of the Board
The Board should include an appropriate
combination of Executive and non-executive
(and in particular, independent non-executive)
directors, such that no one individual or small
group of individuals dominates the Board’s
decision-making. There should be a clear
division of responsibilities between the
leadership of the Board and the Executive
leadership of the company’s business.
The Board comprises the Chairman (who was independent
on appointment), Chief Executive, Finance Director and ve
other independent non-executive directors. The roles of
the Chairman and Chief Executive are separate with distinct
accountabilities set out in their role proles. The Chief Executive
is responsible for the day-to-day executive leadership and
management of the business through dened delegated
authority limits. The non-executive directors provide an
independent view on the running of our business, governance
and boardroom best practice. They oversee and, where
necessary, constructively challenge management in its
implementation of strategy and Group performance.
further information.
H. NEDs’ role and time commitment
Non-executive directors should have sufcient
time to meet their Board responsibilities.
They should provide constructive challenge,
strategic guidance, offer specialist advice and
hold management to account.
The annual Board evaluation process continues to assess
the performance and effectiveness of all directors and their
commitment to meeting their Board responsibilities.
Evaluation on page 79
for further information.
I. The Company Secretary
The Board, supported by the Company
Secretary, should ensure that it has the
policies, processes, information, time and
resources it needs in order to function
effectively and efciently.
The General Counsel & Company Secretary ensures that
the Board receives high-quality papers in a timely manner.
He advises the Board on all governance matters, including
compliance with the Code. He works with the Chairman
and Committee chairs to ensure that the right matters are
escalated to the Board and Committees at the appropriate
time and that sufcient time is devoted to strategic matters.
He oversees Board induction and evaluation arrangements
and supports succession planning and recruitment of new
non-executive directors.
3. Composition, succession and evaluation
J. Board appointments
Appointments to the Board should be subject
to a formal, rigorous and transparent procedure,
and an effective succession plan should be
maintained for Board and senior management.
Both appointments and succession plans should
be based on merit and objective criteria and,
within this context, should promote diversity
of gender, social and ethnic backgrounds,
cognitive and personal strengths.
The Board followed a clear and formal process for appointing
directors, which was followed for the recruitment of Alison
Wood and Sally Boyle during the year. These appointments
were in line with the Board’s succession plans, which were
reviewed and refreshed during the year. The Board and
Executive management recognise the importance of succession
planning to overall business performance. Inclusion and diversity
are key drivers to the Group’s overall development plans.
Committee report on
pages 82 to 83.
K. Skills, experience and knowledge
The Board and its committees should have
a combination of skills, experience and
knowledge. Consideration should be given
to the length of service of the Board as a
whole and membership regularly refreshed.
The Nomination Committee regularly reviews the balance,
composition and structure of the Board, as well as the length
of service of each Board member. The Nomination Committee
also makes recommendations about the re-appointment of
Non-executive Directors and any extensions to their term.
L. Board evaluations
Annual evaluation of the Board should
consider its composition, diversity and how
effectively members work together to achieve
objectives. Individual evaluation should
demonstrate whether each director
continues to contribute effectively.
The Board conducts an annual evaluation of its own
performance and the performance of its committees and
individual directors. An externally facilitated Board evaluation
was conducted this year.
be found on page 79.
77
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Governance review
continued
Principle
How we apply the Principle
Further information
4. Audit, risk and internal control
M. Financial reporting integrity
The Board should establish formal and
transparent policies and procedures to
ensure the independence and effectiveness
of internal and external audit functions
and satisfy itself on the integrity of nancial
and narrative statements.
The Board delegates detailed oversight of the Group’s system
of internal controls to the Audit Committee, to ensure the
integrity of the Group’s full year and half year results and
the Annual Report and Accounts. On the Audit Committee’s
recommendation, the Board reviewed and approved the
2022 half year and full year results and the 2022 Annual Report.
In addition, the Board evaluation process conrmed the
Board’s view that the Group’s system of internal controls
had operated effectively during the year.
N. Fair, balanced and
understandable assessment
The Board should present a fair, balanced
and understandable assessment of the
company’s position and prospects.
The Audit Committee reviewed the 2022 Annual Report and
Accounts in September 2022 and was satised that it presents
a fair, balanced and understandable assessment of the Group’s
position and prospects. The Audit Committee reported its
ndings to the Board.
section on pages 55 to 57
for further information.
O. Risk management and internal
control framework
The Board should establish procedures to
manage risk, oversee the internal control
framework, and determine the nature and
extent of the principal risks the company
is willing to take in order to achieve its
long-term strategic objectives.
The procedures for managing risk have continued to work
well during the year. Both the Executive Risk Committee
and Audit Committee continually monitor the Group’s risk
management and internal control systems on the Board’s behalf.
The Executive Risk Committee (chaired by the General Counsel
& Company Secretary) reviews the Group’s principal and
emerging risks and recommends any changes to risk appetite to
the Board. The Board regularly reviews the Group Risk Register.
process section on page 43
for further information.
5. Remuneration
P. Supporting strategy and long-term
sustainable success
Remuneration policies and practices should
be designed to support strategy and promote
long-term sustainable success. Executive
remuneration should be aligned to company
purpose and values, and be clearly linked
to the successful delivery of the company’s
long-term strategy.
Shareholders approved the current Remuneration Policy at the
2020 AGM. The Remuneration Committee continues to review
remuneration policies and practices to ensure they are aligned
to the Group’s long-term success and based on stretching
performance metrics that reect shareholders’ interests.
Committee Report on
pages 87 to 99.
Q. Remuneration Policy
A formal and transparent procedure for
developing policy on Executive remuneration
and determining director and senior
management remuneration should be
established. No director should be involved
in deciding their own remuneration outcome.
The Remuneration Committee has continued to apply robust
procedures for determining executive remuneration, in line
with the policy approved by shareholders, and operates in
accordance with its terms of reference. The remuneration of
non-executive directors is a matter for the Chairman and the
executive directors. No one can be involved in any discussion
or decision about their own remuneration.
can be found on pages 87
to 89 within the
Remuneration Report.
Committee’s terms of
reference can be found on
our website at https://www.
gallifordtry.co.uk/about/
governance-and-policies/.
R. Independence of remuneration
outcome decisions
Directors should exercise independent
judgment and discretion when authorising
remuneration outcomes, taking account
of company and individual performance,
and wider circumstances.
The Remuneration Committee members are all independent
non-executive directors. The Committee takes advice
from external remuneration consultants and ensures that
remuneration for Board and senior management is suitably
structured to attract, retain and motivate executives, and to
link reward to corporate and individual performance and all
relevant internal and external factors.
78
Galliford Try Holdings plc
Board effectiveness review
In line with the Code, the Board reviews its
own effectiveness and that of its Committees
each year, with an externally facilitated review
at least every third year.
2022 effectiveness review
In 2022, Clare Chalmers Limited (Clare
Chalmers) facilitated the Board evaluation
process. The Board considers Clare Chalmers
to be independent, as it has no other connection
to Galliford Try or its Directors. The brief for
the process was agreed following a scoping
meeting with the Chairman.
The evaluation process included
Clare Chalmers:
Committee papers and terms of reference;
Audit Committee meeting; and
of external advisers who regularly interact
with the Board.
Clare Chalmers produced a report which
was positive about the Board’s functioning.
The report also included a number of
recommendations and suggested actions
(see below), particularly ensuring the successful
integration of new non-executive directors.
The report was discussed with the Chairman
and General Counsel & Company Secretary
and then presented to the Board at its May
2022 meeting. A number of key areas of focus
were identied and agreed as set out below.
The Board will monitor progress against these
as appropriate and any ongoing areas of focus
will form part of the 2023 internal evaluation.
Induction:
ensure appropriate time with
senior managers, advisors and site visits.
Senior Independent Director role:
consider
as part of future succession planning.
Presentations from management:
Consider expanding current participation
of management in plc Board meetings.
views from management and Stakeholder
Steering Committee.
management presentations.
communications to demonstrate
Board oversight.
Actions arising from the 2021 effectiveness review
As shown below, the Board has successfully addressed the actions arising from the effectiveness review in 2021:
Recommendation
Actions taken
Succession planning: review and plan for required Non-executive
Director succession.
The Nomination Committee focused on succession planning during
the year and this work supported the recruitment of Alison Wood and
Sally Boyle.
ESG: review and develop the scope of the Stakeholder Steering
Committee to include oversight of sustainability and its overall
governance within the Group.
The Stakeholder Steering Committee has oversight of sustainability
and its overall governance. The Director of Risk and Sustainability joined
the committee as a member during the year.
Stakeholder engagement: continue to receive regular reports to
the Board from the Stakeholder Steering Committee and Employee
Forum Chair on stakeholder engagement and employee matters.
The Board received regular reports from the Senior Independent
Director, who chairs both the Stakeholder Steering Committee and
the Employee Forum.
Shareholder relations: continue to engage as required with institutional
shareholders on key matters of relevance to the Group and its operations.
The Executive Directors continued to conduct a comprehensive
investor relations programme, with feedback provided to the Board.
79
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Q&A
Q.
A.
with Alison Wood, Non-executive
Director and Chair-designate
Governance review
continued
What attracted you to
Galliford Try?
My background and career is Engineering
which provides a natural attraction to
construction and I have followed Galliford
Try’s progress over time. It is clear to see
that the Company is a leader in its eld, with
fantastic opportunities and a great vision
which have been captured in its Sustainable
Growth Strategy. What I nd personally
admirable is the Group’s people culture, risk
management and integrity when delivering
for the wider society. Since joining Galliford
Try I have been impressed by the quality and
passion of its teams which is evident across
the organisation, from the Boardroom to site.
What are your rst impressions
of Galliford Try?
Galliford Try has an impressive reputation
and portfolio of projects nationwide
and I have been fortunate to have already
beneted from the opportunity to meet
staff on and off site. What strikes me is the
camaraderie of the teams, and the sense of
working towards a common goal. There is
an infectious positivity, and a desire to
do better by anticipating future needs of
stakeholders. An example of this culture
to continuously improve is demonstrated
by the role digital tools and technology are
increasingly playing in day-to-day activities
– from the big to the small – to make
processes more efcient, improve quality
and reduce health and safety risks as well
as to help decarbonise the environment.
What are you most looking forward
to in Galliford Try’s future?
Galliford Try is making a signicant
contribution to the future of the UK, not only
through the buildings and infrastructure it
builds, but the positivity legacy it leaves in
communities through education, upskilling
of people and SMEs and community
engagement. This means the Company
has a chance to be hugely inuential within
society, and it’s great to be part of this.
As I said earlier, I also anticipate the emerging
role of new technology at Galliford Try to
be a force in the construction industry and
I look forward to seeing Galliford Try’s role
in this sphere.
I am looking forward to helping shape
this bright future, and building on
Galliford Try’s successes.
Alison Wood
Non-executive Director and Chair-designate
Galliford Try has an impressive
reputation and portfolio of
projects nationwide and I have
been fortunate to have already
beneted from the opportunity
to meet staff on and off site.
Alison Wood will assume Chair of the Board of
Galliford Try when the current Chair steps down
in September 2022
Q.
Q.
Q.
A.
A.
A.
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Galliford Try Holdings plc
Executive Board report
The Chief Executive chairs the Executive
Board, which is responsible for the Group’s
operational management under terms of
reference set by the Board. This includes
making recommendations to the Board on
all matters reserved for Board authorisation.
The Executive Board focuses on long-term
strategic issues and matters of Group-wide
policy, with health, safety and sustainability and
business ethics being key agenda items at every
meeting, highlighting their importance to the
Group. The Executive Board also receives and
considers regular performance and operational
reports and presentations from business
management. The minutes of Executive Board
meetings are included in the Board packs.
The Executive Board held 11 scheduled
meetings during the year. Additional meetings
are convened to consider and authorise specic
operational or project matters. Meetings
have taken place both in-person and through
hybrid/virtual participation, at all times
observing our Covid-safe procedures and
protocols. The Executive Board also held short
virtual meetings each week throughout the
year. Executive Board members maintain a
visible presence within the business by holding
meetings at regional ofces and visiting ofce
and site locations.
Membership of the Executive Board is detailed
on page 69. The Assistant Company Secretary
acts as Secretary to the Executive Board.
Governance policies
The Group has a suite of governance and risk
management policies, procedures and training
programmes, all of which address the Group’s
legal obligations. During the nancial year, the
Executive Board reviewed and refreshed the
policies, procedures and authority matrices
under which the central functions and
businesses operate.
Reporting, risk, internal audit
and controls
The Governance review, starting on page 70,
details the actions the Group took during the
nancial year, including those with a risk
management focus. The Board’s approach to
risk and internal audit, including its systems
in relation to the preparation of consolidated
accounts, and the material controls of the
Group’s established internal control framework,
are disclosed in the Risk management section
on pages 43 to 47.
A separate programme of 13 internal audits was
also completed across the Group’s operations,
and progress checks were completed against
previous recommendations.
Shareholder relations
The Chief Executive and Finance Director
continued to meet with existing and prospective
institutional shareholders throughout the year.
72 meetings were held with 20 shareholders,
who together represented 45% of the share
register, and 42 meetings with potential
investors. In addition, the management team
attended three conferences in the year, meeting
with 11 institutions. Key areas of discussion
included the Company’s strategy and targets,
dividend policy, capital allocation, future
pipeline and ESG factors, as well as macro-
economic factors such as ination. A Business
Brieng for analysts and investors was held
in the second half of the year, featuring
presentations from senior management on
the Building, Environment and low-carbon
construction areas of the business.
The Finance Director has this year focused on
building strong investor relationships, engaging
with a third-party specialist advisory business
to schedule roadshows and provide further
research coverage, while Proactive Investors
and InvestorMeetCompany have been engaged
to create digital content following news
updates, focusing on retail investors.
The Board as a whole continues to engage
actively with institutional shareholders, in line
with the Financial Reporting Council’s UK
Stewardship Code, on key matters of relevance
to the Group and its operations, such as
governance, strategy or remuneration, or
more general market themes. Specic reports
regarding shareholder views are provided to the
Board for analysis and discussion. Separately,
the Chairman, Senior Independent Director
and other Non-executive Directors are
available to attend meetings with shareholders
and address any signicant concerns that
shareholders may have. The Chairman and
General Counsel & Company Secretary met
one shareholder virtually. Major shareholders
were also invited to meet the Chair-designate.
We plan to hold our 2022 AGM on Friday
11 November 2022 at the ofces of Peel Hunt
LLP, 7th oor, 100 Liverpool Street, London,
EC2M 2AT at 11.30am. The Board will be
pleased to welcome shareholders, answer
questions, listen to suggestions and encourage
shareholders’ participation in the business
to be discussed at the meeting.
With regard to Covid-19, we will follow the
guidelines and best practice in place at the time
of the AGM.
Compliance statement
The Group remains compliant with the Financial
Conduct Authority’s Listing Rule 9.8.6 and
Disclosure Guidance and Transparency Rule
7.2.1. Related information can be found in the
Directors’ report on pages 100 to 102.
Additionally, the Group has complied with
sections 414CA and 414CB as well as 414C
of the Companies Act 2006. Relevant
information can be found throughout the
Strategic report and Governance section of
this Annual Report. The summary table on
page 42 in the Strategic report highlights where
non-nancial information can be found within
this Annual Report.
81
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
I am pleased to present my report
on the Nomination Committee’s
activities during the nancial year
ended 30 June 2022.
This year the Committee focused on Board
succession, including for my own role as Chair
of the Board, following my announcement of
my intention to step down in September 2022,
having served over seven years with the Group.
In line with its succession plans, the Board
recruited two Non-executive Directors,
including my successor, Alison Wood. The
process for identifying the new Chair was led
by the Senior Independent Director and
overseen by the Committee, resulting in
Alison’s appointment as a Non-executive
Director and Chair-designate with effect from
1 April 2022. Alison also became a member
of the Committee on her appointment in
April and becomes Chair of the Board and of
this Committee when I step down. I also led
the search for a new Non-executive Director,
Sally Boyle, who joined the Board on 1 May
2022. Sally became a member of this
Committee on joining.
Composition and remit
The Committee’s membership is detailed on
pages 68 and 69. The General Counsel &
Company Secretary acts as Secretary to
the Committee. At the nancial year-end,
the Committee comprised a majority of
independent non-executive directors,
complying with provision 17 of the 2018 Code.
During the year, the Committee reviewed
and updated its terms of reference in line
with best practice, making only minor
changes. The Committee’s current terms
of reference can be found on the Group’s
website (www.gallifordtry.co.uk).
The Board has delegated the following
principal authorities to the Committee:
and composition.
knowledge, diversity and experience,
including the impact of new appointments.
recruitment of any new directors.
objective criteria.
succession requirements under
active review.
Succession planning below the Executive
Board remained a key area of focus for the
Committee during the nancial year. The
Committee received updates from the HR
Director on progress with implementing the
Group’s succession plan, with a focus on
developing a diverse talent pool of employees
demonstrating high potential for promotion.
During the nancial year, the Committee
prioritised the key activities and areas of focus
set out below.
Calendar of 2021/22 Committee
activities and areas of focus
December
2021
March
2022
of a new Non-executive
Director and
Chair-designate.
April
2022
of a new Non-executive
Director
May
2022
appointment review and
Committee membership.
and approval.
Board appointments
Appointments to the Board are subject
to formal, rigorous and transparent procedures.
The Committee oversees, and makes
recommendations to the Board on the
identication, assessment and selection of
candidates for appointment to the Board.
During the nancial year there were two
appointments to the Board. Russell Reynolds
Associates, an executive search consultancy,
was appointed to assist the Committee
with the search process. Russel Reynolds
has no other connection to Galliford Try or
its directors. The Committee agreed a brief
based on the capabilities, skills and experience
required on the Board and which would
support the business’s strategy.
Nomination Committee report
The Committee’s work on succession
planning and appointing two new
Non-executive Directors has ensured
the Company has a strong, independent
and diverse Board. I am pleased to be
handing over to a new Chair with the
Group in excellent shape.
82
Galliford Try Holdings plc
Appointment – Alison Wood
In October 2021, the Board initiated a search
process led by the Senior Independent Director
to identify a new Non-executive Director to
take on the role of Chair of the Board upon my
stepping down from the role. In making this
appointment, the Committee was seeking a
candidate with:
Director on quoted company boards;
governance;
roles, including strategy.
Alison Wood was selected as the preferred
candidate and the Committee recommended
her appointment to the Board. She was
appointed to the Board as a Non-executive
Director and Chair-designate with effect from
1 April 2022. Alison will seek re-appointment
by the Company’s shareholders at its
forthcoming AGM.
Appointment – Sally Boyle
The Committee’s criteria for appointing a
new Non-Executive Director included:
major organisations;
resources and the capability to add value
to Board discussions;
succession planning; and
of chair of the Remuneration Committee.
Sally Boyle was selected and upon the
recommendation of the Committee she was
appointed to the Board as a Non-executive
Director with effect from 1 May 2022.
Sally will seek election by the Company’s
shareholders at its forthcoming AGM.
Review of the Board’s composition
The Committee regularly reviews the
composition of the Board and its Committees.
The Board evaluation plays an important part
in this process, as it includes an assessment of
whether the Board’s composition and mix of
skills, experience, knowledge and diversity of
opinion remain suitable, in the context of the
Group’s structure, strategy and objectives.
Given the size and structure of our Group,
the composition and size of the Board and its
committees remains appropriate. Further
details on the Board evaluation and its
outcomes can be found on page 79.
To ensure a smooth transition of the important
role of Chair of the Remuneration Committee,
the Committee expects that Terry Miller will
remain on the Board in her current roles
until September 2023, which is beyond the
normal term of nine years. The Board and
Committee consider that this limited extension
to Terry’s term of ofce is appropriate and
Terry will remain independent in character
and judgement.
Inclusion and diversity
The Committee is committed to embedding
inclusion and diversity throughout the Group,
continuing to attract and retain the best
candidates and ensuring the full development of
all Group employees. Inclusion and diversity is a
key consideration when assessing the Board’s
composition, to ensure the development of a
diverse pipeline for succession. The gender
balance at Board and senior management level
is reported in the People and culture section on
page 27. The Committee is also aware of and
supportive of the recommendations of the
Parker Review and will ensure that ethnic
diversity is appropriately considered in
future recruitment to the Board.
The Group has a range of inclusion and diversity
initiatives, including action plans and agile
working arrangements, with a exible culture
and working practices to suit everybody’s
needs. The Group also takes part in industry
and other initiatives to improve inclusion and
diversity, including supporting the National
Association for Women in Construction, the
Leadership & Diversity Group Scotland and
the Supplier Diversity Group.
Galliford Try is an accredited Disability
Condent Employer. This Government initiative
aims to challenge attitudes towards disability,
remove barriers to employment for disabled
people and those with long-term health
conditions, and ensure that disabled people
have the opportunities to full their potential
and realise their aspirations.
For further information on our approach to
gender diversity, please see our People and
culture section on pages 24 and 27.
Peter Ventress
Nomination Committee Chair
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Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
I am pleased to present my report
as Chair of the Audit Committee.
Throughout the year the Committee supported
the Board in fullling its corporate governance
responsibilities, including monitoring and
reviewing developments in corporate
governance, overseeing the internal audit
process, and assessing the integrity of the
nancial statements and the adequacy and
effectiveness of the risk management and
internal control framework of the Group.
Composition of the Committee
All Committee members are independent
Non-executive Directors. Additional details
on the Committee’s members can be found
on pages 68 and 69.
The Committee has continued to ensure
that each member has sufcient knowledge,
training and expertise to contribute effectively
to the Committee’s work, which is a key
requirement of Provision 24 of the 2018 UK
Corporate Governance Code and the FRC’s
Guidance on Audit Committees. The Board
remains satised that, as a whole, the
Committee has competence relevant to
the sector in which the Group operates.
As Committee Chair, I have extensive
experience in numerous roles, which include
Group Finance Director of the John Lewis
Partnership, Royal Mail Group, Britannic
Assurance Group and Prudential UK Group.
I also have experience of being a Non-executive
Director with Skipton Building Society,
AO World plc and Ei Group plc.
Terry Miller has wide-ranging commercial
experience, including construction experience
from overseeing the negotiation of the
construction contracts as General Counsel
for the London 2012 Olympic and Paralympic
Games. She also has considerable experience
as a Non-executive Director and currently
serves as a Non-executive Director with
two Goldman Sachs group companies and a
regulated insurance company. Gavin Slark is
Chief Executive Ofcer of Grafton Group plc,
an independent company operating in the
merchanting, DIY retailing and mortar
manufacturing markets in Britain, Ireland
and Belgium. He was previously Group Chief
Executive of BSS Group plc, a leading UK
distributor to specialist trades including the
plumbing, heating and construction sectors.
Alison Wood joined the Committee on her
appointment as a Non-executive Director
on 1 April 2022. Alison has a background in
engineering, economics and management
and substantial corporate experience with
leading engineering companies. She spent
nearly 20 years at BAE Systems PLC in a
number of strategy and leadership roles,
including as Group Strategic Director, and was
the Global Director of Strategy and Corporate
Development at National Grid PLC from 2008
to 2013. Alison is a Non-executive Director
and Chair of the Remuneration Committee
at TT Electronics PLC and Capricorn Energy
PLC and Senior Independent Non-Executive
Director and Chair of the Remuneration
Committee at Oxford Instruments PLC. Alison
has previously held Non-executive Director
positions with BTG PLC, Thus Group PLC,
e2v PLC, Cobham PLC and Costain plc.
Sally Boyle joined the Committee on her
appointment on 1 May 2022. Sally spent several
years in private practice as an employment
law specialist, before joining Goldman Sachs
International where she became Head of
Human Capital Management for EMEA.
She was named Partner in 2010 and worked
as the International Head of Human Capital
Management, covering EMEA, India and APAC
until she retired from Goldman Sachs. Sally was
on the Board of Goldman Sachs International
and its Management Committee and co-chaired
the EMEA Diversity and Inclusion Committee,
whilst also sitting on the global Diversity
Committee. Sally is also a Non-executive
Director of the Royal Air Force.
The Chairman of the Board, Chief Executive and
Finance Director attend Committee meetings
by invitation, together with the Head of Internal
Audit and the Group Financial Controller. The
General Counsel & Company Secretary, or his
delegate, acts as Secretary to the Committee.
Remit and activities
The Committee met three times during the
year, which it deems appropriate to its role and
responsibilities. The Committee’s delegated
authorities and calendar of prioritised work
have not changed substantially from those
disclosed in previous years and remain in line
with the Code’s requirements.
The Committee’s key responsibilities are:
for nancial reporting;
risk and controls; and
the Group’s procedures for detecting fraud.
The table below summarises the Committee’s
key activities during the nancial year.
The Committee also continues to meet with
internal and external audit teams, without
Executive management present, in order to
discuss any matters which the auditor may
wish to raise in condence.
Audit Committee report
The Committee supported the Board
in fullling its corporate governance
responsibilities, including overseeing the
internal and external audit processes.
84
Galliford Try Holdings plc
The Committee’s terms of reference
are available from the Group’s website
(www.gallifordtry.co.uk).
Calendar of 2021/22 Committee
activities and areas of focus
September
2021
judgments.
2020/21 full-year results,
including external auditor
presentation, going concern
review and approval of
‘fair, balanced and
understandable’ process.
annual results statement
whistleblowing reports.
corporate reform
was considered.
February
2022
judgments.
2021/22 half-year results,
including external auditor
presentation and going
concern review.
2022 results statement.
whistleblowing reports.
May
2022
the Internal Audit Plan
2021/22.
audit plan.
update.
whistleblowing reports.
Reference and
Non-Audit fee policy.
paper on corporate reform
was considered.
Financial Reporting Council
During the year the Financial Reporting
Council’s Corporate Reporting Review Team
(“CRRT”) carried out a review of the Company’s
Annual Report for the year ended 30 June
2021. The response by the Company to the
request for information was discussed with me
in my capacity as Chair of the Audit Committee,
prior to responding to the CRRT. Details of the
enquiry raised by the CRRT and the Company’s
response thereto were also considered by the
Committee. The CRRT has closed its enquiries
and the Company has agreed to enhance
disclosures in a small number of areas in
response to the review. The Committee is
satised that the enhancements proposed and
agreed with the CRRT have been appropriately
incorporated in the 2022 Annual Report.
In June 2022 the FRC concluded its review
and published sanctions imposed on
PricewaterhouseCoopers LLP in relation to its
audit of the Group’s nancial statements in
FY2018 and FY2019. These ndings had no
direct impact on the Group in preparing its
2022 Annual Report.
During the year the FRC also concluded its
review of BDO LLP’s audit of the 30 June 2020
Annual Report, performed as part of its normal
reporting cycle of reviews of auditors. BDO
addressed the matters raised in its planning for
the audit of the June 2022 Annual Report.
External audit
The Company’s external auditor is BDO LLP. Its
appointment followed an audit tender process
undertaken in the second half of 2018 and was
subsequently approved by shareholders.
The audit plan is submitted annually and is
approved by the Committee. The Committee
meets privately with the auditor, and the Chair
of the Committee speaks regularly with the
audit partner throughout the year.
Each year, the Committee assesses the
independence and effectiveness of the external
audit process, which includes discussing
feedback from the members of the Committee
and key senior management within the Group.
The Committee is satised that the external
audit relationship is effective and that BDO
LLP remained sufciently independent in
accordance with the relevant professional
ethical standards.
A resolution is to be proposed at the
forthcoming AGM for the re-appointment
of BDO LLP as auditor of the Group, at a rate
of remuneration to be determined by the
Audit Committee.
Internal audit
Each year, the Committee reviews and approves
the scope of work of the Internal Audit team,
which includes assessing the adequacy of the
team’s resources.
During the nancial year, the Internal Audit
team continued to deliver its agreed internal
audits annual plan and provided commercial
and risk management support across the Group,
at the request of the Committee, the Executive
Board and senior management. Biannual status
reports on commercial health checks, based on
a typical sample of 12 contracts from across the
business, are reported to the Audit Committee.
Projects included in commercial health checks
provide a representative mix of business
units, project values, current commercial
performance and stage of completion.
The Executive Risk Committee reviews the
Group’s risks and reports to the Executive
Board and the plc Board. In addition, the
Executive Risk Committee has continued
to review the procedures in place to identify
emerging risks, as well as its disclosure
obligations. The Executive Risk Committee
has a standing agenda item at its meetings to
review and document emerging risk themes
that could have a signicant impact on our
business. This year, the Executive Risk
Committee has also reviewed the climate-
related risks and opportunities, in support
of our TCFD disclosures. More information
about the Group’s principal risks, its process
of identifying and managing emerging risks,
its long-term viability and its risk management
systems can be found in the Risk management
section on pages 43 to 47.
In line with the Code’s requirements, the
Board reviews an annual assessment of
the effectiveness of the Group’s risk
management and internal control systems prior
to approving the full-year results. This review
covers all material controls, including nancial,
operational and compliance controls. In
addition, the Head of Internal Audit provides an
Internal Audit Report to the Audit Committee
at each Committee meeting, which includes the
status of audits from the agreed internal audit
plan and implementation of agreed actions.
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Annual Report and Financial Statements 2022
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Non-audit services
The Group has policies and review mechanisms
governing the provision of material non-audit
services and safeguarding the objectivity and
independence of the external auditor. These
remained in force throughout the nancial year.
The policy species: the types of non-audit
services for which the use of the external
auditor is pre-approved (i.e. approval has been
given in advance as a matter of policy); the
services for which specic approval from the
Committee is required before the auditor is
contracted; and the services from which the
external auditor is excluded. In respect of
pre-approved services, a nancial threshold
is in place, applicable to individual and
aggregated services in any year. Furthermore,
should the total value of non-audit service
engagements exceed a dened percentage
of the total Group audit fee for the previous
nancial year, the Committee shall consider
and give specic prior approval for any
subsequent non-audit service engagements.
Each year, the Committee assesses the
independence and effectiveness of the external
audit process, which includes discussing
feedback from the members of the Committee
and key senior management within the Group
and from regulatory sources.
Internal control framework
The day-to-day management of our principal
risks is supported by an internal control
framework which is embedded in our
management and operational processes.
The most signicant elements of the
Group’s internal control framework include
the following:
Organisational structure:
each business
unit is led by a managing director and
management team, providing a clear
hierarchy and accountabilities.
Code of Conduct:
the Group promotes
a culture of acting ethically and with
demonstrable integrity. Our ethical standards
and approach are set out in ‘Doing the right
thing’, our Code of Conduct. It is supported
by training modules and its themes and
importance are communicated to new
starters as part of their induction.
Contractual review and commitments:
the
Group has policies and procedures for entering
into contracts which apply across its business
units and operations and are enforced through
the Group’s legal authorities matrix.
Operational activity:
site operations are
performed in line with established business
management systems and processes that
incorporate all operational activities, including
health, safety and environmental procedures,
regular performance monitoring, quality
management and external accountability
to stakeholders.
Financial planning framework:
a detailed
annual budget is prepared for each nancial
year, which is approved by the Board.
Operational and nancial reporting:
an exacting prot and cash reporting and
forecasting regime is in place across the
Group. This emphasises cash ow, income
and balance sheet reporting, as well as health,
safety and environmental matters within
monthly operational reports.
Internal audit:
the Internal Audit team develops
and delivers an annual programme of internal
audits, which includes business unit key control
reviews, audits of Group processes and other
specic risk areas and reviews of signicant
change programmes.
Assurance provided by non-audit functions:
a number of other Group functions provide
assurance in areas including, but not limited to,
health, safety and environment, legal contract
reviews and compliance, and construction
industry regulation.
Signicant issues and other
accounting judgements
The Committee reviewed the integrity of
the Group’s nancial statements and all
formal announcements relating to the
Group’s nancial performance. This included
an assessment of each critical accounting policy,
as set out in note 1 to the nancial statements,
as well as review and debate on the following
areas of signicance:
Contract revenue and provisions:
in
conjunction with the annual audit, the
Committee continued to review key judgments
in respect of revenue recognition and contract
provisions, in relation to certain signicant
long-term construction contracts.
Business combinations:
the Committee
considered the accounting for, and disclosure of,
the acquisition of the water business of nmcn
plc (in administration).
Going concern and viability:
the Committee
considered other commercial and economic
risks to the Group’s going concern status and
longer-term viability and reported to the Board
on its ndings.
Goodwill impairment review:
during the year,
the Committee considered the judgments
made in relation to the valuation methodology
adopted by management and the model
inputs used, as well as the sensitivities used
by management and the related disclosures.
Signicant transactions:
the Committee has
given particular consideration to the accounting
for and presentation of individually signicant
transactions, and areas where alternative
performance measures are required to ensure
that the nancial statements give a fair,
balanced and understandable view of the
Group’s performance, and that statutory
measures are equally clear and prominent.
This specically included the presentation of
the investment in cloud-based commercial and
accounting systems, which has been reported
as an exceptional cost.
PPP portfolio valuation:
the Committee
reviewed the discount rate used to
determine the fair value of each of the
Group’s PPP investments.
Fair, balanced and
understandable consideration
The Committee considers that the 2022
Annual Report and nancial statements are fair,
balanced and understandable, in terms of the
form and content of the strategic, governance
and nancial information presented therein and
that they provide the information necessary for
shareholders to assess the Company’s position
and performance, business model and strategy.
Marisa Cassoni
Audit Committee Chair
Audit Committee report
continued
86
Galliford Try Holdings plc
Committee Chair’s annual statement
I am pleased to present the Directors’
Remuneration Report for the nancial
year ended 30 June 2022. The
Remuneration Report is divided into
three parts: this Annual Statement;
the Directors’ Remuneration Policy
Report; and an Annual Report on
Remuneration, which sets out the
application of the Policy during the
year ended 30 June 2022.
The background to the Remuneration
Report is the Group’s delivery of another
year of improved operational and nancial
performance. In line with the rules of the
Annual Bonus Plan (“ABP”) the Committee
has therefore approved payments for the year
ended 30 June 2022 at 100% of maximum.
For the Long Term Incentive Plan (“LTIP”),
the Committee has approved the vesting of
awards granted to Executives under the LTIP in
March 2020. Based on performance up to the
nancial year ended 30 June 2022, 89% of the
March 2020 LTIP will vest on 13 March 2023,
three years after grant. Further details
of remuneration, in accordance with the
shareholder approved Remuneration Policy,
can be found overleaf.
During the year, and in recognition of the
increasing importance of ESG factors to the
Group and all stakeholders, the Committee
oversaw the development of appropriate ESG
performance metrics, aligned to the Group’s
strategy, which will be incorporated into the
Executive team’s ABP from 1 July 2022.
The Remuneration Committee has continued
to apply the recommendations of the UK
Corporate Governance Code and decisions
relating to remuneration matters are set out in
the relevant sections of this report. This report
has been prepared in accordance with the
relevant provisions of the Companies Act 2006,
The Companies (Director’s Remuneration
Policy and Directors’ Remuneration Report)
Regulations 2019, the Large and Medium-sized
Companies and Groups (Accounts and Reports)
Regulations (Amended) 2013 and the Financial
Conduct Authority’s Listing Rules.
Board and Committee changes
Alison Wood and Sally Boyle joined the
Board and Committee on 1 April and
1 May 2022 respectively. Peter Ventress
will cease to be a member of the Committee
on 21 September 2022, when he will step
down from the Board, with Alison assuming
the role of Chair of the Board.
Remuneration Policy
The Remuneration Policy (the “Policy”) was
submitted to shareholders for approval at
the 2020 AGM, held in November 2020.
The Policy was subject to a binding vote and
was approved by 99.66% of shareholders who
voted. The Policy will expire at the 2023 AGM,
where we will be required to seek approval for
a new binding Policy. The Committee considers
the existing policy and structure comprising
base salary, pension, benets, annual bonus
and LTIP remains appropriate and no changes
are proposed at this time. The Policy is set out
in full on pages 88 to 89.
Remuneration Committee report
Reecting stakeholder interests and the
Group’s strategy, the Committee has
developed key ESG metrics for the
annual bonus plan, starting in 2022/23.
These measures align with the Group’s
strategy encompassing order book,
employees, carbon, community and
supply chain.
87
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Application of Remuneration Policy
in 2022/23
The key elements of how the Policy is being
applied are set out below:
Base salaries:
The Committee continues
to monitor and review pay and conditions
across the Group and the external market.
Taking into account the rising cost of living
and external market conditions, a budget of
4.5% was approved for annual staff salary
increases across the Group from 1 April 2022.
Bill Hocking and Andrew Duxbury’s salaries
were increased by 3.5% from 1 April 2022,
below the average increase across
the workforce.
Annual Bonus Plan (“ABP”):
proposals for the
Annual Bonus Plan for 2022/23 are based
on the 2021/22 performance metrics, which
remain relevant to the Group’s objectives and
are in accordance with the approved Policy,
with the addition of ESG metrics as noted
overleaf. All bonus awards will be subject to
the Committee’s discretion, taking into account
health and safety performance and the
underlying performance of the Group.
2022/23 targets will be disclosed as usual
in the 2023 Annual Report.
LTIP:
no changes to metrics or structure are
proposed for the 2022 awards. The metrics
will continue to comprise earnings per share
(“EPS”) and average cash management.
A summary of the 2021/22 ABP and 2020/23
LTIP outcome can be found in the Annual report
on remuneration on pages 89 to 99.
There will be one advisory vote at the
AGM in November 2022, on the Directors’
Remuneration Report.
Cost of living
Recognising the national cost of living challenge,
we looked at how we could support our
employees and the Group agreed to make
a one-off payment in Autumn 2022 of circa
£1.0m, in total, to over 1,800 of its staff.
Remuneration Committee report
continued
Committee activities during 2021/22
The Committee met three times during the year. The key activities during the year are
summarised below:
Committee activities during 2021/22
July
2021
proposal of 2021/22 annual bonus scheme.
2021 proposal.
September
2021
Bonus Plan awards.
February
2022
considerations for the wider workforce.
Terry Miller
Remuneration Committee Chair
88
Galliford Try Holdings plc
Remuneration Policy and framework
Our approach to remuneration and our
Policy are set out on pages 87 to 94 of this
report. The elements of executive directors’
remuneration are:
Fixed element:
comprises base salary,
taxable benets (such as a company car or
cash equivalent allowance, private medical
and permanent health insurance, and life
assurance), and contribution to a pension.
Variable element:
annual bonus, which
incentivises and rewards the achievement
of stretching annual targets (both nancial
and non-nancial) that support the Group’s
annual and strategic objectives, with
two-thirds of any bonus earned in excess
of 50% of salary required to be deferred
into restricted shares.
Long-term element:
the LTIP incentivises
the achievement of sustained long-term
nancial and operational performance over
a three-year performance period. Any share
awards that vest are subject to a two-year
holding period.
Actual remuneration in 2021/22
The following table summarises the executive directors’ remuneration in 2021/22:
Director
Role
Fixed
remuneration
1
£000
Variable
remuneration
2
£000
Total
remuneration
£000
Bill Hocking
Chief Executive
502
1,455
1,957
Andrew Duxbury
Finance Director
401
1,107
1,508
1 Comprises base salary, taxable benets and pension contributions. See page 95 for further information.
2 Comprises annual bonus awarded and LTIP vesting with reference to performance during the nancial year.
See page 96 for further information.
Variable pay outcomes
Annual Bonus payments for 2021/22
The annual bonus payments made to the Executive Directors are summarised in the table below.
Director
Maximum
bonus
(% of salary)
1
Cash
£000
Shares
£000
Bill Hocking
120%
£337
£214
Andrew Duxbury
100%
£249 £124
1 See page 95 for further information.
LTIP outcomes
Vestings relating to 2021/22 performance
The LTIP awards granted to Bill Hocking and Andrew Duxbury on 13 March 2020 were based on
underlying EPS performance over the three years to 30 June 2022. The estimated March 2023
vesting is summarised below:
Stretch
condition
(100% vesting)
Actual
performance
% Vesting
Value of award
vesting
1
Bill Hocking
16.5p 16.0p
89% 903,827
Andrew Duxbury
16.5p 16.0p
89%
734,4091 Estimated based on the average share price over the three months to 30 June 2022.
Proposed application of the Policy in 2022/2023
Element
Bill Hocking
Andrew Duxbury
Base salary
£475,000 £386,000
Pension
8%
6%
ABP
Maximum bonus opportunity of 120% of salary for the Chief Executive and
100% of salary for other executive directors.
LTIP
Award of up to 150% of salary, with three quarters based on earnings per share
and one quarter on a cash performance metric, based on average month-end
cash as a percentage of revenue.
Performance
targets
EPS: The target EPS to be achieved in the nal year of the performance period
(1 July 2024 to 30 June 2025) is 25.8p. Achieving 23.2p would generate 25%
vesting and 28.4p would generate 100% vesting on a straight-line basis.
Cash: The target is average month-end cash in the nal year of the performance
period of 9% of annual turnover. Achieving 8% would generate 25% vesting and
10% would generate 100% vesting on a straight-line basis.
Holding
period
Any vested LTIP shares must be held for two years after vesting (after payment
of tax).
Malus and
clawback
Malus and clawback apply in circumstances of error, material misstatement,
misconduct, reputational damage or corporate failure as a result of poor
risk management.
Remuneration at a glance
The following is a summary of the Executive Directors’ remuneration
in 2021/2022 and proposed application of the approved
Remuneration Policy (“Policy”).
89
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
This report sets out the Remuneration Policy that was approved by shareholders at the 2020 AGM, describing the framework within which the
Group remunerates its directors.
The main objectives of the Group’s Remuneration Policy are to:
pay and conditions across the Group.
and peer sector outperformance.
incentive structures to encourage responsible behaviour. Furthermore, recognising that even well-designed incentives cannot cater for all
eventualities, should any unforeseen issues arise that would make any payments unjustiable, the Committee can use its discretion to address
such outcomes by scaling back payments. Any use of such discretion would be fully disclosed in the Annual report on remuneration.
The clawback provisions are contained within both the ABP and LTIP, and facilitate the retrieval of payments made to Directors and
Executive management in circumstances of error, material misstatement, misconduct, reputational damage or corporate failure as a result of
poor risk management.
How the Remuneration Policy aligns with the 2018 UK Corporate Governance Code
The 2018 Code sets out principles against which the Committee should determine the Policy for Executives, as follows:
Principle
Committee approach
Clarity
Remuneration arrangements should be transparent and promote
effective engagement with shareholders and the workforce.
The Committee has continued to operate a consistent approach which
is well understood internally and by investors. Consultation with
shareholders on the revisions to the Policy was undertaken before
shareholder approval was sought at the 2020 AGM.
Simplicity
Remuneration structures should avoid complexity and their rationale
and operation should be easy to understand.
The Committee has continued to focus on ensuring that pay
arrangements are balanced, simple in their design with a small number
of relevant performance measures, and clearly linked to strategy.
Risk
Remuneration arrangements should ensure reputational and other
risks from excessive rewards, and behavioural risks that can arise
from target-based incentive plans, are identied and mitigated.
Incentive targets have been set which the Committee believes are
stretching and achievable within the risk appetite set by the Board.
Under the Policy, the Committee has discretion to override formulaic
incentive outcomes if they do not accurately or fairly reect the
underlying performance of the Group.
The incentive scheme recovery provisions include reputational
damage or corporate failure arising from poor risk management,
which ensures that malus and clawback provisions are considered
to be sufciently wide-ranging.
Predictability
The range of possible values of rewards to individual directors and
any other limits or discretions should be identied and explained at
the time of approving the policy.
The Committee has continued to maintain clear annual caps on incentive
opportunities and will use its discretion where necessary.
Proportionality
The link between individual awards, the delivery of strategy and the
long-term performance of the company should be clear. Outcomes
should not reward poor performance.
The Committee ensures performance metrics continue to be clearly
aligned with the Group’s strategy each year, maintaining an appropriate
balance between base pay, short- and long-term incentive opportunities.
The Committee has discretion to reward for exceptional individual
contributions within the limits set out in the policy. When doing so,
the Committee will have regard to governance best practice and views
expressed to the Committee previously by shareholders.
Alignment to culture
Incentive schemes should drive behaviours consistent with company
purpose, values and strategy.
Bonus and incentive schemes are reviewed by the Committee to ensure
consistency with the Group’s purpose, values and strategy.
Directors’ Remuneration Policy report
90
Galliford Try Holdings plc
The full Remuneration Policy is detailed in the table below:
Component and link to strategy
Operation
Framework to assess performance and
maximum opportunity
Salary
To provide a competitive
and appropriate level of basic
xed pay, sufcient to attract,
motivate and retain executive
directors of high calibre, able
to develop and execute the
Group’s strategy.
Normally reviewed annually, with any changes typically taking effect
from 1 April.
The Committee sets salaries at competitive rates, taking into consideration
pay and employment conditions across the Group, the economic environment,
the responsibilities and accountabilities of each role, the experience of
each individual, his or her marketability and the Group’s key dependencies
on the individual.
Reference is also made to salary levels among relevant construction peers
and other companies of broadly similar size and complexity. The Committee
reserves the right to reduce salary levels (and has done so in the past) if the
circumstances warrant it.
When reviewing salaries, both
Group and individual performance
are considered.
While there is no prescribed
maximum, the Committee’s policy
on salary increases for executive
directors is for increases to be
broadly in line with the average
across the workforce, unless there
is a promotion or material change
in role or business circumstances in
which case increases may be higher.
Salaries for the year ahead
are set out in the Annual report
on remuneration.
Benets
To provide cost-effective and
market-competitive benets.
Benets provided to executive directors may include entitlements to a
Group car or cash equivalent allowance, private medical and permanent
health insurance, and life assurance.
The benets provided may be subject to minor amendment from time
to time by the Committee. Where an Executive director is asked to relocate,
relocation (or related allowances) may be provided.
Executives may also be reimbursed for any reasonable expenses (and any
income tax payable thereon) incurred in performance of their duties.
Directors may become eligible for any new benets introduced for the
wider workforce on comparable terms.
The cost of benet provision varies
from year to year, depending on
the cost to the Group, and there
is no prescribed maximum limit.
Benet costs are monitored and
controlled to ensure that they
remain appropriate and represent
a small element of total
remuneration costs.
Pension
To provide a contribution
towards retirement.
The executive directors may each receive contributions to a money
purchase pension scheme or salary supplement in lieu of Group pension
contributions (or a combination of both).
The rate offered of 8% for the
Chief Executive and 6% (increasing
to 8% at age 50) for the Finance
Director is unchanged and in line
with that offered across the
employee population. Any new
Executive Director would also
receive a pension contribution in
line with the wider workforce.
Annual Bonus Plan (“ABP”)
Rewards the achievement of
stretching annual goals that
support the Group’s annual
and strategic objectives.
Compulsory deferral of
part of the bonus into
shares provides alignment
with shareholders.
Executive directors and selected senior management, subject to invitation
and approval by the Committee, may participate in the Annual Bonus Plan.
For executive directors, two thirds of any bonus earned in excess of 50% of
salary is required to be deferred into restricted shares. Although benecially
held by the participants, the restricted shares are legally retained by the
trustee of the Galliford Try Employee Share Trust (“EST”) for three years,
and are subject to forfeiture provisions, unless otherwise agreed by the
Committee. Subject to continued employment, the restricted shares are
legally transferred to participants on the third anniversary of allocation.
The Committee operates recovery and withholding provisions within the
Annual Bonus Plan, which facilitate the retrieval of payments made to
Directors and Executive management in circumstances of error, material
misstatement, misconduct, reputational damage or corporate failure as a
result of poor risk management.
Any bonus payment may be ‘clawed back’ within a period of three years
after the payment date should:
i. The Company discover that there was a material misstatement of the
nancial results or an error in the calculation of any performance condition,
which resulted in excess annual bonus being received by the employee.
ii. The Company become aware of any material wrongdoing on the part
of an employee that would have entitled the Company to terminate the
employment summarily.
In these scenarios, the Committee shall be entitled to recover the balance
of the overpayment from future bonus payments, unvested share awards
(if any), or if all of these possibilities have been exhausted, by cash payment
from the employee via deduction(s) from their salary or via bank transfer/
cheque from ex-employees. Both scenarios shall repay the sum on demand.
The application and extent of the clawback provision shall operate at the
sole discretion of the Committee.
The maximum opportunity is
120% of salary for the Chief
Executive and 100% of salary
for other executive directors.
No more than half of the maximum
opportunity is earned for target
performance. For nancial
elements, bonuses start to be
earned from 0% of salary for
achieving threshold performance.
Payments are dependent on
achieving specied nancial
(no less than 50% of the bonus) and
strategic or non-nancial targets.
The Committee may, at its
discretion, acting fairly and
reasonably, adjust bonus outcomes
if it considers the payout is
inconsistent with the Group’s
underlying performance during
the year, taking into account factors
including safety and ESG. For the
avoidance of doubt, this can be to
zero and bonuses may not exceed
the maximum levels detailed above.
Any use of such discretion, if to
the benet of the Executive
management, will be detailed in the
Annual report on remuneration.
91
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Directors’ Remuneration Policy report
continued
Component and link to strategy
Operation
Framework to assess performance and
maximum opportunity
Long Term Incentive Plan
(“LTIP”)
Rewards the achievement of
sustained long-term nancial
and operational performance
and is therefore aligned
with the delivery of value
to shareholders.
Facilitates share ownership
to provide further alignment
with shareholders.
Making of annual awards
aids retention.
Executive directors may be granted awards under the rules of the LTIP.
The LTIP provides for awards in the form of nil or nominal cost options
or conditional awards, which vest dependent on the achievement of
performance conditions and continued service.
Any share awards that vest (after allowing for the sale to cover any tax
liabilities) are subject to a two-year holding period during which time
they cannot be sold (unless exceptional circumstances apply).
The LTIP provides clawback and malus powers to the Committee, which
can facilitate the retrieval of payments made to Directors and Executive
management in circumstances of error, material misstatement, misconduct,
reputational damage or corporate failure as a result of poor risk management.
Dividends may accrue on LTIP awards over the vesting and holding periods
and, subject to the discretion of the Committee, be paid out either as cash
or shares on vesting, in respect of the number of shares that have vested.
Performance metrics for FY21 were
75% based on earnings per share
and 25% on a cash performance
metric based on average month-end
cash as a percentage of revenue.
The Committee may vary the
measures and targets that are
included in the plan and the
weightings between them from
year to year. Any material changes
to the choice of measures would
be subject to consultation with the
Group’s major shareholders.
The Committee may, at its
discretion, acting fairly and
reasonably, adjust LTIP vesting
outcomes if it considers the payout
is inconsistent with the Group’s
underlying performance over the
performance period, taking into
account factors including safety
and ESG. For the avoidance of
doubt, this can be to zero and
vesting may not exceed the
maximum levels detailed below.
Any use of discretion will be
detailed in the Annual report
on remuneration.
Under the LTIP rules, the maximum
value that may be granted in any
nancial year to any individual is
150% of salary.
Up to 25% of the relevant part of
the award may vest for achieving
threshold performance.
All-employee schemes
To encourage employee
share participation.
The Group may from time to time operate tax-approved share plans
(such as an approved Save As You Earn scheme for the benet of all staff)
for which executive directors could be eligible on the same terms as other
staff. A SAYE invitation was launched in March 2022 following the
announcement of the Group’s half-year results.
The schemes are subject to the
limits set by HM Revenue &
Customs (HMRC) and may
be further limited at the
Committee’s discretion.
Shareholding guidelines
To ensure the interests of
the executive directors
are aligned to those of
shareholders.
The Group’s share retention policy requires executive directors to build and
maintain a shareholding equivalent in value to at least 200% of basic salary.
Executive directors are required to retain a minimum of half the after tax
number of vested share awards (deferred bonus and LTIP) until the guideline
is met.
On leaving the Group, executive directors are required to retain the lesser
of their in-post shareholding guideline and their actual shareholding on
departure for two years. This requirement applies to share awards granted
to executive directors following the approval of the Policy at the 2020 AGM.
The Committee will assess the guideline annually and take into account
vesting levels and personal circumstances when assessing progress against
the guideline.
Not applicable.
Non-executive fees
To provide a competitive
and appropriate level of fees
sufcient to attract, motivate
and retain a Chairman and
non-executive directors
of high calibre.
The Chairman is paid a single xed fee. The remaining non-executive directors
are paid a basic fee. Non-executives chairing a Board Committee and the
Senior Independent Director are paid an additional fee to reect their
extra responsibilities.
The level of these fees is reviewed periodically by the Committee and
Chief Executive for the Chairman, and by the Chairman and executive
directors for the non-executive directors.
Fees are set taking into consideration market levels in comparably sized
FTSE companies and relevant sector peers, the time commitment and
responsibilities of the role and the experience and expertise required.
Non-executive directors, including the Chairman, are entitled to
reimbursement of business expenses reasonably incurred in performing
their duties (and any personal tax that may become payable).
Non-executive directors cannot participate in any of the Group’s annual bonus
or share plans and are not eligible for any pension entitlements from
the Group. The Chairman is eligible to participate in the Group’s medical
assurance plan.
The Committee and the executive
directors are guided by the general
pay increase for the broader
employee population, but on
occasions may need to recognise,
for example, changes in
responsibility or time commitments.
Current fee levels are disclosed
on page 99.
92
Galliford Try Holdings plc
Notes to the policy table
Performance measure selection and
approach to target setting
Measures used under the ABP and LTIP
are reviewed annually to reect the Group’s
main short- and long-term objectives and
reect both nancial and non-nancial
priorities, as appropriate.
Targets applying to the ABP and LTIP are
also reviewed annually, based on a number
of internal and external reference points.
Performance targets are set to be stretching
but achievable, with regard to the particular
strategic priorities and economic environment
in a given year.
Discretions retained by the Committee
in operating incentive plans
The Committee may make minor amendments
to the Policy for regulatory, exchange control,
tax or administrative purposes or to take
account of a change in legislation, without
obtaining shareholder approval.
The Committee will operate the ABP and
LTIP according to their respective rules, the
Policy set out above and in accordance with
the Listing Rules and HMRC rules where
relevant. The Committee, consistent with
market practice, retains discretion over a
number of areas relating to the operation and
administration of these plans, subject to any
limitations set out in the rules of the applicable
plan or, in the case of executive directors,
in the Policy set out above. These include
(but are not limited to) the following:
a payment.
performance measures, weightings and
targets for each incentive plan, in accordance
with the Policy set out above and the rules
of each plan.
of performance in the event of a change of
control or reconstruction.
to any specied categories) for incentive
plan purposes, based on the rules of each
plan and the appropriate treatment under
the plan rules.
circumstances (e.g. rights issues, corporate
restructuring, on a change of control and
special dividends).
Any use of the above discretions would,
where relevant, be explained in the
Annual report on remuneration and may,
as appropriate, be the subject of consultation
with the Group’s major shareholders.
Executive Director
remuneration scenarios
The individualised potential Executive
reward charts have been prepared using
the following assumptions:
salary, benets and pensions payments
have been included.
and 50% of the LTIP (face value) awards have been included.
ABP and full vesting of the LTIP (face value) awards have been included.
in the value of the LTIP (face value) awards have been included.
Salary levels are based on those applying on 1 April 2022 and the value of taxable benets
is estimated based on the cost of supplying those benets (as disclosed) for the year ended
30 June 2022. Executive directors can participate in all employee share schemes on the same
basis as other employees but, for simplicity, the value that may be received from participating in
these schemes has been excluded.
Max +
50% share price
MaximumTargetMinimum
Max +
50% share price
MaximumTargetMinimum
Fixed pay Annual bonus Long-term incentives
£514
100%
Illustration of application of Remuneration Policy
Remuneration (£000s)
£1,155
Bill Hocking
31%
£1,797
£2,153
40%
50%
26%
24%
32%
29%
25%
44%
£414
100%
£897
Andrew Duxbury
£1,379
£1,669
28%
42%
52%
23%
25%30%
22%
32%
46%
Policy on recruitment
In cases where the Group recruits a new Executive Director, the Committee will align the new
Executive’s remuneration with the approved Remuneration Policy. In arriving at a value for
individual remuneration, the Committee will take into account the skills and experience of the
candidate, the market rate for a candidate of that experience and the importance of securing
the preferred candidate.
The Committee also has the discretion to meet certain other incidental expenses (for example,
relocation costs and travel and subsistence payments) to secure recruitment of preferred
candidates. Further details of the Recruitment Policy are set out in the table below.
Element
General policy
Specics
Salary
At a level required to
attract the most
appropriate candidate.
Discretion to pay lower base salary with incremental
increases (potentially above the average increase across
the Group), as the new appointee becomes established in
the role.
Pension
and
benets
In line with the policy
for existing executive
directors.
In line with the Policy, pension contribution rates are aligned
with those offered across our employee population.
Relocation expenses or allowance, legal fees and other
costs relating to recruitment may be paid as appropriate.
ABP
In line with
existing schemes.
Where a director is appointed part way through a
nancial year, different performance measures could be
introduced to reect the change in role and responsibilities.
The annual bonus limit remains at 120% of base salary
for a Chief Executive and 100% for other directors.
Pro-rating applies as appropriate for intra-year joiners.
Where an individual is appointed to the Board, different
performance measures to those for continuing directors
may be set for the period of time remaining in that
performance year.
LTIP
In line with Group
policies and LTIP rules.
An award of up to 150% of salary may be made in
accordance with the Remuneration Policy table. An award
may be made in the year of joining or can be delayed until
the following year. Targets would normally be the same as
for awards to other directors.
Other
share
awards
The Committee may
make an incentive
award to replace
deferred pay forfeited
by an Executive leaving
a previous employer.
Awards would, where possible, be consistent with the
awards forfeited in terms of structure, value, vesting
periods and performance conditions.
93
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
The Committee reserves the right to award
additional remuneration in excess of the
Remuneration Policy at appointment,
exclusively to replace lost rewards or benets.
In determining the appropriate form and
amount of any such award, the Committee will
consider various factors, including the type and
quantum of award, the length of performance
period, and the performance and vesting
conditions attached to each forfeited incentive
award. The maximum payment (which may be
in addition to the normal variable remuneration)
should be no more than the Committee
considers is required to provide reasonable
compensation to the incoming director. The
Committee may make use of the exibility
provided in both the Listing Rules and the
approved Remuneration Policy, to make awards
outside the existing parameters of the LTIP.
For internal promotions to Executive Director
positions, the Committee’s policy is for legacy
awards or incentives to be capable of vesting
on their original terms (which may involve
participation in schemes that operate
exclusively for below Board employees) or,
at the discretion of the Committee, they
may be amended to bring them into line
with the policy for executive directors.
For a new Non-executive Chairman or
Non-executive Director, the fee arrangement
would be set in accordance with the approved
Remuneration Policy.
Directors’ service contracts and
policy for payments to departing
executive directors
The service contracts and letters of
appointment for the Board directors serving
as at 30 June 2022 are detailed below:
Contract date
1
Notice
period
2,3
(months)
Non-executive directors
Peter Ventress
3 January 2020
6
Terry Miller
3 January 2020
6
Gavin Slark
3 January 2020
6
Marisa Cassoni
3 January 2020
6
Alison Wood
1 April 2022
6
Sally Boyle
1 May 2022
6
Executive directors
Bill Hocking
3 January 2020
12
Andrew Duxbury
3 January 2020
12
1 Date shown is the director’s contract as an
Executive or non-executive director of the Group.
Executive directors have a rolling notice period as
stated. Non-executive appointments are reviewed
after three years and their appointments are subject
to a rolling notice period as stated. All Directors will
stand for election or re-election at the 2022 AGM.
2 There are no contractual provisions requiring
payments to directors on loss of ofce or
termination, other than payment of notice
periods. The Committee may seek to mitigate
such payments where appropriate.
3 Subject to the Nomination Committee’s
recommendation, the Group’s practice is to agree
notice periods of no more than six months for
non-executive directors and no more than
12 months for executive directors.
Executive directors’ service contracts are
available at the Group’s registered ofce
and will be available for inspection at the
2022 AGM.
For executive directors, at the Group’s
discretion, a sum equivalent to 12 months’
salary and benets may be paid in lieu of
notice. The contracts include mitigation
provisions to pay any such lump sum in monthly
instalments, subject to offset against earnings
elsewhere. This will also be the case for
any future appointments.
An Executive director’s service contract may
be terminated summarily without notice and
without any further payment or compensation,
except for sums accrued up to the date of
termination, if they are deemed to be guilty
of gross misconduct or for any other material
breach of the obligations under their
employment contract.
The Group may suspend executive directors or
put them on a period of gardening leave during
which they will be entitled to salary, benets
and pension.
For ‘good leavers’, bonuses may be payable
pro rata for the proportion of the nancial
year worked, at the Committee’s discretion.
Depending on the circumstances, the
Committee may consider additional payments
in respect of an unfair dismissal award,
outplacement support and assistance with
legal fees.
Any share-based entitlements granted to an
executive director under the Group’s share
plans will be determined based on the relevant
plan rules. The default treatment is that any
outstanding awards lapse on cessation of
employment. However, ‘good leaver’ status
can be applied at the Committee’s discretion,
taking into account the individual’s performance
and the reasons for their departure.
For ‘good leavers’, LTIP awards may vest at the
normal time (other than by exception) to the
extent that the performance conditions have
been satised. The level of vested awards will
be reduced pro rata, based on the period of time
after the grant date and ending on the date
employment ceased relative to the three-year
performance period, unless the Committee,
acting fairly and reasonably, decides that such a
scaling back is inappropriate in any particular
case. Deferred bonus shares of ‘good leavers’
vest on cessation of employment.
The overriding principle will be to honour
contractual remuneration entitlements and
determine on an equitable basis the appropriate
treatment of deferred and performance-related
elements of remuneration, taking into account
the circumstances. Failure will not be rewarded.
External directorships
Any additional external appointments can
only be undertaken with the Board’s written
approval and if time and commitments allow.
Executive directors require the Board’s
approval to accept external appointments
as non-executive directors and retain any
associated fees.
Shareholder consultation
Where appropriate, the Committee will consult
relevant institutional shareholders in advance
of substantial changes to the Policy or individual
executive director remuneration packages.
Relevant institutional shareholders were
consulted ahead of the introduction of the
current Remuneration Policy, which was
approved at the 2020 AGM.
Wider workforce remuneration and
how the views of employees have
been taken into account
When setting pay for the executive directors,
the Committee considers remuneration
structures elsewhere in the Group, including
the overall salary increase budget and incentive
structures. The Committee also takes into
account available market sector data obtained
through benchmarking, as well as Government
policies and advice from the Executive
management team.
The total package on offer remains competitive
at all levels of the Group. The comprehensive
range of benets include exible working
arrangements, a minimum of 28 days holiday
and the opportunity to purchase further days,
as well as a pension plan, a regular SAYE scheme
and health insurance plan.
The Board does not consult employees on
Executive remuneration but does ensure it
understands employee views on matters
including rewards and benets, which are
an agenda item for the Employee Forum.
The Forum is chaired by Terry Miller, Senior
Independent Director and Remuneration
Committee Chair, and it also discusses business
updates and feedback from Employee
Representatives on key topics such as people
and engagement initiatives, communication
and wellbeing, as well as reward and benets.
The Employee Forum ensures employees have
a voice in the Boardroom, strengthens internal
communications, enables employees to offer
ideas, champions change and supports good
governance. It can also act as a representative
body for communicating with employees and
obtaining feedback about matters that may
affect their employment.
Directors’ Remuneration Policy report
continued
94
Galliford Try Holdings plc
Annual Report on Remuneration
This part of the Directors’ Remuneration report sets out how the Policy was implemented over the year ended 30 June 2022. It will be put
to an advisory vote at the 2022 AGM. Certain sections of the Annual report on remuneration have been subject to audit.
The Directors’ Remuneration report has been prepared in accordance with The Companies (Directors’ Remuneration Policy and Directors’
Remuneration Report) Regulations 2019 (applying to nancial years starting on or after 10 June 2019), the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations (Amended) 2013 and the Financial Conduct Authority’s Listing Rules. The auditor is required to report
on the remuneration data disclosed in the Directors’ Remuneration report section and state whether, in its opinion, that part of the report has been
properly prepared in accordance with relevant provisions of the Companies Act 2006 (as amended).
Directors’ remuneration and single-gure annual remuneration (audited)
The remuneration of the directors serving during the nancial year, together with 2021 comparative gures, was as follows:
Salary and
fees
£000
Taxable
benets
1
£000
Pensions
2
£000
Total xed
remuneration
£000
Annual
bonus
£000
LTIP
£000
Sharesave
£000
Total variable
remuneration
£000
Total
remuneration
£000
2022
3
2021
2022
20212022
20212022
20212022
20212022
20212022
20212022
20212022
2021Executive directors
Bill Hocking
463
450
2
1
37
36
502
487
551
540
904
–
–
–1,455
540
1,957
1,027
Andrew Duxbury
376
367
2
5
23
22
401
394
373
366
734
–
–
–1,107
366
1,508
760
Non-executive directors
Terry Miller
67
63
–
63–
––
67
–
63–
––
––
––
67
Gavin Slark
45
44
–
–
––
45
44
–
–
––
––
––
45
44
Peter Ventress
206
202
1
1
––
207
203
–
–
––
––
––
207
203
Marisa Cassoni
54
52
–
52–
––
54
–
52–
––
––
––
54
Alison Wood
12
–
–
––
–12
––
––
––
––
–12
–Sally Boyle
8
–
––
––
8–
––
––
––
––
8–
Former directors
Jeremy Townsend
–
13
–
13–
––
––
13–
––
––
––
–1 Includes the value of benets such as car allowance and medical insurance.
2 This is a salary supplement paid to the directors in lieu of direct pension contributions.
3 In line with average salary increase of 4.4% across the workforce, salaries for non-executive directors (excluding the Chairman) increased by 4.5% with effect from
1 April 2022. Bill Hocking and Andrew Duxbury received a salary increase of 3.5% with effect from 1 April 2022.
2022 Annual bonus outcome (audited)
For the nancial year ended 30 June 2022, the annual bonus measures, targets, weightings and performance are set out in the table below.
Senior management was subject to similar targets, which were applied to their respective business performance.
Measure
Performance target
Weighting
Threshold
(% of maximum
bonus)
On-target
(% of maximum
bonus)
Maximum
(% of maximum
bonus)
Actual
performance
Payout
% of bonus
maximum
Pre-exceptional full year Group prot before tax
47. 5%
£15.2m (0%)
£16.0m
(23.75%)
£18.4m
(47. 5%)
£19.1m
47. 5%
Pre-exceptional half year Group prot before tax
15.0%
£4.5m (0%)
£5.0m (7.5%)
£5.75m (15%)
£7.1m
15%
Group cash management
25.0%
95% of
budget (12.5%)
100% of
budget (12.5%)
110% of
budget (25%)
25.0%
25%
Construction order book
12.5%
83.0% secured (0%)
85.0% secured
(6.25%)
87.0% secured
(12.5%)
90%
secured
12.5%
Total payout (% of maximum bonus)
100.0% 100% 100%
12.5%
100.0%50.0%
The Group achieved a strong performance against targets set at the start of the nancial year. Taking into account the Group’s protability and
enhanced dividends to shareholders, the Committee determined that the bonus level produced by the scorecard of 100% is an appropriate reward
given the Group’s operational and nancial performance. This treatment is consistent with that applied for all participants of the ABP. Under the
approved Policy, the Committee may, at its discretion, acting fairly and reasonably, adjust bonus outcomes if it considers the payout is inconsistent
with the Group’s performance during the year, taking into account factors including safety and ESG. In considering bonus awards the Committee took
the Group’s health and safety performance and ESG initiatives into consideration. The Group achieved an overall Accident Frequency Rate (“AFR”)
of 0.06 for 2021/22, with eight business units achieving an AFR of zero during the year (AFR for 2020/21: 0.08).
The Committee determined that, in respect of the year to 30 June 2022, the resulting annual bonus awards were as follows:
On-target bonus
(% of salary)
Maximum bonus
(% of salary)
Actual bonus
payable for
2021/22
(£000)
Cash
(£000)
Shares
(£000)
Bill Hocking
60%
120%
551
337
214
Andrew Duxbury
50%
100%
373
249 124
Two-thirds of the bonus earned in excess of the 50% of salary threshold is required to be deferred into restricted shares. Although benecially held
by the participants, the allocated restricted shares are legally retained by the Employee Share Trust and are subject to forfeiture provisions, unless
otherwise agreed by the Committee. Subject to continued employment, the restricted shares are legally transferred to participants on the third
anniversary of allocation. Recovery provisions apply at any time within the three-year period post-vesting or payment of cash bonuses in circumstances
or error, material misstatement, misconduct, reputational damage or corporate failure as a result of poor risk management.
95
Annual Report and Financial Statements 2022
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Governance
Strategic report
LTIP awards vesting in March 2023 (audited)
The LTIP awards granted to Bill Hocking and Andrew Duxbury on 13 March 2020 were based on underlying EPS performance over the three years to
30 June 2022. In total, 89% of the maximum award will vest as a result of the performance achieved. The Committee was satised that this outcome
reected the true performance of the Group and no discretion was applied. The awards will be subject to a two-year post vesting holding period in
accordance with the existing Remuneration Policy. More details on each of the performance conditions are set out below.
Threshold
condition
(25% vesting)
Stretch condition
(100% vesting)
Actual
performance
% of award
vesting
Value of award
vesting
1
Element of value
attributable to
share growth
1
Bill Hocking
13.0p
16.5p 16.0p
89% 903,827 303,827
Andrew Duxbury
13.0p
16.5p 16.0p
89%
734,409246,267
1 Estimated based on the average share price over the three months to 30 June 2022. Actual value at vesting will be shown in the 2023 Remuneration Report.
Directors’ share plan interests (audited)
Outstanding awards held by Bill Hocking and Andrew Duxbury are detailed in the table below.
Director
Plan
Grant Date
Share price
at grant
Number of
awards
outstanding
at 1 July
2021
Granted
Vested
Lapsed
Number of
awards
outstanding
at 30 June
2022
Value of
awards
vested
during
nancial
year
£000
Actual or
anticipated
vesting date
Bill Hocking
LTIP
1
13.03.20
£1.1554
13.03.23584,213
– – –
584,213–
LTIP
23.09.20
£0.80
843,750
– – –
843,750–
23.09.23
LTIP
23.09.21
£1.788
23.09.24– –
385,067
–385,067
–ABP
3
23.09.21
£1.7694
23.09.24– –
118,684
–118,684
–Andrew
Duxbury
LTIP
1
13.03.20
£1.1554
13.03.23474,705
– – –
474,705–
ABP
2
23.09.20
£0.8442
52,969
– – –
52,969–
23.09.23
LTIP
23.09.20
£0.80
685,593
– – –
685,593–
23.09.23
LTIP
23.09.21
£1.788
23.09.24– –
312,919
–312,919
–ABP
3
23.09.21
£1.7694
23.09.24– –
69,015
–69,015
–1 Awards are based on a maximum percentage of salary. The number of shares shown in the table represents the maximum number of shares, ie 150% of salary.
2 In accordance with the rules of the Annual Bonus Plan, the average of the Company’s closing share price for the ve business days following (and including)
the announcement of the annual results on 16 September 2020 was 84.42 pence.
3 In accordance with the rules of the Annual Bonus Plan, the average of the Company’s closing share price for the ve business days following (and including)
the announcement of the annual results on 16 September 2021 was 176.94 pence.
Awards granted during the year (audited)
On 23 September 2021, the following conditional LTIP awards were made to Bill Hocking and Andrew Duxbury.
Director
Date of grant
Number of
shares awarded
Basis of award
Share price used to
determine level of award
1
£
Face value
£
Bill Hocking
23 September 2021
385,067
150% of base salary
£1.788
688,500
Andrew Duxbury
23 September 2021
312,919
150% of base salary
£1.788
559,500
The performance conditions attached to these awards made in September 2021 are as follows:
Date of grant
Performance conditions
September 2021
Vesting of up to 75% of the award is based on underlying EPS. 25% of the element will vest for 15.9p, increasing to 100% vesting
on a straight-line basis if 19.5p underlying EPS is achieved during the nal year of the three-year performance period (1 July 2023
to 30 June 2024).
Vesting of up to 25% of the award is based on average month-end cash as a percentage of annual turnover in the year ending
30 June 2024.
8% would generate 25% of the element vesting and 10% would generate 100% vesting on a straight-line basis.
Any shares which vest will be subject to a two-year post-vesting holding period, in accordance with the Remuneration Policy.
Malus and clawback apply at any time within a three-year period post-vesting, in the case of material misstatement, misconduct,
reputational damage or corporate failure as a result of poor risk management.
Directors’ Remuneration Policy report
continued
96
Galliford Try Holdings plc
Directors’ share interests (audited)
As at 30 June 2022, the Directors held the following benecial, legal and unvested ABP interests in the Group’s ordinary share capital.
Measure
Legally owned
1
LTIP (unvested)
Deferred bonus
awards
(unvested)
Total
% of salary held
under share
ownership
guidelines
2
30.6.22
30.6.21
30.6.22Executive directors
Bill Hocking
119,778 119,778
1,813,030
118,684
2,051,492
88%
Andrew Duxbury
24,955 24,955 1,473,217 121,984
1,620,156
66%
Non-executive directors
Terry Miller
2,066 2,066
– –
2,066n/a
Gavin Slark
1,600 1,600
– –
1,600
n/a
Marisa Cassoni
– – – – –
n/a
Peter Ventress
14,098 14,098
– –
14,098n/a
Alison Wood
– – – – –
n/a
Sally Boyle
– – – – –
n/a
1 Either held by the individual or connected persons.
2 Under the current Remuneration Policy, the share ownership guideline for executive directors is 200% of base salary. Bill Hocking and Andrew Duxbury were appointed as
Chief Executive and Finance Director on 3 January 2020 and 26 March 2019, respectively, and are still building up to the guideline level.
There were no changes in the directors’ interests from 30 June 2022 to the date of this Annual Report.
Performance graph
The graph shows the total shareholder return (“TSR”) for Galliford Try shares over the past 10 nancial years. It shows the value to 30 June 2022 of
£100 invested in Galliford Try on 30 June 2012, assuming dividends are reinvested in the Company’s shares, compared with the value of £100 invested
in the FTSE All-Share Index, this being a broad-market index of which the Company has been a constituent over the full period shown.
The closing mid-market quotation for the Company’s shares on 30 June 2022 was £1.70. The high and low during the year were £2.06 and £1.38.
The total gross remuneration of the Chief Executive and the percentage achieved of the maximum ABP and LTIP awards are shown in the table below
for the past 10 nancial years.
2013
2014
2015
1
2016
2017
2018
2019
2
2020
3
2021
2022
Chairman
Chief
Executive
Total remuneration (£000)
4,114
3,212
2,8111,262
1,461
1,043
1,448
824
660
1,027
1,957
Annual bonus (% of maximum)
94%
97%
79%
74% 74%
46.3%
86.5%
57.0%
36.7%
100.0%
100%
LTIP (% of maximum)
87%
63% 63%
47%
– –
16.5%
–36.6%
16.5%89%
1 Peter Truscott was appointed Chief Executive on 1 October 2015. His predecessor, Greg Fitzgerald, was Chief Executive until 21 October 2014, and Executive Chairman
until 31 December 2015. Peter Truscott stepped down as Chief Executive and from the Board on 26 March 2019.
2 Graham Prothero was appointed Chief Executive on 26 March 2019, succeeding Peter Truscott. He stepped down from the Board and as Chief Executive following
the successful completion of the sale of the housebuilding divisions to Vistry Group plc on 3 January 2020.
3 Bill Hocking was appointed Chief Executive on 3 January 2020. A full-year remuneration gure based on the aggregate paid to Bill and Graham is shown here to
aid comparison.
Source: Datastream from Refinitiv
Total Shareholder Return
Value (£) (rebased)
0
100
200
300
500
400
Galliford Try FTSE All Share
Jun
21
Jun
22
Jun
20
Jun
19
Jun
18
Jun
17
Jun
16
Jun
15
Jun
14
Jun
13
Jun
12
97
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
CEO pay ratios
Under Option B (gender pay data), three employees have been identied as the best equivalents to represent the lower, median and upper quartiles.
Option B provides a clear methodology involving fewer adjustments to calculate full-time equivalent earnings.
Year
Method
CEO single gure
All UK
employees
Lower quartile
Median
Upper quartile2019/20
Option B
£660,587
Ratio
24:1 15:1 9:1
Total pay
£ 27,407
£43,165
£74,351
Salary
£25,500
£35,249
£61,057
2020/21
Option B
£1,026,671
Ratio
27:1 19:1 14:1
Total pay
£37,399
£54,374
£73,385
Salary
£36,134
£43,781£66,927
2021/22
Option B
£1,956,702
Ratio
63:1 36:1 26:1
Total pay
£31,128
£53,976
£73,920
Salary
£27, 875
£44,720
£62,275
Unlike last year, the CEO gure includes earnings from the Long-Term Incentive Plan (last year, there were no long-term incentives due to vest).
Long-term incentives are operated for the most senior Group employees only, namely, those responsible for strategy development and execution.
The payouts from such plans are expected to be volatile from cycle to cycle.
Compared to 2020/21, there were increases in all three ratios, reecting the fact that a greater proportion of the Chief Executive’s total reward is
linked to annual performance through a higher annual bonus opportunity than that of the average employee. The Committee is comfortable that the
resulting calculations are representative of pay levels at the respective quartiles and that the applicable relativities are appropriate given the prole of
the workforce.
Percentage change in remuneration of executive directors and non-executive directors
The table below shows the percentage change in salary or fee, taxable benets and annual bonus of each individual director in respect of the nancial
years ended 30 June 2021 and 30 June 2022:
Year ended 30 June
2022
2021
Salary change
1
Benets change
2
Bonus change
Salary change
4
Benets change
Bonus change
4
Executive directors
Bill Hocking
2.9%
203.3%
2.0%
119.5%
(85.5)%
449.8%Andrew Duxbury
2.6%
(70.0)%
1.9 %
4.9% (70.9)%
46.5%
Non-executive directors
Peter Ventress
1.9%
n/a n/a
5.0%
n/a n/a
Terry Miller
7.5%
n/a n/a
15.3%
n/a n/a
Gavin Slark
3.0%
n/a n/a
5.0%
n/a n/a
Marisa Cassoni
3.0%
n/a n/a
(1.1)%
n/a n/a
Alison Wood
3
n/a n/a n/a
n/a n/a n/a
Sally Boyle
3
n/a n/a n/a
n/a n/a n/a
Former directors
Jeremy Townsend
– – –
(73.9)%
– –
P50 median employee
2.1%
(11.1)%
40.0%
24.2%
4.5%
50.0%
1 Salaries for the executive directors were increased by 3.5% with effect from 1 April 2022. Fees for the non-executive directors (excluding the Chairman) were increased by
4.5% with effect from 1 April 2022. Fees for the Chairman remained unchanged.
2 Benets received include pension contributions (or cash equivalent), company car (or equivalent cash allowance), and private medical insurance. Executive directors and
senior management, subject to invitation and approval by the Committee, may participate in the ABP and LTIP.
3 The percentage change is not shown for Alison Wood or Sally Boyle as they were appointed to the Board on 1 April 2022 and 1 May 2022 respectively and there is no prior
year remuneration to compare against.
4 Please see page 83 in our 2021 Annual Report for further information.
To allow for comparison, the Committee has elected to compare the total remuneration of the P50 median employee (median) from this year (2021/22)
to that used last year. The Committee continues to ensure that the wider total package on offer to employees remains competitive at all levels.
Relative importance of spend on pay
2020/21
2021/22
Change
Total overall spend on pay (£m)
165.3
213.0
47.7
Dividends (£m)
5.2
6.3
21.2%
Share buyback (£m)
–
–
–
Group corporation tax (charge) (£m)
1
(1.0)
(1.7)
£(0.7)m
Effective tax rate (%)
8.8
8.9
0.1 ppts
1 Pre-exceptional total tax.
The equivalent total overall spend on pay in 2021/22 is disclosed in note 5 to the nancial statements. The total overall spend on pay equates to average
remuneration per staff member of £65,500 per annum as at 30 June 2022 (2021: £62,100).
Directors’ Remuneration Policy report
continued
98
Galliford Try Holdings plc
Composition of the Remuneration
Committee and attendance
In addition to the Chair, Terry Miller, the other
Committee members were Marisa Cassoni, Gavin
Slark, Peter Ventress, Alison Wood (from 1 April
2022) and Sally Boyle (from 1 May 2022). The
General Counsel & Company Secretary acts as
Secretary to the Committee. The Chief Executive
has a standing invitation to attend all Committee
meetings, although each meeting commences
with the non-executive directors meeting
without Executive management present.
The HR Director attends certain meetings at the
invitation of the Committee. No director nor
the General Counsel & Company Secretary is
present when his or her own remuneration is
being considered. Attendance at Committee
meetings is shown in the table on page 73.
The Committee is governed by formal terms
of reference agreed by the Board and is
composed solely of non-executive directors.
The terms of reference were reviewed during
the year and are available on the Group’s
website (www.gallifordtry.co.uk).
Remuneration advice and advisers
The Committee is informed of key developments
and best practice in the eld of remuneration
and obtains advice from independent external
consultants, when required. Mercer Limited
(“Mercer”) was the Committee’s remuneration
consultant throughout the year. Fees paid to
Mercer during the nancial year were £16,250
(2021: £26,250).
Mercer does not provide any other services to
the Group, although Mercer is part of Marsh &
McLennan Companies, a subsidiary of which
Marsh JLT Specialty Limited, provides insurance
broking services to the Group. The Committee
is satised that these services do not impinge on
Mercer’s independence. Furthermore, Mercer
is a signatory to the Remuneration Consultants’
Code of Conduct, which requires that its advice
be objective and impartial.
The General Counsel & Company Secretary
also advises the Committee as necessary and,
where appropriate, makes arrangements for
the Committee to receive independent legal
advice at the request of the Chair.
Employee Share Trust and dilution
The Employee Share Trust (“EST”) is the primary
mechanism by which shares required to satisfy
the Executive incentive plans are provided.
Following the announcement of the 2021
full-year results in September 2021, the EST
entered into a six-month trading plan with the
Company from September 2021 to March
2022. The EST instructed Peel Hunt LLP to
acquire ordinary shares of 50 pence each in the
Company for the Trust. Purchases were made
at the best price and limited to 260,000 shares
in any single calendar month. The shares are to
be used to satisfy potential future vesting(s)
to be made to employees under the various
Executive share incentive schemes.
As at 30 June 2022, the EST held 3,541,603
ordinary shares in the capital of the Company
(3.19%) (2021: 1,721,603 shares). Under the
terms of the Trust Deed, the Trust may only
hold up to a maximum of 5% of the issued
shares in the Company.
During the nancial year, 739 new shares
were issued arising from share scheme-related
activities under the SAYE share option scheme.
As at 30 June 2022, the total number of shares
outstanding under the SAYE share option
scheme was 2,789,523. The Group has complied
with the dilution guidelines of the Investment
Association (“Guidelines”).
Applying the Guidelines, the Group has 7.49%
headroom against the 10% in 10 years’ rule and,
on the basis that the Group’s practice is that all
awards granted pursuant to discretionary plans
are satised using shares purchased in the
market, 5% headroom against the ‘5% in
10 years’ rule for discretionary plans.
Shareholder voting on the
Directors’ Remuneration Report
The Committee takes account of annual
shareholder voting trends in connection with
the Directors’ Remuneration report. Votes cast
in support of the annual advisory resolution to
approve the Directors’ Remuneration report
during the past ve AGMs are included in the
chart below.
20212020201920182017
Votes For Votes Against
2.15 13.97 14.27 35.57 0.11
97.85 86.03 85.73 64.43 99.89
Votes cast
(%)
AGM Year
The Board will continue to engage with
shareholders to ensure their views are fully
understood and considered and can be taken
into account by the Committee in the future.
The Committee and Board are grateful to
shareholders for the strong support provided.
The current Policy was approved by 99.89% of
shareholders who voted at the 2020 AGM.
Forward-looking implementation
of Policy
Base salaries
The 2022/23 salary review was completed in
April 2022. The Committee carefully scrutinised
pay and conditions across the Group. Taking
into account market conditions, peer group
comparisons and the Group’s overall
performance, the overall pay budget increased
by 4.5%. With effect from 1 April 2022, Bill
Hocking’s annual salary increased from
£459,000 to £475,000, an increase of 3.5%.
With effect from 1 April 2022, Andrew Duxbury
was also awarded an annual salary increase of
3.5%, taking his annual salary from £373,000 to
£386,000. These increases were below the
average pay increase across the workforce.
ABP
For the nancial year to 30 June 2023, the
Committee has determined that the existing
bonus structure remains appropriately aligned
to corporate strategy. It will therefore remain in
its current form, with an opportunity of 120%
of salary for the Chief Executive, and 100% for
other executive directors.
Bonus outcomes will be subject to overall
Committee discretion, taking into account
factors including health and safety and the
underlying performance of the Group. The
Committee intends to introduce ESG annual
bonus measures in 2022/23 aligned to the
Group’s strategy on ESG, with an ESG target in
total of 12%. The ESG measures will comprise
order book, employees, carbon, community and
supply chain.
LTIP
Any award granted to the executive directors
in 2022 will be within the current approved
Remuneration Policy and based on
performance metrics, with 75% based on
earnings per share and 25% on average
month-end cash as a percentage of revenue.
Performance measures applied over a three-year
performance period to 30 June 2025 are:
EPS is 13.0p, increasing to 100% vesting on a
straight-line basis if 16.5p is achieved.
month-end cash is 8% of revenue, increasing
to 100% vesting on a straight-line basis if
10% is achieved.
Awards will vest on a straight-line basis between
the above threshold and maximum vesting levels.
Chairman and Non-executive fees
The Committee determined that the Chairman’s
fee for 2022 would be unchanged. In addition,
and following a review of the NEDs’ fees by
the Board, it was agreed that the NEDs’ fees
would increase by 4.5% from 1 April 2022.
Accordingly, the annual fees effective from
1 April 2022 are as follows:
2022
2021
Increase
%
Chairman
1,2
£206,128
£206,128
0%
Non-
executive
directors
Base fee
£46,701
£44,690
4.5%
Additional
fees:
Senior
Independent
Director
£4,660
£4,459
4.5%
Chairs of
Board
Committees
£8,783
£8,4054.5%
Chair of
Employee
Forum and
Stakeholder
Steering
Committee
£8,783
£8,4054.5%
1 Peter Ventress received no benets in connection
with his position as Chairman, other than
membership of the Group’s medical insurance plan.
2 Alison Wood will become the new Chair on
21 September 2022 after Peter Ventress has
stepped down. At that point the Chair’s basic fee
will be £175,000.
For and on behalf of the Board
Terry Miller
Remuneration Committee Chair
21 September 2022
99
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Directors’ report
Principal activities
Galliford Try is a trading name of Galliford
Try Holdings plc, a leading UK construction
group which has a premium listing and whose
shares are traded on the Main Market of the
London Stock Exchange. The Group operates
Holdings plc, registered in England and Wales
with company number 12216008, is the Parent
Company of the Group.
More detailed information regarding the
Group’s activities is provided on pages 2 to 64.
The Group’s principal subsidiaries and
joint ventures are shown in note 33 to the
nancial statements.
Strategic report
The Strategic report can be found on pages 1
to 65. It contains an indication of the directors’
view on likely future developments in the
Group’s business. In addition, and in accordance
with the Companies, Partnerships and Groups
(Accounts and Non-Financial Reporting)
Regulations 2016, the Strategic report
contains information on employees, social and
environmental matters, human rights and
anti-corruption and anti-bribery matters,
as well as a description of the Group’s policies
and where these are located.
In accordance with section 414CZA of the
Companies Act 2006, the Strategic report
contains a section 172 (1) statement describing
how directors have had regard to the matters
set out in section 172 (1) (a) to (f) of the
Companies Act 2006 when performing their
duty under section 172. Please refer to pages
62 to 63.
The Annual Report and nancial statements
use nancial and non-nancial key performance
indicators wherever possible and appropriate.
Corporate governance report
The Corporate governance report on pages 76
to 78 is the corporate governance statement
for the purposes of Disclosure Guidance and
Transparency Rule 7.2.1.
Results, dividends and capital
The pre-exceptional prot for the year
before income tax was £19.1m, as shown in
the consolidated income statement on page
110. On 3 March 2022, the Board declared
an interim dividend of 2.2p per share, which
was paid to shareholders on 8 April 2022.
The Board has proposed a nal dividend of
5.8p per share. Subject to approval by
shareholders, this will be paid on 9 December
2022 to shareholders on the register at
11 November 2022, resulting in a total dividend
in 2022 of 8.0p per share. Dividend cover is
expected to be 2.0 times earnings.
On 21 September 2022, we announced an
initial share buyback programme to repurchase
up to £15m of ordinary shares.
Please refer to page 56 for an overview of
the Group’s capital structure and funding.
Share capital, authorities
and restrictions
The Company has one class of ordinary
share capital, with a nominal value of 50p.
The ordinary shares rank pari passu in respect
of voting and participation and are traded on
the Main Market of the London Stock Exchange.
At 30 June 2022, the Company had
111,054,228 ordinary shares in issue.
Votes may be exercised at general meetings of
the Company by members in person, by proxy
or by corporate representatives (in relation to
corporate members). The Company’s Articles
of Association (the “Articles”) set a deadline
for submitting proxy forms (electronically or
by paper) of not less than 48 hours, taking no
account of any part of a day that is not a working
day, before the time appointed for holding the
general meeting or the adjourned meeting
(as the case may be).
The directors are authorised at the AGM
each year to issue shares, to allot a limited
number of shares in the Company for cash other
than to existing shareholders, and to make
market purchases of shares within prescribed
limits. The current authorities will expire at
the AGM in November 2022. Resolutions
to be proposed at the AGM will renew these
authorities, which are explained in the Notice
of 2022 AGM sent separately to shareholders.
On 12 May 2022, the Company issued 739
shares following the exercise of options under
the Company’s 2021 Sharesave Scheme.
No further shares were issued or purchased
by the Company during the nancial year or
to the date of this Annual Report.
There are no restrictions on transferring the
Company’s shares, except for certain shares
held by the Employee Share Trust (“EST”), which
are restricted during the performance periods
of relevant Group share plans. Directors and
persons discharging managerial responsibilities
are also periodically restricted in dealing in the
Company’s shares under the Group’s share
dealing policy, reecting the requirements of
the Market Abuse Regulation. In certain specic
circumstances, the directors are permitted to
decline to register a transfer in accordance with
the Articles. There are no other limitations on
holdings of securities, and no requirements to
obtain the approval of the Company, or other
holders of shares in the Company, prior to the
share transfer. The Company is not aware of
any agreements between holders of shares
that may restrict the transfer of shares or
voting rights.
There are no shares carrying specic rights
relating to control of the Company. The EST
holds shares in the Company in connection with
Group share plans which have rights relating to
control of the Company that are not exercisable
directly by the employee. The EST abstains
from voting in respect of these shares. The EST
currently holds 3.19% of the issued share capital
of the Company for the purposes of satisfying
employee share options or share awards.
Articles of Association
The Articles, adopted pursuant to a resolution
passed on 5 November 2019, set out the
Company’s internal regulations and dene
various aspects of its constitution, including
the rights of shareholders, procedures for
appointing and removing directors, and the
conduct of directors and general meetings.
In accordance with the Articles, directors can
be appointed or removed either by the Board or
shareholders in general meeting. Amendments
to the Articles require shareholder approval
by passing a special resolution in a general
meeting. Copies of the Articles are available by
contacting the General Counsel & Company
Secretary at the registered ofce.
The directors present their Annual Report and
audited nancial statements for the Group for
the nancial year ended 30 June 2022.
100
Galliford Try Holdings plc
Signicant direct and indirect holdings
As at 30 June 2022, being the date of this
Annual Report, the Group had been made
aware of the following benecial interests
in 3% or more of the Company’s ordinary
share capital:
Shareholder
Interest
% capital
Premier Miton
Group plc
13,478,603
12.14
Standard Life
Aberdeen plc
6,436,890
5.80
Aberforth
Partners LLP
5,857, 30 4
5.27
J O Hambro
Capital
Management
Limited
5,738,929
5.17
Dimensional
Fund Advisors LP
5,552,697
4.97
Ameriprise
Financial Inc.
5,496,847 4.95
Brewin
Dolphin Ltd
5,169,266
4.66
Between 30 June 2022 and 21 September
2022, no further notications were received
under Rule 5 of the Disclosure and
Transparency Rules.
Change of control provisions
All the Group’s share plans contain provisions
relating to a change of control. The respective
plan rules permit outstanding awards to vest
on a proportional basis and then become
exercisable in the event of a change of control,
subject to the satisfaction of any performance
conditions and Remuneration Committee
approval. Other than in relation to share
schemes as described above, the Group has not
entered into any agreements with its directors
or employees which provide for compensation
for loss of ofce or employment in the event of
a takeover or change of control of the Group.
The agreements governing the Group’s joint
ventures all have appropriate change of control
provisions, none of which is signicant
in the context of the wider Group.
Directors’ interests and indemnities
Summary biographies of the directors of the
Company as at 30 June 2022 are on pages 68 to
69. The director’s interests in the Company’s
share capital are set out on page 97 and details
of executive directors’ service contracts and
non-executive directors’ letters of appointment
can be found on page 94.
The Group operates a formal procedure for
disclosing, reviewing and authorising directors’
actual and potential conicts of interest, in
accordance with the Companies Act 2006.
In addition, the Board reviews and authorises
conicts of interest, as necessary, on an
annual basis.
The Group maintained Directors’ and Ofcers’
Liability insurance on behalf of the directors
and General Counsel & Company Secretary
throughout the nancial year. In addition,
individual qualifying third-party indemnities are
provided to the directors and General Counsel
& Company Secretary, which comply with the
provisions of section 234 of the Companies Act
2006, and were in force throughout the year
and up to the date of signing this Annual Report.
Employees
The Group is committed to best-practice
employment policies, which promote equal
opportunities for all employees. We value
everyone as an individual, recognising that
everyone is different and has different needs
at work. We respect people’s differences and
treat everyone with dignity and respect. We
aim to create a culture in which everyone feels
valued and is motivated to give their best.
The Group gives full and fair consideration to
applications for employment from disabled
persons, taking into account their aptitudes
and abilities. The Group has signed up to the
Government’s Disability Condent scheme.
We carry out regular workplace assessments
and provide occupational health checks and
advice to support both employees and line
managers. Appropriate arrangements are made
for the continued training and employment,
career development and promotion of disabled
persons. If existing members of staff become
disabled, the Group endeavours to continue
employment, either in the same or an
alternative position, with appropriate
retraining and occupational assistance being
given if necessary.
Employee engagement and consultation is
encouraged through the Employee Forum
(see page 67), as well as regular informal
discussions and feedback, formal annual
appraisals, business unit staff forums and
periodic employee surveys.
Details of where to nd information regarding
the Group’s employees, remuneration
policies, employment practices and employee
involvement are provided in the Strategic
report on pages 2 to 65 and the Remuneration
Policy and Report on pages 90-99.
Details of where to nd information on other
matters of importance to stakeholders such as
environmental, social and community matters,
human rights and anti-corruption, related
policies and their impact can also be found in
the Strategic report.
Signicant agreements
There are no persons with which the Group
has contractual or other arrangements which
are essential to its business.
Charitable and political donations
For information regarding charitable donations
made through employees’ volunteering or
donation of materials, please refer to the
Strategic report on page 33.
The Group’s policy is to avoid making political
donations of any nature and none were made
during the nancial year. The Group notes
the wide application of Part 14 of the
Companies Act 2006, but does not consider
the construction industry bodies of which
it is a member to be political organisations
for the purposes of the Act.
Emissions
Details of the Group’s greenhouse gas emissions
for the nancial year can be found on page 29
and are included by reference in this report.
Creditor payment policy
The Group’s policy is to agree payment
terms contractually with suppliers and
sub-contractors, ensure the relevant terms
of payment are included in contracts, and
to abide by those terms when satised that
goods, services or assets have been provided
in accordance with the agreed contractual
terms. The Group remained a signatory to the
Prompt Payment Code throughout the nancial
year which contains, among other things,
commitments to pay suppliers within agreed
contract terms.
Financial instruments
Further information regarding the Group’s
nancial instruments, including interest rate
hedges, related policies and a consideration of
its liquidity and other nancing risks, can be
found in the Financial review from page 55
and in note 23 to the nancial statements.
Important developments during
the year
In October 2021, the Group acquired the water
business of nmcn plc (in administration).
Post Balance Sheet Events
On 8 July 2022, the Group acquired
MCS Controls Systems Limited, a leading
systems integrator to the industrial and
utilities sectors, for a consideration of £1.
For more details see Note 31 to the
nancial statements.
Going concern
In accordance with the Financial Reporting
Council’s Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting published in 2014, the
requirements of the 2018 UK Corporate
Governance Code (2018 Code) and Listing
Rule 9.8.6(3), the directors have conducted a
rigorous and proportionate assessment of the
Group’s ability to continue in existence for the
foreseeable future. This has been reviewed
during the nancial year and the directors
have concluded that there are no material
uncertainties that may cast signicant doubt
on the Group’s ability to continue as a going
concern. Furthermore, the Group has adequate
resources and visibility as to its future workload,
as explained in this Annual Report. As a result,
the Directors are satised that the Group has
adequate resources to meet its obligations as
they fall due for a period of at least 12 months
from the date of approving these nancial
statements and, accordingly, is able to adopt
the going concern basis in preparing these
nancial statements.
101
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
Directors’ report
continued
Independent auditor
Each of the directors at the date of approval of
this Annual Report conrms that:
relevant audit information of which the
auditor is unaware; and
ought to have taken as a director in order to
make himself/herself aware of any relevant
audit information and to establish that the
Group’s auditor is aware of that information.
This conrmation is given and should be
interpreted in accordance with section 418 of
the Companies Act 2006.
AGM
The 2022 AGM will be held at Peel Hunt LLP,
7th oor, 100 Liverpool Street, London,
EC2M 2AT on Friday 11 November 2022 at
11.30am. The Notice convening the AGM, sent
to shareholders separately, explains the items
of business which are not of a routine nature.
Further information on arrangements for the
AGM and voting instructions will be set out
fully in the Notice of AGM and Form of Proxy.
Fair, balanced and understandable
In accordance with the principles of the 2018
Code and as further described on page 103,
the Group has arrangements in place to ensure
that the information presented in this Annual
Report is fair, balanced and understandable.
The directors consider, on the advice of the
Audit Committee, that the Annual Report,
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Group’s performance, position, business model
and strategy.
Approval of report
This Directors’ report, the Strategic report,
and the Corporate Governance report and
Directors’ Remuneration report were
approved by the Board of Directors on
21 September 2022.
For and on behalf of the Board
Kevin Corbett
General Counsel & Company Secretary
21 September 2022
102
Galliford Try Holdings plc
Statement of directors’ responsibilities
Statement of
directors’ responsibilities
The directors are responsible for preparing the
Annual Report and the nancial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare
nancial statements for each nancial year.
Under company law the directors have
prepared the Group and Parent Company
nancial statements in accordance with UK
adopted International accounting standards.
Under company law, the directors must not
approve the nancial statements, unless they
are satised that they give a true and fair view
of the state of affairs of the Group and Parent
Company and of the prot or loss of the Group
and Parent Company for that period.
In preparing the nancial statements, the
directors are required to:
then apply them consistently;
that are reasonable and prudent;
in accordance with UK-adopted
International Accounting Standards and
with the requirements of the Companies
Act 2006; and
going concern basis, unless it is inappropriate
to presume that the Group and Parent
Company will continue in business.
The directors are responsible for keeping
adequate accounting records that are sufcient
to show and explain the Group and Parent
Company’s transactions and disclose with
reasonable accuracy at any time the nancial
position of the Group and Parent Company
and enable them to ensure that the nancial
statements and the Directors’ Remuneration
Report comply with the Companies Act 2006
and, as regards the Group nancial statements,
Article 4 of the IAS Regulation. They are also
responsible for safeguarding the assets of the
Group and the Parent Company and hence for
taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the
maintenance and integrity of the Group
and Parent Company’s website. Legislation
in the UK governing the preparation and
dissemination of nancial statements may
differ from legislation in other jurisdictions.
The directors consider that the Annual
Report and Accounts, taken as a whole,
is fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Group and
Parent Company’s performance, position,
business model and strategy.
Each of the directors, whose names and
functions are listed on pages 68 and 69,
conrms that to the best of their knowledge:
which have been prepared in accordance
with UK adopted International Accounting
Standards, give a true and fair view of the
assets, liabilities, nancial position and prot
of the Parent Company;
been prepared in accordance with UK
adopted International Accounting Standards,
give a true and fair view of the assets,
liabilities, nancial position and prot of the
Group; and
1 to 61 includes a fair review of the
development and performance of the
business and the position of the Group and
Parent Company, together with a description
of the principal risks and uncertainties that
it faces.
In the case of each director in ofce at the
date the Directors’ Report is approved:
no relevant audit information of which
the Group and Group’s auditors are
unaware; and
ought to have taken as a director in order
to make themselves aware of any relevant
audit information and to establish that the
Group and Group’s auditors are aware of
that information.
For and on behalf of the Board
Bill Hocking
Chief Executive
21 September 2022
Forward-looking statements
Forward-looking statements have been
made by the directors in good faith using
information up until the date on which
they approved this Annual Report.
Forward-looking statements should be
regarded with caution due to uncertainties
in economic trends and business risks.
The Group’s businesses are generally
not affected by seasonality.
103
Annual Report and Financial Statements 2022
Financial information
Governance
Strategic report
104
Galliford Try Holdings plc
Opinion on the nancial statements
In our opinion:
Group’s and of the Parent Company’s affairs as at 30 June 2022 and
of the Group’s prot for the year then ended;
accordance with UK adopted international accounting standards;
in accordance with UK adopted international accounting standards
and as applied in accordance with the provisions of the Companies Act
2006; and
requirements of the Companies Act 2006.
We have audited the nancial statements of Galliford Try Holdings plc
(the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 30 June 2022 which comprise the consolidated income statement,
consolidated statement of comprehensive income, balance sheets,
consolidated and company statement of changes in equity, statements of
cash ows and notes to the nancial statements, including a summary of
signicant accounting policies. The nancial reporting framework that
has been applied in their preparation is applicable law and UK adopted
international accounting standards and as regards the Parent Company
nancial statements, as applied in accordance with the provisions of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for
the audit of the nancial statements section of our report. We believe
that the audit evidence we have obtained is sufcient and appropriate to
provide a basis for our opinion. Our audit opinion is consistent with the
additional report to the Audit Committee.
Independence
Following the recommendation of the Audit Committee, we were
appointed by the members on 4 November 2019 to audit the nancial
statements for the year ending 30 June 2020 and subsequent nancial
periods. The period of total uninterrupted engagement including
retenders and reappointments is three years, covering the years ending
30 June 2020 to 30 June 2022. We remain independent of the Group and
the Parent Company in accordance with the ethical requirements that are
relevant to our audit of the nancial statements in the UK, including the
FRC’s Ethical Standard as applied to listed public interest entities, and we
have fullled our other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard were
not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the nancial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the preparation
of the nancial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
in the context of the Group’s secured ongoing contracts, the secured
new work and forecast potential work which were agreed to the Board
approved forecasts.
to construction resulting in reduced volume of work and impact of
materials and labour price ination.
current nancial year and post year end to evaluate the Directors’
accuracy and achievability of the forecasts prepared.
report in relation to the specic risks posed, the scenarios the Directors
have considered and conclusions made.
Based on the work we have performed, we have not identied any
material uncertainties relating to events or conditions that, individually
or collectively, may cast signicant doubt on the Group and the Parent
Company’s ability to continue as a going concern for a period of at least
12 months from when the nancial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the
UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the nancial
statements about whether the Directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect
to going concern are described in the relevant sections of this report.
Overview
Coverage
94% (2021: 92%) of Group prot before tax
99% (2021: 97%) of Group revenue
92% (2021: 99%) of Group total assets
Key audit
matters
2022
2021
Revenue and prot recognition for
construction contracts
Recognition and recoverability
of claims and variations
Accounting for acquisition
of NMCN
Materiality
Group nancial statements as a whole
£1.9m (2021: £1.5m) based on 0.15% (2019: 0.14%)
of revenue.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group
and its environment, including the Group’s system of internal control, and
assessing the risks of material misstatement in the nancial statements.
We also addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the Directors
that may have represented a risk of material misstatement.
We tailored the scope of our audit to ensure that we performed enough
work to be able to give an opinion on the Group nancial statements
as a whole, taking into account the geographic structure of the Group,
the accounting processes and controls, and the industry in which the
Group operates.
In establishing the overall approach to the Group audit, we assessed the
audit signicance of each reporting unit in the Group by reference to both
its nancial signicance and other indicators of audit risk, such as the
complexity of operations and the degree of estimation and judgment in
the nancial results.
All of the Group’s ve signicant components were subjected to full
scope audits for Group purposes. For insignicant components, we
carried out specied audit procedures. All components are located in
the UK and were audited by the Group audit team.
Independent auditor’s report
Independent auditor’s report
to the members of Galliford Try Holdings plc
105
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the nancial statements of the current
period and include the most signicant assessed risks of material misstatement (whether or not due to fraud) that we identied, including those which
had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter How the scope of our audit addressed the key audit matter
Revenue and prot recognition for construction contracts
Note 1 on page 116 to the nancial
statements gives further detail
regarding the estimates and
judgments made by the Group in
this regard. Note 1 on page 117
to the nancial statements
provides the accounting policy
for construction services.
For the majority of long term
contracts, the Group recognises
revenue over time and measures
progress based on the input
method by considering the costs
incurred to date, relative to
the total estimated forecast
costs applied to the estimated
forecast revenue.
This is considered a signicant
risk as the stage of completion,
forecast revenue and forecast
costs on contracts are areas of
signicant judgment.
These judgments have a
consequential impact on a number
of contract balances, including
trade receivables, contract assets,
trade payables, accruals and
contract liabilities within the
nancial statements including the
related judgments and estimates
disclosures. There is also a risk that
the accounting policies are not in
accordance with – IFRS 15 Revenue
from contracts with customers
(‘IFRS 15’).
Having considered the above we
determined that contract revenue
and other related contract balances
have an inherent high degree of
estimation uncertainty with a range
of possible outcomes and hence we
have treated these areas as a KAM.
We obtained an understanding of and evaluated management’s processes and controls for ensuring contracts
meet the requirements of IFRS 15.
We have tested the operating effectiveness of the following controls:
We focused our work on those contracts with the greatest estimation uncertainty, based on the information
included in the contract schedule (eg signicant movement from tender/prior year or large unagreed variations
or claims) and challenged the judgments made with the project teams as well as senior operational, legal,
commercial and nancial management. On each contract selected, we specically challenged and critically
assessed the explanations provided by management and carried out the following detailed testing:
customer and holding discussions with commercial teams and management.
The procedures to test the judgments in forecast revenue are included in the key audit matter on recognition
and recovery of claims and variations.
amounts received to bank. Where the balance has not been received into bank, we have considered
recoverability of the balance by reviewing correspondence with the customer.
as well contract assets and liabilities.
and where the subcontractor projected nal accounts signicantly differed from the amount included in the
contract forecast we Challenged management and obtained supporting evidence as applicable.
stage of completion of each cost type to determine where costs are progressing in line with the overall stage of
completion. We challenged management where costs were not in line with our expectations and obtained
supporting documentation as applicable.
carrying out testing, including site visits, cost testing and payments testing.
assurance has been obtained and that we have sufcient coverage over the costs to complete.
certied completion, judgments made in determining forecast costs and the remaining contingency on a
project for the possibility of a material misstatement.
substantial costs yet to procure as this presents a greater risk. We corroborated a sample of un-procured
subcontractor costs to documentary evidence.
the value of work performed, and the receipt of post year end funds.
anticipated completion date and impact of any delays, whether there are any disputes with third parties on
the contract and the reason for any movements in forecasts from tender to 30 June 2022. We obtained
corroborating evidence for the explanations provided.
and where necessary spoke directly with management’s experts who had provided this advice.
We carried out targeted testing on the remaining contracts which includes comparing the revenue recognised to
amounts certied or nal accounts where applicable. From the specic contract information reviewed for these
contracts, we considered whether there was an indication of risks within the contract such as delays and
un-procured costs for which we then performed additional procedures to address the risk.
We visited a sample of sites across the business. We inspected the physical progress of the sites and discussed
progress with personnel working on the specic sites.
We assessed the reliability of management’s estimates by reviewing the uctuations in budgeted end of life
margin from 30 June 2021 to 30 June 2022 for projects that are substantially completed at the year-end as well
as from tender to the 30 June 2022 for all contracts.
We considered the adequacy of the disclosures in the nancial statements in relation to specic contracts and
also the disclosures in respect of signicant judgments and estimates.
Key observations:
We consider that the estimates and judgments made by management in respect of revenue recognition and the
associated disclosures are appropriate.
106
Galliford Try Holdings plc
Key audit matter How the scope of our audit addressed the key audit matter
Recognition and recoverability of claims and variations
Note 1 on page 116 to the nancial
statements gives further detail
regarding the estimates and
judgments made by the Group in
this regard. Note 1 on page 117 to
the nancial statements provides
the accounting policy for
construction services.
In a number of the Group’s projects
there are assumptions of amounts
contractually due from customers,
and contract assets can include
variations and claims which are
not yet certied or formally
agreed but have been assessed
as highly probable of not reversing
under IFRS 15.
The Group has submitted claims
of £95m and recognised signicant
recoveries in respect of three
contracts with entities owned
by a major infrastructure fund
of a blue-chip listed company.
The Group has been successful in
adjudications on these projects and
has assumed recoveries from these
claims. The parties have agreed that
the claim will be resolved through
an arbitration process that is
currently underway.
The assessment of revenue
that is highly probable that there
will not be a signicant reversal
requires judgment. Similarly,
the assessment of the expected
credit loss as regards contract
assets is judgmental. There also
is a risk these signicant
judgments and estimates
are not adequately disclosed.
In addition, there are some
downstream claims against third
parties other than customers which
are only recognised once they are
considered to be ‘virtually certain’
of recoverability, in accordance
with IAS 37 – Provisions,
Contingent Liabilities and
Contingent Assets.
These assumptions impact revenue
recognised on these contracts, as
well as contracts assets balances
and hence is considered to be a key
audit matter.
We challenged management’s assessment of forecast revenue, in particular the key assumptions, which included
the expected recovery of variations, claims and compensation events from clients, to determine the basis on
which the associated revenue was considered to be ‘highly probable of not reversing’.
In respect of the three contracts with entities owned by a major infrastructure fund, we have obtained the
adjudication ndings and discussed the results and implications with the Group’s in house counsel and external
legal advisors. We have also reviewed evidence of the recovery on instructed variations previously agreed
on those contracts. We reviewed the reconciliation between management’s assessment of the claim and the
contract asset recorded in the nancial statements as highly probable of not reversing and obtained explanations
for the difference between these positions.
We challenged management’s assessment of the revenue constraint on the basis of this analysis and the
recoveries from previous adjudications and agreed variations on these contracts.
We considered the adequacy of provisions held and challenged movements since the prior year based on our
understanding of the contracts, meetings with in-house counsel and review of key project correspondence.
We assessed the evidence supporting the claims submitted including meeting with management’s internal and
external legal and other experts regarding the claims. This followed a review of the correspondence to date,
including the most recent correspondence as regards the ongoing arbitration.
We obtained management’s previous legal advice regarding the basis of the contract terminations and the
nancial and ownership status of the parties with whom the Group was contracted. We met with management’s
external legal counsel numerous times throughout the year in order to understand the progress on any ongoing
legal claims/disputes. We challenged whether management’s assessment of the revenue constraint remained
appropriate, also considering the passage of time.
We obtained and challenged management’s assessment of IFRS 9 expected credit loss in respect of these
contract assets. We challenged this assessment based on the most recently led annual report of the immediate
parent and investor in these entities. We assessed the disclosures included in the nancial statements in respect
of these infrastructure contracts, including whether they convey the estimates involved and judgments taken by
management.
In relation to other claims we also challenged those assumptions in respect of estimated recoveries from
subcontractors, designers, and insurers included in the forecast, to determine whether these could be considered
‘virtually certain’ of recoverability.
In relation to other claims we assessed the evidence provided by management regarding recovery of these
amounts to evidence of agreement with customers or insurance reserves provided by the insurers.
Key observations:
We consider that the estimates and judgements and associated disclosures made by management in respect of
revenue recognition and downstream claims are reasonable.
Independent auditors’ report
continued
107
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Key audit matter How the scope of our audit addressed the key audit matter
Accounting for the acquisition of nmcn
Note 30 on page 141 to the
nancial statements gives further
detail regarding the acquisition of
the water business from nmcn plc.
Note 1 on page 116 to the
nancial statements describes
managements signicant
judgments.
In the current period, the Group
acquired certain contracts that are
part of the water business of nmcn,
in addition to the company Lintott
Environmental Technologies
Limited. Management has
accounted for this as a business
combination under IFRS 3.
Signicant judgment is exercised in
the measurement of the fair value
of the assets and liabilities acquired,
the associated goodwill, and the
disclosure of exceptional items in
the consolidated income statement,
as a result of the business
combination and is therefore
considered a KAM.
We have reviewed managements paper outlining the signicant judgments/estimates involved in accounting for
the acquisition.
We have considered the fair value of the assets and liabilities acquired based on the review performed by
external experts engaged by management and calculations prepared by management.
We have corroborated schedules prepared by management to underlying supporting documentation and
have also tested the underlying models/schedules provided by management’s external experts as the basis
of their valuation.
We have obtained managements analysis of the consideration of the acquisition and have agreed this to the
Share Purchase Agreement.
We have reviewed the goodwill calculation provided by management, which is underpinned by the valuation
performed by management’s external experts and calculations of favourable and unfavourable contracts.
We have also used our internal valuation experts to review the models that were prepared by management’s
external experts. We have reviewed the forecasts that underpin the management’s external experts’ model
and have agreed a sample of contracts to supporting documentation.
We have agreed the total exceptional costs to underlying supporting schedules. These schedules have been
agreed to supporting documentation, including challenge of the basis of movement for the employees from
productive to unproductive.
We have also challenged management on the presentation of the items as exceptional items and the
associated disclosures.
Key observations:
We consider that the estimates and judgments and associated disclosures made by management in respect of
the acquisition of nmcn are reasonable.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to
be the magnitude by which misstatements, including omissions, could inuence the economic decisions of reasonable users that are taken on the basis
of the nancial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance
materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as
we also take account of the nature of identied misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the
nancial statements as a whole.
Based on our professional judgment, we determined materiality for the nancial statements as a whole and performance materiality as follows:
Group nancial statements
Parent Company nancial statements
2022
£m
2021
£m
2022
£m
2021
£m
Materiality
1.9
1.5 1.8
1.4
Basis for determining
materiality
0.15% of revenue 0.14% of revenue 95% of Group materiality 95% of Group materiality
Rationale for the
benchmark applied
On an ongoing basis and in previous years an adjusted
measure of prot before tax has been the basis which
users of the nancial statements would be interested in
as the basis of materiality.
We adjusted this basis in the prior and current year due to
previous losses incurred by the continuing businesses.
As the Group continues to return to protability, we have
considered what would be a stable basis of operations and
have benchmarked to other peers materiality as a proportion
of revenue. Based on this we have set Group materiality at
0.15% (2021: 0.14%) of Group revenue.
Materiality for the Parent company was capped at 85% of
Group materiality.
Performance
materiality
1.2
0.9
1.1
0.9Basis for determining
performance materiality
On the basis of our risk assessment, together with our assessment of the Group’s overall control environment and
history of adjustments, our judgment was that overall performance materiality of the Group and Parent company
should be 65% of materiality.
108
Galliford Try Holdings plc
Component materiality
We set materiality for each component of the Group based on a
percentage of between 5% and 95% (2021: 5% and 95%) of Group
materiality dependent on the size and our assessment of the risk
of material misstatement of that component. Component materiality
ranged from £0.1m to £1.8m (2021: £0.1m to £1.35m). In the audit
of each component, we further applied performance materiality levels
of 65% (2021: 65%) of the component materiality to our testing to
ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them
all individual audit differences in excess of £38,000 (2021: £30,000).
We also agreed to report differences below this threshold that, in our
view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other
information comprises the information included in the Annual Report
and Financial Statements 2022 other than the nancial statements
and our auditor’s report thereon. Our opinion on the nancial statements
does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information
and, in doing so, consider whether the other information is materially
inconsistent with the nancial statements or our knowledge obtained
in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the nancial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Parent company’s
compliance with the provisions of the UK Corporate Governance
Code specied for our review.
Based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the Corporate Governance
Statement is materially consistent with the nancial statements or
our knowledge obtained during the audit.
Going concern
and longer-term
viability
appropriateness of adopting the going concern basis
of accounting and any material uncertainties
identied set out on page 101 and
the Group’s prospects, the period this assessment
covers and why the period is appropriate set out on
page 54.
Other Code
provisions
understandable set out on page 102;
assessment of the emerging and principal risks set
out on page 43;
review of effectiveness of risk management and
internal control systems set out on page 43; and
Committee set out on page 84.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed
during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on certain opinions and matters as
described below.
Strategic
report and
Directors’
report
In our opinion, based on the work undertaken in the
course of the audit:
the Directors’ report for the nancial year for which
the nancial statements are prepared is consistent
with the nancial statements; and
have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the
Group and Parent Company and its environment
obtained in the course of the audit, we have not
identied material misstatements in the strategic
report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on
which we are
required to
report by
exception
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
the Parent Company, or returns adequate for our
audit have not been received from branches not
visited by us; or
part of the Directors’ remuneration report to be
audited are not in agreement with the accounting
records and returns; or
specied by law are not made; or
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors’ responsibilities,
the Directors are responsible for the preparation of the nancial
statements and for being satised that they give a true and fair view,
and for such internal control as the Directors determine is necessary
to enable the preparation of nancial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the nancial statements, the Directors are responsible for
assessing the Group’s and the Parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
nancial statements
Our objectives are to obtain reasonable assurance about whether the
nancial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
inuence the economic decisions of users taken on the basis of these
nancial statements.
Independent auditors’ report
continued
109
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Extent to which the audit was capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework
applicable to the Group and the industry in which it operates, and
considered the risk of acts by the Group that were contrary to applicable
laws and regulations, including fraud. We also communicated relevant
identied laws and regulations and potential fraud risks to all engagement
team members and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
We focused on laws and regulations that could give rise to a material
misstatement in the nancial statements, including, but not limited to,
the Companies Act 2006, the UK Listing Rules and tax legislation.
Our tests included agreeing the nancial statement disclosures to
underlying supporting documentation, review of board and committee
meeting minutes, enquiries with management, enquiries of in-house legal
counsel as to whether there was any known or suspected non-compliance
with laws and regulations or fraud. We tested operating effectiveness of
controls around procurement and tendering process.
We addressed the risk of management override of internal controls,
including testing journals and evaluating whether there was evidence of
bias by the Directors within the signicant judgments and estimates that
represented a risk of material misstatement due to fraud.
Our audit procedures were designed to respond to risks of material
misstatement in the nancial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through
collusion. There are inherent limitations in the audit procedures
performed and the further removed non-compliance with laws and
regulations is from the events and transactions reected in the
nancial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Parent
Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than
the Parent Company and the Parent Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.
Thomas Edward Goodworth (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
21 September 2022
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
110
Galliford Try Holdings plc
Notes
2022
2021
Pre-
Exceptional
items
£m
Exceptional
items
(note 4)
£m
Total
£m
Total
£m
Revenue 1,237.2 – 1,237.2 1,124.8
3
Cost of sales 1,049.7 )
(1,151.5 ) (5.8 ) (1,157.3 )
(Gross prot/(loss) 85.7 (5.8 ) 79.9 75.1
Administrative expenses 67.1 )
(69.9 ) (7.9 ) (77.8 )
(Operating prot/(loss) 15.8 (13.7 ) 2.1 8.0
Share of post tax prots from joint ventures 0.4 – 0.4 0.5
Finance income 6 4.3 – 4.3 4.1
Finance costs 6 1.2 )
(1.4 ) – (1.4 )
(Prot/(loss) before income tax
7 19.1 (13.7 ) 5.4 11.4
Income tax (expense)/credit 8 1.0 )
(1.7 ) 2.6 0.9
(Prot/(loss) from continuing operations for the year 17.4 (11.1 ) 6.3 10.4
Loss from discontinued operations, net of income tax for the year
34 – – – (2.7 )
Prot/(loss) for the year 17.4 (11.1 ) 6.3 7.7
Earnings per share
Basic
— 16.0 5.8 9.5 p
Prot from continuing operations attributable to ordinary shareholders
10 — 16.0 5.8 7.0 p
Prot attributable to ordinary shareholders
10Diluted
— 15.0 5.5 9.1 p
Prot from continuing operations attributable to ordinary shareholders
10 — 15.0 5.5 6.8 p
Prot attributable to ordinary shareholders
10There were no exceptional items in the prior year.
The notes are an integral part of the consolidated nancial statements.
Consolidated income statement
for the year ended 30 June 2022
111
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Notes
2022
£m
2021
£m
Prot for the year 6.3 7.7
Other comprehensive income:
Items that may be reclassied subsequently to prot or loss
Movement in fair value of PPP and other investments – continuing operations
16 7.3
(0.9 )
Total items that may be reclassied subsequently to prot or loss
(0.9 ) 7.3
Other comprehensive (expense)/income for the year net of tax
(0.9 ) 7.3
Total comprehensive income for the year 5.4 15.0
The notes are an integral part of the consolidated nancial statements.
Consolidated statement of
comprehensive income
for the year ended 30 June 2022
112
Galliford Try Holdings plc
Notes
Group Company
30 June 2022
£m
30 June 2021
(restated
– note 35
£m
30 June 2022
£m
30 June 2021
£m
Assets
Non-current assets
Intangible assets
11 8.8 5.7
––
Goodwill 12 88.2 77.2
–
–
Property, plant and equipment
13 7.1 4.4
––
Right-of-use assets
14 24.5 19.5
––
Investments in subsidiaries –
15 –
188.0
173.9
Investments in joint ventures 0.3 0.2 – –
PPP and other investments 16 47.5 49.1
–
–
Deferred income tax assets 22 14.0 14.3
–
–
Total non-current assets 190.4 170.4 188.0
173.9
Current assets
Trade and other receivables
17 243.0 241.4
––
Current income tax assets 3.1 4.3 – –
Cash and cash equivalents
18 218.9 216.2
109.4
100.7Total current assets 465.0 461.9 109.4
100.7
Total assets 655.4 632.3 297.4
274.6
Liabilities
Current liabilities
Trade and other payables
19 454.0 )
–(471.1 )
(–
Lease liabilities
14 7.3 )
–(9.9 )
(–
Provisions for other liabilities and charges
20 25.0 )
(27.4 )
(Total current liabilities
(508.4 )
–(486.3 )
–Non-current liabilities
Lease liabilities
14 11.9 )
–(14.9 )
(–
Total non-current liabilities
(14.9 )
–(11.9 )
–Total liabilities
(523.3 )
(498.2 )
––
Net assets 132.1 134.1 297.4
274.6
Equity
Ordinary shares
24 55.5 55.5
55.5
55.5Other reserves 26 132.2 118.4
132.2
118.4Retained earnings
26 39.8 )
(55.6 )
(109.7
100.7Total equity attributable to owners of the Company 132.1 134.1 297.4
274.6
The prot for the Parent Company for the year was £28.8m (2021: prot of £34.7m).
The notes are an integral part of the consolidated nancial statements.
The nancial statements on pages 110 to 149 were approved and authorised for issue by the Board on 21 September 2022 and signed on its
behalf by:
Bill Hocking Andrew Duxbury Galliford Try Holdings plc
Chief Executive Finance Director Registered number: 12216008
Balance sheets
113
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Notes
Ordinary
shares
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
shareholders’
equity
£m
Consolidated statement
At 30 June 2020 55.5 – 85.7 (20.7 ) 120.5
Prot for the year – – – 7.7 7.7
Other comprehensive income – – – 7.3 7.3
Total comprehensive income for the year – – – 15.0 15.0
Transactions with owners:
Dividends 9 – – – (1.3 ) (1.3 )
Purchase of shares – – –
(1.1 ) (1.1 )
Share-based payments – continuing operations – – – 1.0 1.0
Recycling of retained earnings to merger reserve on reversal of
impairment of investment in Galliford Try Limited – – 32.7 (32.7 ) –
26
At 30 June 2021 55.5 – 118.4 (39.8 ) 134.1
Prot for the year – – – 6.3 6.3
Other comprehensive income – – – (0.9 ) (0.9 )
Total comprehensive income for the year – – – 5.4 5.4
Transactions with owners:
Dividends 9 – – – (6.3 ) (6.3 )
Purchase of shares – – – (3.4 ) (3.4 )
Share-based payments – – – 2.3 2.3
Recycling of retained earnings to merger reserve on reversal of
impairment of investment in Galliford Try Limited
26 – – 13.8 (13.8 ) –
At 30 June 2022 55.5 – 132.2 (55.6 ) 132.1
Company statement
At 30 June 2020
55.5
–85.7 100.0 241.2
Prot for the year – – –
34.7 34.7
Total comprehensive expense 34.7
– – –
34.7Transactions with owners:
Dividends 9 (1.3)
– – –
(1.3)Recycling of retained earnings to merger reserve on reversal of
impairment of investment in Galliford Try Limited –
26
–32.7 (32.7)
–At 30 June 2021
55.5 – 118.4 100.7 274.6
Prot for the year
– – – 28.8 28.8
Total comprehensive expense
– – – 28.8 28.8
Transactions with owners:
Dividends 9
– – – (6.3) (6.3)
Share-based payments
– – – 0.3 0.3
Recycling of retained earnings to merger reserve on reversal of
impairment of investment in Galliford Try Limited
26
– – 13.8 (13.8) –
At 30 June 2022 55.5 – 132.2 109.7 297.4
Consolidated and Company statements of
changes in equity
for the year ended 30 June 2022
114
Galliford Try Holdings plc
Notes
Group Company
2022
£m
2021
(restated
– note 35
£m
2022
£m
2021
£m
Cash ows from operating activities
Prot for the year 6.3 7.7 28.8
34.7
Adjustments for:
Loss for the year from discontinued operations
34 – 2.7
––
Income tax (credit)/expense – continuing operations
8 1.0
–(0.9 )
–
Net nance income – continuing operations
6 2.9 )
–(2.9 )
(–
Prot before nance costs for continuing operations 2.5 8.5 28.8
34.7
Adjustments for continuing operations:
Depreciation and amortisation 11, 13 & 14 14.5 13.3
–
–
Reversal of impairment of investment in subsidiary undertaking –
15 –
(13.8)
(32.7)
Dividends received from subsidiary undertakings – –
(15.0)
(2.0)
Share-based payments 2.3 1.0 – –
Share of post-tax (prots)/losses from joint ventures
(0.4 )
–(0.5 )
–Net cash generated from operations before changes in working capital 18.9 22.3 –
–
Decrease in trade and other receivables 1.2 15.8 – –
Increase in trade and other payables 6.7 11.3 – –
(Decrease)/increase in provisions 20 9.4
(11.3 )
Net cash generated from operations 15.5 58.8 –
–
Interest received 4.3 4.1
–
–
Interest paid 1.2 )
(1.4 )
(–
–
Net surplus returned on wind up of dened benet pension scheme – 1.0 – –
Income tax received 4.4 4.5
–
–
Net cash generated from operating activities from continuing operations 22.8 67.2 –
–
Net cash used in operating activities from discontinued operations – –
(3.6 )
–Net cash generated from operating activities 22.8 63.6 –
–
Cash ows from investing activities
Dividends received from joint ventures and associates 0.3 0.5 – –
Increase in amounts due from joint ventures – –
(5.2 )
–Decrease in amounts due from joint ventures 5.0 –
Acquisition of PPP and other investments
16 – (1.9 )
––
Proceeds from disposal of PPP and other investments and loan repayments
16 0.7 0.7
––
Acquisition of business combinations, net of cash acquired –
30
(0.3 )
–
–Dividends received from subsidiary undertakings – –
15.0
2.0
Proceeds from disposal of property, plant and equipment –
13 0.1
–
–Acquisition of property, plant and equipment
13 2.1 )
–(5.0 )
(–
Net cash generated from/(used in) investing activities from continuing operations 0.8
(8.0 )
15.02.0
Net cash (used in) from investing activities from discontinued operations – –
(23.7 )
–Net cash generated from/(used in) investing activities 0.8
(31.7 )
15.02.0
Cash ows from nancing activities
Repayment of lease liabilities
14 10.5 )
–(11.2 )
(–
Purchase of own shares
(3.4 )
–(1.1 )
–Dividends paid to Company shareholders
9 1.3 )
(6.3 )
((6.3)
(1.3)Net cash used in nancing activities from continuing operations
(20.9 )
(12.9 )
(6.3)(1.3)
Net cash used in nancing activities from discontinued operations – –
–
–Net cash used in nancing activities
(20.9 )
(12.9 )
(6.3)(1.3)
Net increase in cash and cash equivalents 2.7 19.0 8.7
0.7
Cash and cash equivalents at 1 July
18 216.2 197.2
100.7
100.0Cash and cash equivalents at 30 June
18 218.9 216.2
109.4
100.7Statements of cash ows
for the year ended 30 June 2022
115
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
1 Accounting policies
General information
incorporated, listed and domiciled in the UK
the laws of England and Wales . The address of the registered ofce
is 3 Frayswater Place, Cowley, Uxbridge, UB8 2AD. The Company has
its listing on the London Stock Exchange.
The nancial statements are presented in pounds sterling because
that is the currency of the primary economic environment in which the
Group operates. The amounts stated are denominated in millions (£m).
Basis of accounting
For the year to 30 June 2022, the Group consolidated nancial
statements and the Company nancial statements have been prepared
in accordance with UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006, following the UK’s
exit from the European Union on 31 January 2020, and ending of the
transition period on 31 December 2020. There was no impact or changes
in accounting policies from the transition, which reects a change in
accounting framework.
The consolidated nancial statements have been prepared on a going
concern basis under the historical cost convention, as modied by the
revaluation of PPP and other investments and nancial assets and
liabilities (including derivative nancial instruments) at fair value
through other comprehensive income.
The Group’s business activities, together with the factors likely to affect
its future development, performance and position are set out in the
Viability Statement (on page 54) and the Strategic Report (from page 1).
As at 30 June 2022, the Group had substantial cash balances, no debt,
and a strong forward secured order book. The directors regularly review
the working capital requirements of the Group while considering
downside sensitivities.
The Group’s forecasts have been prepared in the context of the current
economic conditions and additionally, the directors have considered a
range of downside sensitivities (as discussed in detail in the Viability
Statement on page 54). Even in the worst-case scenario, the Group is
forecast to continue to meet its obligations and remain cash positive
for a period of at least 12 months from the date the nancial statements
are authorised for issue.
After making enquiries and considering the factors and sensitivities
outlined above for a range of scenarios, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus, they continue
to adopt the going concern basis of accounting in preparing the annual
nancial statements.
The Company has elected to take the exemption under section 408
of the Companies Act 2006 to not present the Parent Company income
statement and statement of comprehensive income.
New standards impacting the Group that have been adopted for the
rst time in this set of nancial statements are listed below:
Reform – Phase 2
Extension of the practical expedient
These standards have been assessed to have no signicant impact
on the Group as they are either not relevant to the Group’s activities
or require accounting which is consistent with the Group’s previous
accounting policies.
The following are new standards, interpretations and amendments,
that are not yet effective or have not been endorsed. The Group has
chosen not to adopt these early. These may however have an effect
on the Group’s future nancial statements:
on classication of liabilities
arising from a Single Transaction’
The Group has yet to assess the full outcome of these new standards,
amendments, and annual improvements. It is not expected that these
will signicantly impact the nancial statements of the Group.
Basis of consolidation
The Group nancial statements incorporate the results of Galliford Try
Holdings plc, its subsidiary undertakings and the Group’s share of the
results of joint arrangements. Subsidiaries are all entities over which the
Group has control. The exposure or right to variable returns from its
involvement with an investee, and the ability to inuence those returns,
are considered when assessing whether the Group controls another
entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group, until the date that control ceases.
The acquisition method of accounting is used to account for the
acquisition of a business by the Group. The cost of an acquisition is
measured at the fair value of the assets transferred, equity instruments
issued and liabilities incurred or assumed at the date of exchange.
Costs directly attributable to the acquisition are expensed to the income
statement. The identiable assets acquired and liabilities and contingent
liabilities assumed in the business combination are measured initially at
their fair values at the acquisition date, irrespective of any non-controlling
interest. The excess of cost of acquisition over the fair value of the Group’s
share of the identiable net assets acquired is recorded as goodwill. If the
fair value of the Group’s share of the identiable net assets is in excess of
the cost of the acquisition, the gain on bargain purchase is recognised as a
credit through the income statement.
Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are also eliminated but considered an impairment indicator of
the asset transferred. Accounting policies of acquired subsidiaries are
changed where necessary, to ensure consistency with policies adopted
by the Group.
In addition to total performance measures, the Group discloses additional
information including performance before exceptional items and
earnings per share before exceptional items. The Group believes that
this additional information provides useful information on underlying
trends. This additional information is not dened under international
accounting standards and may therefore not be comparable with similarly
titled prot measures reported by other companies. It is not intended to
be a substitute for, or superior to, international accounting standards
measures of prot.
Critical accounting estimates and judgments
The preparation of the consolidated nancial statements requires
management to make judgments, estimates and assumptions that affect
the application of policies and reported amounts of assets, liabilities,
income and expenses. Critical judgments are those management has
made when applying its signicant accounting policies, whereas critical
estimates are assumptions and estimates made at the end of the reporting
period that have a signicant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities within the next nancial year.
The estimates, judgments and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis
of making estimates and judgments about the carrying value of assets
and liabilities which are not readily apparent from other sources. Actual
results may differ from these estimates and judgments. The estimates,
judgments and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates and judgments are recognised in the
period in which the estimate or judgment is revised if the revision affects
only that period, or in the period of revision and future periods if the
revision affects both current and future periods.
Notes to the consolidated nancial statements
116
Galliford Try Holdings plc
1 Accounting policies (continued)
Critical accounting estimates and judgments (continued)
Material estimates, judgments and assumptions are made in particular
with regards to establishing the following policies:
(i) Impairment of goodwill and intangible assets (judgment and estimate)
The determination of the value of any impairment of goodwill and
intangible assets requires an estimation of the value in use of the Cash
Generating Units (CGUs) to which goodwill has been allocated. The value
in use calculation requires an estimate of the future cash ows expected
from these CGUs, including the anticipated growth rate of revenue and
costs as well as resulting operating margin and requires the determination
of a suitable discount rate to calculate the present value of the cash ows.
Details of the goodwill impairment review calculations and associated
sensitivity analysis performed are included in note 12.
(ii) Revenue and prot recognition for long term contract accounting
(judgment and estimate)
In order to determine the prot and loss that the Group is able to
recognise on its construction contracts in a specic period, the Group
has to estimate the outcome of both the total costs to complete the
contract as well as the nal contract value. The Group has to allocate
total costs of the construction contracts between the amount incurred
on the contract to the end of the reporting period and the proportion
to complete in a future period. The assessment of the total costs to be
incurred and nal contract value requires a degree of estimation.
Contract modications are recognised when the Group considers they
have been approved (which also includes consideration of whether
enforceable rights exist in the contract). The estimation of nal contract
value includes the assessment of the recovery of variations, claims and
compensation events (contract modications). The estimate made is
constrained in accordance with IFRS 15 so that it is highly probable not to
result in a signicant reversal of revenue in the future. Where the change
in scope results to an increase to the work to be performed that is distinct
and reects the stand-alone selling price of the distinct good/service, it is
treated as a separate contract. This is assessed on a contract specic basis.
The Group recognises recoveries of claims from clients as revenue
where clear entitlement has been established, such as through
dispute-resolution processes. This includes the recovery of costs
(such as delays to the contract programme) to the extent it is highly
probable not to result in a signicant reversal of revenue in the future.
The estimation of costs to complete is based on all available relevant
information such as procured packages and management experience and
includes estimation of nal accounts and any potential maintenance and
defect liabilities. Recoveries resulting from actual or potential claims
against subcontractors are accounted for in accordance with IAS 37
and are recognised only when they meet the virtually certain threshold.
Group management has established internal controls to review and
ensure the appropriateness of estimates made on an individual contract
basis, including any necessary contract provisions. As with most large,
complex construction projects, there is an element of estimation
uncertainty over costs to complete and nal account settlements. This is,
however, reduced by the experience of the management team and the
controls that we have in place. The settlement of these nal accounts may
give rise to an over or under-recognition of prot or loss and associated
cash ows, which could be material.
As at 30 June 2022, the Group’s contract assets, contract liabilities and
contract provisions amounted to £173.4m, £104.4m and £27.4m
respectively as set out in Notes 17, 19 and 20. The Group has considered
the nature of the estimates involved in deriving these balances and
concluded that it is possible, on the basis of existing knowledge, that
outcomes within the next nancial year may be different from the Group’s
assumptions applied as at 30 June 2022 and could require a material
adjustment to the carrying amounts of these assets and liabilities in the
next nancial year. However, due to the level of uncertainty, combination
of cost and income variables and timing across the Group’s large portfolio
of contracts at different stages of their contract life, it is impracticable to
provide a quantitative analysis of the aggregated judgements that are
applied at a portfolio level.
The Group’s ve largest unagreed variations and claims positions
at the year end are summarised in aggregate below, the most signicant
of which relates to three contracts with entities owned by a major
infrastructure fund of a blue-chip listed company (as detailed
further below).
£m
Overall contract value (including total estimated end of
contract variations and claims after IFRS 15 constraints)
569.5
Revenue in the year
101.9
Total estimated end of contract variations and claims
before IFRS 15 constraints
136.0
Total estimated end of contract variations after
IFRS 15 constraints
65.4
These ve positions represent the most signicant estimates of revenue.
The aggregate unagreed variations and claims constrained revenue
recognised at year end of the subsequent ve largest unagreed variations
and claims is £5.9m.
These items include estimation uncertainty, with a range of reasonably
possible outcome of £nil to £136.0m.
In respect of contract assets of £173.4m (30 June 2021 (restated, see
note 35):£156.0m) and in assessing receivable provisions calculated
on an expected loss basis, the Group has recorded a provision of £14.0m
(2021: £14.0m). The directors’ estimate represents a reasonably possible
outcome within an estimated reasonable range of outcomes of nil to £nil
to £24m (2021: nil to £24m).
It is unclear whether the outstanding uncertainties will be resolved
within the next 12 months.
There is one signicant estimated claim recovery in our Infrastructure
business in respect of three contracts with entities owned by a major
infrastructure fund of a blue-chip listed company. Included in contract
assets of £173.4m is an assessment of the recovery to be made in respect
of the outstanding claims on these contracts, which are still being
assessed with customers and recoveries have been assumed as highly
probable. Our claims, supported by third-party advice, exceed the
amounts recognised. However, there is a range of possible outcomes
when these claims are nally settled. Further details are included in the
Financial review on page 56 and note 17.
(iii) Taxation (judgment and estimate)
Deferred tax liabilities are generally provided for in full and deferred tax
assets are recognised to the extent that it is probable that future taxable
prot will arise against which the temporary differences will be utilised.
Management judgment is required to determine the amount of deferred
tax assets that can be recognised, based on the likely timing and level of
future taxable prots (note 22).
The Group has assessed that an asset equal to the value of unutilised
tax credits expected to be utilised over the next three nancial years is
appropriate, as, based on the already secured work for that timeframe,
management has assessed it is probable that the Group will have
sufcient taxable prots to enable the deferred tax asset to be recovered.
Any remaining unutilised tax credits have not been recognised.
(iv) Exceptional items (judgment)
Exceptional items are items of nancial performance which the
Group believes should be presented separately on the face of the
income statement, to assist in understanding the underlying nancial
performance achieved by the Group. Determining whether an item is
part of underlying items or non-underlying items requires judgment.
Details of exceptional items included in the nancial statements are
included in note 4.
(v) PPP and other investments measured at fair value through other
comprehensive income (estimate)
At 30 June 2022, £47.5m (2021: £49.1m) of PPP and other investments
were classied as nancial assets measured at fair value through other
comprehensive income. In the operational phase, the fair value of these
nancial assets is measured at each reporting date by discounting the
future value of the cash ows allocated to the nancial asset. Individual
discount rates have been used which equate to an overall blended
discount rate of 7.0% (2021: 7.0%), which reects the rates typically
experienced in the marketplace. A 1.0% reduction in the discount rate
would result in an increase in the value of the investments recorded in
the balance sheet of approximately £4.0m (2021: £4.3m) (note 16).
Notes to the consolidated nancial statements
continued
117
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
1 Accounting policies (continued)
Critical accounting estimates and judgments (continued)
(vi) Impairment of investments in subsidiaries (judgment and estimate)
During the prior years, the value of the investment held by Galliford Try
Holdings plc in Galliford Try Limited was impaired, following an
assessment of the impact of Covid-19 on the company. This impairment
required an estimation of the value in use of this entity and its assets, using
the same key assumptions used in reviewing the goodwill and intangible
assets balances. The Company has subsequently recognised a reversal in
the impairment. Further details of this impairment are included in note 15.
(vii) Business combinations (judgment and estimate)
The acquisition of the nmcn Water Business during the year, represented
a material business combination. This required the application of both
estimates and judgments to be made by management in determining the
allocation of the purchase price against the identiable assets and
liabilities and any residual goodwill.
Exceptional items
Exceptional items are material or signicant irregular items of income
and expense which the Group believes should be disclosed in the
income statement, to assist in understanding the underlying nancial
performance achieved by the Group, by virtue of their nature or size.
Examples of items which may give rise to disclosure as exceptional items
include gains and losses on the disposal of businesses and property, plant
and equipment, signicant unanticipated losses on contracts, cost of
restructuring and reorganisation of businesses, acquisition costs and
asset impairments.
Segmental reporting
Segmental reporting is presented in the consolidated nancial statements
in respect of the Group’s business segments, which are the primary basis
of segmental reporting. The business segmental reporting reects the
Group’s management and internal reporting structure. Segmental results
include items directly attributable to the segment, as well as those that
can be allocated on a reasonable basis.
Revenue and prot
Revenue is recognised when the Group transfers control of goods
or services to customers. Revenue comprises the fair value of the
consideration received or receivable net of rebates, discounts and
value-added tax. Where consideration is subject to variability, the Group
estimates the amount receivable. Revenue recognised is constrained to
the amount which is highly probable not to result in a signicant reversal
in future periods.
Sales within the Group are eliminated. Revenue also includes the Group’s
proportion of work carried out under joint operations.
Where a modication to an existing contract occurs, the Group assesses
the nature of the modication and whether it represents a separate
performance obligation required to be satised or whether it is a
modication to the existing performance obligation.
Revenue for the Group’s continuing operations is recognised as follows:
Construction services
Revenue comprises the value of construction services transferred
to a customer during the period. The results for the period include
adjustments for the outcome of contracts, including jointly controlled
operations, executed in both the current and preceding years.
Fixed price contracts – the amount of revenue recognised is calculated
based on total costs incurred as a proportion of total estimated costs
to complete and is recognised over time. The estimated nal value
includes variations, compensation events and certain claims (contract
modications) where it is highly probable that there will not be a
signicant reversal. Provision will be made against any expected
loss as soon as it is identied.
Cost-reimbursable contracts – revenue is recognised based upon
costs incurred to date plus any agreed fee and is recognised over time.
Where contracts include a target price, consideration is given to the
impact on revenue of the mechanism for distributing any savings or
additional costs compared to the target price. Any revenue over and
above the target price is recognised once it is highly probable that there
will not be a signicant reversal. Revenue includes any variations and
compensation events where it is highly probable that there will not
be a signicant reversal.
Facilities management – management services and facilities management
contracts typically represent a single performance obligation. Revenue is
recognised over time as control passes to the customer and is typically
measured on a straight-line basis as this is considered to be a reliable
estimate of the pattern of transfer to the customer.
Recoveries from claims against third parties
The recognition of expected reimbursements resulting from certain
third-party claims is accounted for in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets. This requires recovery
to be ‘virtually certain’ before an asset can be recognised.
Government funding
Grants (including research and development expenditure credits) are
recognised when there is reasonable assurance that the Group will
comply with the conditions attaching to them and the grants will be
received. The grants are recognised in the income statement over the
periods necessary to match them with the related costs which they are
intended to compensate, on a systematic basis.
Contract costs
Incremental costs to obtain a contract are capitalised to the extent the
contract is expected to be sufciently protable for them to be recovered.
All other costs to obtain a contract are expensed as incurred. Incremental
costs to full a contract are expensed unless they relate directly to an
existing contract or specic anticipated contract, generate or enhance
resources that will be used to satisfy the obligations under the contract
and are expected to be recovered. These costs are amortised over the
shorter of the duration of the contract or the period for which revenue
and prot can be forecast with reasonable certainty. Where a contract
becomes loss making, capitalised costs in relation to that contract are
expensed immediately.
Rent receivable
Rental income represents income obtained from the rental of properties
and is credited to revenue within the income statement on a straight-line
basis, over the period of the operating lease.
Interest income and expense
Interest income and expense is recognised on a time proportion basis,
using the effective interest method.
Income tax
Current income tax is based on the taxable prot for the year.
Taxable prot differs from prot before taxation recorded in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years or that are never taxable
or deductible. The liability for current tax is calculated using rates that
have been enacted, or substantively enacted, by the balance sheet date.
Deferred income tax is provided using the balance sheet liability method,
providing for all temporary differences between the carrying amount
of assets and liabilities for nancial reporting purposes and the amounts
used for taxation purposes, with the exception of the initial recognition
of goodwill arising on an acquisition. Deferred tax is measured at the
tax rates that are expected to apply in the periods in which the timing
differences are expected to reverse, based on rates and laws that have
been enacted or substantively enacted by the balance sheet date.
A deferred tax asset is only recognised when it is more likely than
not that the asset will be recoverable in the foreseeable future out of
suitable taxable prots from which the underlying temporary differences
can be deducted.
118
Galliford Try Holdings plc
1 Accounting policies (continued)
Income tax (continued)
Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except where the timing
of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the
foreseeable future. Deferred income tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when there is an intention to settle
the balances on a net basis.
Deferred income tax is charged or credited through the income
statement, except when it relates to items charged or credited through
the statement of comprehensive income or to equity, when it is charged
or credited there.
Goodwill
Goodwill arising on consolidation represents the excess of the fair value
of the consideration given over the fair value of the net assets acquired.
It is recognised as an asset and reviewed for impairment at least annually
or when there is a triggering event, by considering the net present value
of future cash ows. For purposes of testing for impairment, the carrying
value of goodwill is compared to its recoverable amount, which is
the higher of the value in use and the fair value less costs to sell.
Any impairment is charged immediately to the income statement.
Goodwill arising on acquisitions before the date of transition to IFRS has
been retained at the previous UK GAAP amounts following impairment
tests. Goodwill written off to reserves under UK GAAP prior to 1998 has
not been restated.
Goodwill is allocated to Cash Generating Units (CGUs) for the purpose
of impairment testing. The allocation is made to those CGUs or groups
of CGUs that are expected to benet from the business combination in
which the goodwill arose.
Intangible assets
Intangible assets can include brands, customer contracts and customer
relationships acquired on acquisition of subsidiary companies, and
computer software developed by the Group. The intangible assets are
reviewed for impairment at least annually or when there is a triggering
event. Intangible assets are stated at cost less accumulated amortisation
and impairment. Cost is determined at the time of acquisition as being
directly attributable costs or, where relevant, by using an appropriate
valuation methodology.
Intangible assets are being amortised over the following periods:
(a) Customer contracts and relationships – on a straight-line basis
over up to 10 years.
(b) Computer software – once the software is fully operational,
amortisation is on a straight-line basis over up to 10 years.
Property, plant and equipment
All property, plant and equipment is stated at cost less accumulated
depreciation and impairment. Cost includes expenditure that is directly
attributable to the acquisition of the items. Land and buildings comprise
mainly ofces.
Depreciation is calculated to write off the cost of each asset to its
estimated residual value over its expected useful life. Freehold land is
not depreciated. The annual rates of depreciation on cost, applied on a
straight line basis, are as follows:
In addition to systematic depreciation, the book value of property,
plant and equipment is written down to estimated recoverable amounts
should any impairment in the respective carrying values be identied.
The asset residual values, carrying values and useful lives are reviewed
on an annual basis and adjusted if appropriate at each balance sheet date.
Repairs and maintenance expenditure is expensed as incurred, on an
accruals basis.
Joint arrangements
The Group applies IFRS 11 to all joint arrangements. Investments in joint
arrangements are classied as either joint ventures or joint operations,
depending on the contractual rights and obligations of each investor.
A joint venture is an entity over which the Group has joint control and
rights to the net assets of the entity. The Group’s interest in joint ventures
is accounted for using the equity method. Under this method the Group’s
share of prots less losses after taxation of joint ventures is included in
the consolidated income statement and its interest in their net assets is
included in investments in the consolidated balance sheet. Where the
share of losses exceeds the Group’s interest in the entity and there is no
obligation to fund these losses, the carrying amount is reduced to nil
and recognition of further losses is discontinued. Future prots are not
recognised until unrecognised losses are extinguished. Unrealised gains
on transactions with the Group’s joint ventures are eliminated to the
extent of the Group’s interest in the joint venture. Accounting policies
of joint ventures have been changed on consolidation where necessary,
to ensure consistency with policies adopted by the Group. Where joint
ventures do not adopt accounting periods that are coterminous with the
Group’s, results and net assets are based on unaudited accounts drawn
up to the Group’s accounting reference date.
A joint operation is a joint arrangement that the Group undertakes
with third parties, whereby those parties have rights to the assets and
obligations of the arrangement. The Group accounts for joint operations
by recognising its share of prots and losses in the consolidated income
statement. The Group recognises its share of associated assets and
liabilities in the consolidated balance sheet.
PPP and other investments
PPP and other investments are non-derivatives that are either
designated in this category or not classied in any of the other categories.
They are included in non-current assets unless management intends
to dispose of the assets within 12 months of the balance sheet date.
On initial recognition, the asset is recognised at cost.
The Group applies equity accounting for its investments in PPP/PFI
entities. These investments are treated as associates as the Group has
signicant inuence over them. On initial recognition, the investments
in these entities are recognised at cost, and the carrying amounts are
increased or decreased to recognise the Group’s share of the prot or
loss of the PPP/PFI entities after the date of acquisition. The Group’s share
of the investments’ prots or losses is recognised in the prot or loss net
of any impairment losses. Distributions received reduce the carrying
amount of the investments.
The debt element of the Group’s PPP/PFI entities is accounted for under
IFRS 9 ‘Financial Instruments’ with fair value movements recorded in
other comprehensive income and with recycling of gains and losses
through the income statement. We recognise tax on the movements in
other comprehensive income, where we expect the recycling to attract a
tax charge/credit to the income statement. This reects the fact that the
Group has a demonstrable track record of investing in PFI assets as part
of an overall construction procurement strategy, with a view to churning
these investments on a regular basis. Management has reviewed the
classication of PPP investments and considers that the business model
continues to be hold to collect and sell. The investments therefore
continue to be held at fair value through other comprehensive income.
Leases
The Group has applied the principles of IFRS 16 to all accounting periods
beginning on or after 1 July 2019. In accordance with IFRS 16, leases are
recognised as a right-of-use asset and a corresponding liability at the date
at which the leased asset is available for use by the Group. Each lease
payment is allocated between the liability and nance cost. The nance
cost is charged to prot or loss over the lease term at a constant periodic
rate of interest on the remaining balance of the liability. The right-of-use
asset is depreciated over the lease term on a straight-line basis, unless the
useful life of the asset is shorter than the lease term.
Notes to the consolidated nancial statements
continued
119
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
1 Accounting policies (continued)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost, using the effective interest method, less
provision for impairment. A provision for impairment of trade receivables
is established based on an expected credit loss model (general or
simplied approach, as detailed under impairment of nancial assets).
The amount of the loss is recognised in the income statement.
When a trade receivable is uncollectible, it is written off against the
impairment provision for trade receivables. Subsequent recoveries of
amounts previously written off are credited against costs in the income
statement. Short-term trade receivables do not carry any interest and
are stated at their amortised cost, as reduced by appropriate allowances
for estimated irrecoverable amounts.
Impairment of nancial assets
IFRS 9 establishes a model for recognition and measurement of
impairment in nancial assets. Loans and receivables and contract assets
apply the ‘Expected Credit Losses’ (ECL) model. All other assets are
classied and measured at fair value, with movements going through
the income statement or other comprehensive income. Expected credit
losses are recognised and measured according to one of three approaches
– a general approach (12 months ECL), a simplied approach (lifetime ECL)
or the ‘credit adjusted approach’. The Group has taken the practical
expedient to apply a simplied ‘provision matrix’ for calculating expected
losses. The provision matrix is based on an entity’s historical default
rates over the expected life of the trade receivables and is adjusted for
forward-looking estimates. For large one-off balances where there is
no historic experience, analysis is completed in respect of a number of
reasonably possible scenarios.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at
nominal value. For the purposes of the cash ow statement, cash and
cash equivalents comprise cash at bank and in hand, including bank
deposits with original maturities of three months or less. Bank overdrafts
are included for purposes of cash ow movements and the cash
ow statement.
Bank deposits with an original term of more than three months are
classied as short-term deposits where the cash can be withdrawn
on demand and the penalty for early withdrawal is not signicant.
Cash held in escrow accounts is classied as a short-term deposit
where the escrow agreement allows the balance to be converted to
cash, if replaced by a bond repayable on demand.
Trade payables
Trade payables on normal terms are not interest bearing and are stated
at their nominal value. Trade payables on extended terms are recorded at
their fair value at the date of acquisition of the asset to which they relate
and subsequently held at amortised cost. The discount to nominal value is
amortised over the period of the credit term and charged to nance costs
using the effective interest rate.
Provisions for liabilities and charges
Provisions for liabilities and charges are recognised when, as a result of
past events, the Group has a present legal or constructive obligation,
it is probable that an outow of resources will be required to settle the
obligation and the amount has been reliably estimated. Provisions are
not recognised for future operating losses.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation, using the pre-tax rate
that reects current market assessments of the time value of money and
the risks specic to the obligation. The increase in the provision due to
the passage of time is recognised as an interest expense.
Foreign currency
Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are translated at the rate of exchange ruling at the
balance sheet date. All differences are taken to the income statement.
Retirement benet obligations
For dened contribution schemes operated by the Group, amounts
payable are charged to the income statement as they accrue.
Accounting for Employee Share Ownership Plan
Own shares held by the Galliford Try Employee Share Trust (the ‘Trust’)
are included in the Group nancial Statements as a deduction from
retained earnings. The charge made to the income statement for
employee share awards and options is based on the fair value of
the award at the date of grant, spread over the performance period.
Where such shares subsequently vest to the employees under the
terms of the Group’s share option schemes or are sold, any consideration
received is included in equity.
Share-based payments
The Group operates a number of equity-settled, share-based
compensation plans. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense over
the vesting period. The total amount to be expensed over the vesting
period is determined by reference to the fair value of the options granted,
excluding the impact of any non-market vesting conditions such as growth
in earnings per share. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest.
At each balance sheet date, the Group revises its estimates of the number
of options that are expected to vest. It recognises the impact of the
revision to original estimates, if any, in the income statement, with a
corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs
are credited to share capital (nominal value) and share premium when
the options are exercised. The grant by the Company of options over its
equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution.
Dividend policy
Final dividend distribution to the Company’s shareholders is recognised
as a liability in the Group’s nancial statements in the period in
which the dividends are approved by the Company’s shareholders.
Interim dividends are recognised when paid.
Equity instruments
Equity instruments, such as ordinary share capital, issued by the
Company are recorded at the proceeds received net of directly
attributable incremental issue costs. Consideration paid for shares
in the Company held by the Trust are deducted from total equity.
Investments in subsidiaries
The Company’s investments in subsidiaries are recorded in the
Company’s balance sheet at cost less any impairment. The directors
review the investments for impairment annually.
120
Galliford Try Holdings plc
2 Segmental reporting
Segmental reporting is presented in the consolidated nancial statements in respect of the Group’s business segments, which are the primary basis of
segmental reporting. The business segmental reporting reects the Group’s management and internal reporting structure. Segmental results include
items directly attributable to the segment, as well as those that can be allocated on a reasonable basis. As the Group has no material activities outside
the UK, segment reporting is not required by geographical region.
The Chief Operating Decision-Makers (CODM) have been identied as the Group’s Chief Executive and Finance Director. The CODM review the
Group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments of the Group
to be Building, Infrastructure, PPP Investments and Central (primarily representing central overheads).
The CODM assess the performance of the operating segments based on a measure of adjusted earnings before nance costs, amortisation, exceptional
items and taxation. This measurement basis excludes the effects of non-recurring expenditure from the operating segments, such as restructuring costs
and impairments when the impairment is the result of an isolated, non-recurring event. Interest income and expenditure are included in the result for
each operating segment that is reviewed by the CODM. Other information provided to them is measured in a manner consistent with that in the
nancial statements.
Income statement
Year-ended 30 June 2022
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Revenue
789.1 441.9 6.2 – 1,237.2
Pre-exceptional operating prot/(loss) before amortisation of
intangible assets
18.9 10.8 (0.9) (10.3) 18.5
Share of post tax prots from joint ventures
– – 0.4 – 0.4
Finance income
– – 3.9 0.4 4.3
Finance costs
(0.3) (0.7) – (0.4) (1.4)
Pre-exceptional prot/(loss) before amortisation and taxation
18.6 10.1 3.4 (10.3) 21.8
Exceptional items
– (7.7) – (6.0) (13.7)
Amortisation of intangible assets
(1.0) (0.7) – (1.0) (2.7)
Prot/(loss) before taxation
17.6 1.7 3.4 (17.3) 5.4
Income tax credit
0.9
Prot for the year
6.3
Year-ended 30 June 2021
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Revenue
789.2 329.2 6.4
–1,124.8
Operating (loss)/prot before amortisation and taxation
15.9 6.0 (1.8) (10.0) 10.1
Share of post tax prots from joint ventures – –
0.5
–0.5
Finance income 3.9 0.1 4.1
–
0.1Finance costs (0.3) (0.6) (1.2)
–
(0.3)Prot/(loss) before amortisation and taxation
15.6 5.5 2.6 (10.2) 13.5
Amortisation of intangible assets –
(1.0)
–(1.1) (2.1)
Prot/(loss) before taxation
14.6 5.5 2.6 (11.3) 11.4
Income tax expense (1.0)
Prot for the year
10.4
Inter-segment revenue is eliminated from revenue above. In the year to 30 June 2022, this amounted to £38.8m (2021: £39.4m) for continuing
operations, of which £nil (2021: £nil) was in Building, £21.7m (2021: £24.7m) was in Infrastructure and £17.1m (2021: £14.7m) was in central costs.
Notes to the consolidated nancial statements
continued
121
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
2 Segmental reporting (continued)
Balance sheet
30 June 2022 Notes
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Goodwill and intangible assets
42.0 53.3 – 1.7 97.0
Working capital employed
(92.8) (139.5) 41.9 6.6 (183.8)
Net cash 18
154.9 (1.4) (9.6) 75.0 218.9
Net assets
104.1 (87.6) 32.3 83.3 132.1
Total Group liabilities
(523.3)
Total Group assets
655.4
30 June 2021
Notes
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Goodwill and intangible assets
42.9 37.2
–2.8 82.9
Working capital employed
(82.3) (132.0) 40.0 9.3 (165.0)
Net cash 18 87.0 44.6 (10.0) 94.6 216.2
Net assets 47.6 (50.2) 30.0 106.7 134.1
Total Group liabilities (restated – note 35)
(498.2)
Total Group assets (restated – note 35)
632.3
Other segmental information
Year ended 30 June 2022 Notes
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Investment in joint ventures
– – 0.3 – 0.3
Contracting revenue
789.1 441.9 – – 1,231.0
Capital expenditure – property, plant and equipment
13
0.9 3.8 – 0.4 5.1
Total depreciation 13 & 14
4.5 5.8 0.1 1.4 11.8
Share-based payments
25
0.6 0.1 0.3 1.3 2.3
Acquisition of intangible assets
1
30
– 5.8 – – 5.8
Amortisation of intangible assets
11
1.0 0.7 – 1.0 2.7
1 Acquired as part of the business combination note 30.
Year ended 30 June 2021
Notes
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Investment in joint ventures
– –
0.2
–0.2
Contracting revenue
789.2 329.2
– –
1,118.4Capital expenditure – property, plant and equipment
13 0.3 0.4 2.2
–
1.5Total depreciation
13 & 14 4.5 4.5 11.2
–
2.2Decrease in provision for receivables
17 (1.5)
– – –
(1.5)Share-based payments
25 0.2 0.1 0.1 0.6 1.0
Amortisation of intangible assets
11 1.0 2.1
– –
1.1
122
Galliford Try Holdings plc
3 Revenue
Nature of revenue streams
(i) Building and Infrastructure segments
Our Construction business operates nationwide, working with clients predominantly in the public and regulated sectors, such as health, education
and defence markets within the Building segment and road, and water markets within the Infrastructure segment (as well as private commercial
clients). Projects include the construction of assets (with services including design and build, construction only and refurbishment) in addition to the
maintenance, renewal, upgrading and managing of services across utility and infrastructure assets.
Revenue stream
Nature, timing of satisfaction of performance obligations and signicant payment terms
Fixed price
A number of projects within these segments are undertaken using xed-price contracts.
Contracts are typically accounted for as a single performance obligation. Even when a contract (or multiple combined
contracts) includes both design and build elements, they are considered to form a single performance obligation as the
two elements are not distinct in the context of the contract, given that each is highly dependent on the other.
The Group typically receives payments from the customer based on a contractual schedule of value that reects the timing
and performance of service delivery. Revenue is therefore recognised over time (the period of construction) based on an
input model (reference to costs incurred to date). Un-invoiced amounts are presented as contract assets.
Management does not expect a nancing component to exist.
Cost-reimbursable
A number of projects within these segments are undertaken using open-book/cost-reimbursable (possibly with a pain/gain
share mechanism) contracts.
Contracts are typically accounted for as a single performance obligation, with the majority of these contracts including a
build phase only.
The Group typically receives payments from the customer based on actual costs incurred. Revenue is therefore recognised
over time (the period of construction) based on an input model (reference to costs incurred to date). Un-invoiced amounts
are presented as contract assets.
Management does not expect a nancing component to exist.
Facilities management
*
Contracts undertaken within the Building segment that provide full life-cycle solutions to clients, are accounted for as a
single performance obligation, with revenue recognised over time and typically on a straight-line basis.
* Facilities management represents around 5% of the total Building segment turnover.
(ii) Investments segment
Our Investments business specialises in managing construction through to operations for major building projects through public private
partnerships and co-development opportunities. The business leads bid consortia and arranges nance, as well as making debt and equity
investments (which are recycled).
Revenue stream
Nature, timing of satisfaction of performance obligations and signicant payment terms
PPP Investments
The Group has investments in a number of PPP Special Purpose Vehicles (SPVs), delivering major building and
infrastructure projects.
The business additionally provides management services to the SPVs under Management Service Agreements (MSA).
Revenue for these services is typically recognised over time as and when the service is delivered to the customer.
Revenue for reaching project nancial close (such as success fees) is recognised at a point in time, at nancial close
(when control is deemed to pass to the customer).
Disaggregation of revenue
The Group considers the split of revenue by operating segment to be the most appropriate disaggregation. All revenue has been derived from
performance obligations settled over time.
Revenue on existing contracts, where performance obligations are unsatised or partially unsatised at the balance sheet date, is expected to be
recognised as follows:
Revenue – year ended 30 June 2022
2023
£m
2024
£m
2025
onwards
£m
Total
£m
Building
526.4 111.6 33.2 671.2
Infrastructure
295.2 134.5 142.4 572.1
Total Construction
821.6 246.1 175.6 1,243.3
PPP Investments
2.8 2.7 25.7 31.2
Total transaction price allocated to performance obligations yet to be satised
824.4 248.8 201.3 1,274.5
Notes to the consolidated nancial statements
continued
123
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
3 Revenue (continued)
Disaggregation of revenue (continued)
Revenue – year ended 30 June 2021
2022
£m
2023
£m
2024
onwards
£m
Total
£m
Building
550.5 117.1 4.7 672.3
Infrastructure
239.3 72.8 14.4 326.5
Total Construction
789.8 189.9 19.1 998.8
PPP Investments 1.8 1.8 24.4 28.0
Total transaction price allocated to performance obligations yet to be satised
791.6 191.7 43.5 1,026.8
Any element of variable consideration is estimated at a value that is highly probable not to result in a signicant reversal in the cumulative
revenue recognised.
4 Exceptional items
2022
£m
2021
£m
Acquisition and integration related costs
1
– cost of sales
5.8
–Acquisition and integration related costs
1
– administrative expenses
1.9
–Implementation costs of cloud based arrangements
2
– administrative expenses
6.0
–Total
13.7
–
There were no exceptional items in the prior year. The items in respect of the current year are as follows:
1 The Group acquired the Water business of nmcn plc (in administration) on 7 October 2021 and incurred acquisition and integration related costs of £7.7m. This is
predominantly made up of legal and professional fees, integration and restructuring costs recognised in administrative expenses, and specic staff costs incurred during
the period of site closures following nmcn plc entering administration that are recognised in cost of sales.
2 The Group incurred £6.0m of customisation and conguration costs associated with the move to Oracle Fusion, a cloud-based computing arrangement, during the period.
Taking into account the IFRIC Agenda Decision issued by the IFRS IC in March 2021, the Group has analysed the costs and concluded that these costs should be expensed
in the period. In accordance with the Group’s existing accounting policy, management considers that the costs should be separately disclosed as exceptional because they
are signicant and irregular.
An associated tax credit of £2.6m has been recognised.
5 Employees and directors
Employee benet expense during the year
Notes
Group Company
2022
£m
2021
£m
2022
£m
2021
£m
Wages and salaries
171.5
–133.5
–Social security costs
21.3
–15.0
–Other pension costs
17.7
14.3–
–
Share-based payments
25
–2.3
1.0–
Restructure costs
0.2
–1.5
–Total
213.0
165.3–
–
All employees are entitled to join the Galliford Try Pension Scheme, a dened contribution scheme established as a stakeholder plan, with a Company
contribution based on a scale dependent on the employee’s age and the amount they choose to contribute. Since 1 July 2013, all non-participating
and newly-employed staff have been auto-enrolled into the separate stakeholder plan and are entitled to increase their contribution rates in line with
existing members. Since 1 April 2009, the Group has operated a pension salary sacrice scheme, which means that all employee pension contributions
are paid as employer contributions on their behalf.
All pension costs in the current and prior years were in respect of the Group’s dened contribution schemes. Of the total charge, £8.3m (2021: £7.6m)
and £9.4m (2021: £6.7m) were included, respectively, within cost of sales and administrative expenses.
124
Galliford Try Holdings plc
5 Employees and directors (continued)
Average monthly number of people (including Executive and non-executive directors) employed
Group Company
2022
Number
2021
Number
2022
Number
2021
Number
By business:
– Building
1,265
–1,356
–– Infrastructure
1,751
–1,060
–Construction
3,016
–2,416
–PPP Investments
73
79–
–
Central
165
1676
6Total
3,254
2,6626
6Remuneration of key management personnel
The key management personnel comprise the Executive Board and non-executive directors. The remuneration of the key management personnel
of the Group is set out below in aggregate for each of the categories specied in IAS 24, Related Party Disclosures. Further information about
the remuneration of individual directors, including any interests in the Company’s shares, is provided in the audited part of the Directors’
remuneration report.
2022
£m
2021
£m
Salaries and short-term employee benets
3.4
3.4
Retirement benet costs
0.3
0.2
Share-based payments
2.0
0.9
Total
5.7
4.56 Net nance income
Group
2022
£m
2021
£m
Interest receivable on bank deposits
0.4
0.1
Interest receivable from PPP Investments and joint ventures
3.9
3.9
Other interest receivable
–
0.1
Finance income
4.3
4.1Other (including interest on lease liabilities)
(1.4)
(1.2)
Finance costs
(1.4)
(1.2)Net nance income
2.9
2.9
7 Prot before income tax
The following items have been included in arriving at prot before income tax:
Notes
2022
£m
2021
£m
Employee benet expense
5
213.0
165.3Total depreciation 13 & 14
11.8
11.2Amortisation of intangible assets
11
2.7
2.1Repairs and maintenance expenditure on property, plant and equipment
0.7
0.8
Decrease in provision for receivables
17
–
(1.5)Exceptional items 4
(13.7)
–
In addition to the above, the Group incurs other costs classied as cost of sales relating to labour, materials and subcontractors’ costs.
Notes to the consolidated nancial statements
continued
125
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
7 Prot before income tax (continued)
Services provided by the Group’s auditor and network rms
During the year, the Group obtained the following services from the Group’s auditor at costs as detailed below:
2022
£m
2021
£m
Fees payable to the Company’s auditor for the audit of Parent Company and consolidated nancial statements
0.2
0.2
Fees payable to the Company’s auditor for other services:
The audit of nancial statements of the Company’s subsidiaries
0.8
0.5
Audit-related assurance services
0.1
0.1
Total other services
0.9
0.6
Total 1.1
0.8
A description of the work of the Audit Committee in respect of the auditor’s independence is set out in the Governance report.
8 Income tax charge
Group
Notes
2022
£m
2021
£m
Analysis of expense in year
Current year’s income tax
Current tax
(1.6)
0.5
Deferred tax
1
22
0.5
5.0Adjustments in respect of prior years
Current tax
0.8
(4.8)
Deferred tax 22
(0.6)
0.3Income tax (credit)/expense
(0.9)
1.0Tax on items recognised in other comprehensive income
Tax recognised in other comprehensive income
–
–Total taxation (0.9)
1.0
1 Includes impact of change in rate of tax.
The total income tax credit for the year of £0.9m (2021: £1.0m) is lower (2021: lower) than the blended standard rate of corporation tax in the UK of
19.0% (2021: 19.0%). The differences are explained below:
2022
£m
2021
£m
Prot before income tax
5.4
11.4
Prot before income tax multiplied by the blended standard corporation tax rate in the UK of 19.0% (2021: 19.0%)
1.0
2.2
Effects of:
Expenses not deductible for tax purposes
0.4
0.7
Non-taxable income
(0.1)
(1.1)
Adjustments in respect of prior years
1
0.2
(4.5)
Change in tax rates
(0.4)
(2.1)
Net (recognition and utilisation)/restriction of tax losses
2
(2.1)
5.8
Other
0.1
–
Income tax (credit)/charge
(0.9)
1.0
1 The adjustments in respect of prior years’ £0.2m (2021: £(4.5)m) reect changes to the estimates made in the previous years’ Annual Report and Accounts and the nalised
tax computations submitted to HMRC. The June 2021 adjustment of £(4.5)m incorporates, and principally relates to, the nalisation of certain tax estimates made
following the demerger of the Group’s housebuilding divisions in January 2020.
2 The net recognition and utilisation of tax losses of £2.1m (2021: restriction £5.8m) reects the utilisation of £nil (2021: £1.5m) tax losses in the year and the recognition of
£2.1m (2021: restriction of £7.3m) tax losses in line with the Group’s accounting policy (note 22).
these contracts in prior years and paid the associated corporation tax. On nalisation of the contracts, an overall loss was made, and the Group sought to recover the
associated corporation tax in the form of a refund (as at 30 June 2020), and subsequently in the form of tax losses (as at 30 June 2021) restricted in accordance with the
Group’s accounting policy.
In the Spring Budget 2021, the UK Government announced that from 1 April 2023, the corporation tax rate would increase from 19% to 25%. This new
law was substantively enacted in the Finance Bill 2021 and received Royal Assent on 10 June 2021. Where appropriate, deferred taxes at the balance
sheet date have been measured using the appropriate tax rates (based on when the underlying balance is expected to crystallise) and reected in these
nancial statements.
The Group has assessed that a deferred tax asset equal to the value of unutilised tax credits expected to be utilised over the next three nancial years
is appropriate, as, based on the already secured work for that timeframe, management have assessed it is probable that the Group will have sufcient
taxable prots to enable the deferred tax asset to be recovered. Any remaining unutilised tax credits have not been recognised (note 22).
126
Galliford Try Holdings plc
9 Dividends
Group and Company
2022
2021
£m
pence
per share
£m
pence
per share
Previous year nal –
3.9 3.5
–Current year interim
2.4 2.2
1.3 1.2
Dividend recognised in the year
6.3 5.7
1.3 1.2
The following dividends were declared by the Company in respect of each accounting period presented:
2022
2021
£m
pence
per share
£m
pence
per share
Interim
2.4 2.2
1.3 1.2
Final
6.4 5.8
3.9 3.5
Dividend relating to the year
8.8 8.0
5.2 4.7
The directors are proposing a nal dividend in respect of the nancial year ended 30 June 2022 of 5.8 pence per share (2021: 3.5 pence per share),
bringing the total dividend in respect of 2022 to 8.0 pence per share (2021: 4.7p pence per share). The nal dividend will absorb approximately £6.4m of
equity. Subject to shareholders’ approval at the AGM to be held on 11 November 2022, the dividend will be paid on 9 December 2022 to shareholders
who are on the register of members at the close of business on 11 November 2022.
10 Earnings per share
Basic and diluted earnings/(losses) per share (EPS)
Basic EPS is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding
during the year, excluding those held by the Trust, which are treated as cancelled.
Under normal circumstances, the average number of shares is diluted by reference to the average number of potential ordinary shares held under
option in the year. The dilutive effect amounts to the number of ordinary shares which would be purchased using the aggregate difference in value
between the market value of shares and the share option price. Only shares that have met their cumulative performance criteria are included in the
dilution calculation. The Group has two classes of potentially dilutive ordinary shares: those share options granted to employees where the exercise
price is less than the average market price of the Company’s ordinary shares during the year and the contingently issuable shares under the Group’s
long-term incentive plans. A loss per share cannot be reduced through dilution, hence this dilution is only applied where the Group has reported a prot.
The earnings and weighted average number of shares used in the calculations are set out below.
2022
2021
Earnings
£m
Weighted
average
number of
shares
Per share
amount
pence
Earnings
£m
Weighted
average
number of
shares
Per share
amount
pence
Continuing operations
Basic EPS – pre-exceptional
Earnings attributable to ordinary shareholders
pre-exceptional items
17.4 109,016,667 16.0
10.4 109,976,145 9.5
Basic EPS
Earnings attributable to ordinary shareholders
post-exceptional items
6.3 109,016,667 5.8
10.4 109,976,145 9.5
Effect of dilutive securities:
Options 3,804,698 n/a
n/a
n/a6,627,132
n/aDiluted EPS – pre-exceptional
17.4 115,643,799 15.0
10.4 113,780,843 9.1
Diluted EPS
6.3 115,643,799 5.5
10.4 113,780,843 9.1
Total operations
Basic EPS – pre-exceptional
Earnings attributable to ordinary shareholders
pre-exceptional items
17.4 109,016,667 16.0
7.7 109,976,145 7.0
Basic EPS
Earnings attributable to ordinary shareholders
post-exceptional items
6.3 109,016,667 5.8
7.7 109,976,145 7.0
Effect of dilutive securities:
Options 3,804,698 n/a
n/a
n/a6,627,132
n/aDiluted EPS – pre-exceptional
17.4 115,643,799 15.0
7.7 113,780,843 6.8
Diluted EPS
6.3 115,643,799 5.5
7.7 113,780,843 6.8
The discontinued operations earnings per share for the year was nil (2021: loss per share of 2.5 pence per share) and the discontinued operations
diluted earnings per share for the year was nil (2021: loss per share of 2.3p).
Notes to the consolidated nancial statements
continued
127
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
11 Intangible assets
Group
Notes
Customer
contracts and
relationships
£m
Computer
software
£m
Total
£m
Cost
At 1 July 2020 and 30 June 2021
12.2 10.9 23.1
Additions 30
5.2 0.6 5.8
At 30 June 2022 17.4 11.5 28.9
Accumulated amortisation
At 1 July 2020
(8.2) (7.1) (15.3)
Amortisation in year
(1.0) (1.1) (2.1)
At 1 July 2021
(9.2) (8.2) (17.4)
Amortisation in year
(1.5) (1.2) (2.7)
At 30 June 2022 (10.7) (9.4) (20.1)
Net book amount
At 30 June 2022 6.7 2.1 8.8
At 30 June 2021
3.0 2.7 5.7
At 30 June 2020
4.0 3.8 7.8
All amortisation charges in the year have been included in administrative expenses. Computer software relates to the Group’s reporting systems.
The remaining period of amortisation on computer software ranges from one year and six months to two years and three months . The remaining period
of amortisation on customer contracts and relationships ranges between two and nine years.
12 Goodwill
Group
Notes £m
Cost
At 30 June 2020 and 30 June 2021
77.2
Addition 30 11.0
Disposal
–
At 30 June 2022 88.2
Aggregate impairment at 30 June 2020 and 30 June 2021 –
At 30 June 2020 and 30 June 2022 –
Net book amount
At 30 June 2022 88.2
At 30 June 2021
77.2
At 30 June 2020
77.2
Goodwill is allocated to the Group’s CGUs identied according to business segment. The goodwill is attributable to the following business segments:
2022
£m
2021
£m
Building
40.0
40.0
Infrastructure
48.2
37.2
88.2
77.2
Impairment review of goodwill and key assumptions
Goodwill is tested for impairment at least annually. The recoverable amount of a CGU is determined based on value in use calculations. These
calculations use pre-tax cash ow projections based on future nancial budgets approved by the Board, based on past performance and its expectation
of market developments. The key assumptions within these budgets relate to revenue and the future prot margin achievable, in line with our strategy
and targets as set out in the Strategic report. Future budgeted revenue is based on management’s knowledge of actual results from prior years and
latest forecasts for the current year, along with the existing secured works and management’s expectation of the future level of work available within
the market sector. In establishing future prot margins, the margins currently being achieved are considered in conjunction with expected ination
rates in each revenue and cost category. In Building and Infrastructure, the margins currently being achieved are expected to increase in line with the
strategy set out in the Strategic report.
Cash is monitored very closely on a daily, weekly and monthly basis for the purposes of managing both treasury and the business as a whole. Details
of the Group’s treasury management are included within the Financial review in the Strategic report of the Annual Report. The assumptions used are
reviewed regularly and differences between forecast and actual results are closely monitored, with variances being investigated fully. The knowledge
gained from this past experience is used to ensure that the future assumptions used are consistent with past actual outcomes and are management’s
best estimate of the future cash ows of each business unit.
128
Galliford Try Holdings plc
12 Goodwill (continued)
Impairment review of goodwill and key assumptions (continued)
Cash ows beyond the budgeted three-year period are extrapolated using an estimated growth rate within each segment. The growth rate used is
the Group’s estimate of the average long-term growth rate for the market sectors in which the CGU operates. Furthermore, sensitivity analysis has
been undertaken on each goodwill impairment review, by changing the discount rates, prot margins, growth rates and other variables applicable to
each CGU, and the results are noted below.
The pre-tax discount rates for each CGU are noted below.
Building CGU
A pre-tax discount rate of 13.1% (2021: 15.8%) in Building has been applied to the future cash ows, based on an estimate of the weighted average cost
of capital (WACC) of that division.
A long-term growth rate of 2.0% per annum has been applied to the budgeted cash ows (reecting the Board-approved budget operating margins
and working capital cash ows) into perpetuity and these assumptions result in the recoverable value of this CGU being signicantly in excess of the
carrying value of the CGU assets.
The Building CGU is not sensitive to changes in key assumptions and management does not consider that any reasonable possible change in any
single assumption would give rise to an impairment of the carrying value of goodwill and intangibles.
Infrastructure CGU
A pre-tax discount rate of 12.7% (2021: 15.7%) in Infrastructure has been applied to the future cash ows, based on an estimate of the weighted
average cost of capital of that division.
A long-term growth rate of 2.0% per annum has been applied to the budgeted cash ows (reecting the Board-approved budget operating margins
and working capital cashows) into perpetuity and these assumptions result in the recoverable value of this CGU being signicantly in excess of the
carrying value of the CGU assets.
The Infrastructure CGU is not sensitive to changes in key assumptions and management does not consider that any reasonable possible change in
any single assumption would give rise to an impairment of the carrying value of goodwill and intangibles.
13 Property, plant and equipment
Group
Land and
buildings
£m
Plant and
machinery
£m
Fixtures and
ttings
£m
Total
£m
Cost
At 1 July 2020
0.5 2.1 13.4 16.0
Additions 0.6 1.1 0.5 2.2
Disposals (4.5) (4.6)
–
(0.1)At 1 July 2021
1.1 3.1 9.4 13.6
Additions
1.7 1.9 1.5 5.1
Disposals
– (1.8) (0.4) (2.2)
At 30 June 2022 2.8 3.2 10.5 16.5
Accumulated depreciation
At 1 July 2020
(0.3) (1.0) (10.9) (12.2)
Charge for the year
(0.1) (0.2) (1.3) (1.6)
Disposals 4.5 4.6
–
0.1At 1 July 2021
(0.4) (1.1) (7.7) (9.2)
Charge for the year
(0.1) (0.2) (1.1) (1.4)
Disposals
– 0.8 0.4 1.2
At 30 June 2022 (0.5) (0.5) (8.4) (9.4)
Net book amount
At 30 June 2022 2.3 2.7 2.1 7.1
At 30 June 2021
0.7 2.0 1.7 4.4
At 30 June 2020
0.2 1.1 2.5 3.8
There has been no impairment of property, plant and equipment during the year (2021: £nil).
The Company has no property, plant or equipment.
Notes to the consolidated nancial statements
continued
129
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
14 Leases
This note provides information for leases where the Group is a lessee.
The Company holds no leases.
Right-of-use assets
Cost
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
Total
£m
At 1 July 2020
11.0 7.8 12.5 31.3
Additions 0.2 2.4 5.4 8.0
Disposals (1.2) (3.1) (1.5) (5.8)
At 1 July 2021
10.0 7.1 16.4 33.5
Additions
5.3 2.7 7.4 15.4
Disposals
(2.7) (1.1) (2.2) (6.0)
At 30 June 2022 12.6 8.7 21.6 42.9
Accumulated depreciation
At 1 July 2020
(2.6) (2.1) (3.8) (8.5)
Charge for the year
(2.4) (2.5) (4.7) (9.6)
Disposals 0.8 1.9 1.4 4.1
At 1 July 2021
(4.2) (2.7) (7.1) (14.0)
Charge for the year
(2.2) (2.8) (5.4) (10.4)
Disposals
2.7 1.1 2.2 6.0
At 30 June 2022 (3.7) (4.4) (10.3) (18.4)
Net book amount
At 30 June 2022 8.9 4.3 11.3 24.5
At 30 June 2021
5.8 4.4 9.3 19.5
At 30 June 2020
8.4 5.7 8.7 22.8
Lease liabilities
2022
£m
2021
£m
Current
9.9
7.3
Non-current
14.9
11.9
Total lease liabilities
24.8
19.2
The statement of prot or loss shows the following amounts relating to leases for continuing operations:
2022
£m
2021
£m
Depreciation of right-of-use assets
10.4
9.6
Interest expense (included in nance cost)
1.0
0.9
Expense relating to short-term leases (included in cost of goods sold and administrative expenses)
9.6
7.9
Expense relating to leases of low-value assets that are not shown above as short-term leases
(included in administrative expenses)
0.1
0.5
Total expenses 21.1
18.9
The total cash outow for leases in the year to 30 June 2022 was £11.2m, of which £1.0m was included in net interest expense – note 6 (2021: £11.4m
and £0.9m respectively).
130
Galliford Try Holdings plc
14 Leases (continued)
Lease liabilities (continued)
Maturity of contractual undiscounted future lease payments:
As at 30 June 2022
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
Total
£m
Less than 1 year
2.3 2.5 5.2 10.0
Between 1 and 5 years
6.4 1.3 7.0 14.7
More than 5 years
7.8 – – 7.8
Total
16.5 3.8 12.2 32.5
As at 30 June 2021
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
Total
£m
Less than 1 year
1.7 2.0 4.3 8.0
Between 1 and 5 years
2.9 1.8 5.8 10.5
More than 5 years –
5.4
–5.4
Total 10.0 3.8 10.1 23.9
15 Investments in subsidiaries
Company
2022
£m
2021
£m
Cost
As at 1 July 2021 and 2020
287.7
287.7
Additions
0.3
–
At 30 June 288.0
287.7
Aggregate impairment
As at 1 July 2021 and 2020
(113.8)
(146.5)
Reversal of impairment/(impairment)
13.8
32.7
At 30 June 100.0
(113.8)
Net book value
At 30 June 188.0
173.9
The carrying value of investments was reviewed and a partial reversal of £13.8m (2021: £32.7m) was recorded, determined from value in use
calculations based on the same assumptions as those disclosed in note 12.
The subsidiary undertakings that principally affected prots and net assets of the Group were:
Galliford Try Construction Limited
Galliford Try Infrastructure Limited
1
Galliford Try Investments Limited
Galliford Try Services Limited
Galliford Try Limited
2
1 Incorporated in Scotland.
2 Shares of these subsidiary companies are owned directly by the Company.
Unless otherwise stated, each subsidiary has a 30 June year-end, operates as a construction company, is incorporated in England & Wales and 100%
of ordinary shares and voting rights are held by the Group. Galliford Try Services Limited operates as central administration company to the Group.
A full list of the Group’s undertakings is set out in note 33.
Notes to the consolidated nancial statements
continued
131
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
16 PPP and other investments
Group
2022
£m
2021
£m
At 1 July
49.1
40.7
Additions
–
1.9Disposals and subordinated loan repayments
(0.7)
(1.0)
Movement in fair value
(0.9)
7.5
At 30 June 47.5
49.1
These comprise PPP/PFI investments and investments in other listed securities.
None of the nancial assets are past their due dates (2021: £nil), and the directors expect an average maturity prole of around 10 years. Further
disclosures relating to nancial assets are set out in note 23.
The expected credit loss (ECL) was assessed to be minimal and accordingly no ECL recognised.
During the year, there were no additions (2021: £1.9m) to the Group’s PPP/PFI investments, subordinated loans of £0.5m (2021: £0.5m) were
repaid and the Group disposed of interests held at £0.2m (2021: £0.5m), generating a prot on disposal of £nil (2021: £nil). Of the total fair value
movement in the year of £0.9m, all of it relates to the movement in the fair value of the PPP investments (2021: total of £7.5m, of which £7.3m relates
to PPP investments and has been recorded in equity whilst £0.2m relates to the residual Vistry Group plc shares held and has been recorded in the
income statement).
The Group has commitments of £nil (2021: £nil) to provide further subordinated debt to its investments.
This portfolio equates to a blended discount rate of 7.0% (2021: 7.0%). A reduction of 1.0% would result in an increase in the fair value of approximately
£4.0m (2021: £4.3m).
Our share of PPP and other investments’ external bank funding was £257.2m at 30 June 2022 (2021: £267.7m). Our share of these entities’ other
external funding consists of £64.1m (2021: £64.1m) of listed bonds. These balances are non-recourse to the Group.
The information disclosed reects the amounts presented in the nancial statements or management accounts of the relevant joint ventures and
associates and not the Group’s share of those amounts. The Group holds investments in both debt and equity within a number of entities over which
it has signicant inuence. Predominantly all of the value that the Group recognises relates to the debt instruments (representing over 99% of the
PPP and other investments portfolio) which have been fair valued within the PPP and other investments portfolio. Consequently, the material
1
joint
ventures (in which the Group also holds debt investments either directly or indirectly) are disclosed within this note.
Income statement – extracts
Aberdeen Roads
(Finance) Plc
Aberdeen Roads Limited
2022
£m
2021
£m
2022
£m
2021
£m
Revenue
–
–9.4
64.6
Depreciation and amortisation
–
–
––
Finance income
24.7
25.429.6
31.1Finance expense
(24.7)
(25.4)(24.7)
(25.4)Income tax expense
–
–
––
Prot (100%)
–
––
–Other comprehensive income
4.6
2.4–
–
Total comprehensive income (100%)
4.6
–2.4
–Group’s share of prot and total comprehensive income
1.5
–0.8
–Dividends received by the Group during the year
–
––
–Balance sheet – extracts
Cash and cash equivalents
0.2
0.2
29.928.0
Other current assets
–
–3.8
5.1
Current assets
0.2
0.2
33.733.1
Non-current assets
548.4
562.7
544.5556.2
Current external borrowings – bank/listed bonds
(19.1)
–(18.6)
–Other current liabilities
(6.5)
(5.5)
(30.6)(26.6)
Current liabilities
(25.6)
(24.1)
(30.6)(26.6)
Non-current external borrowings – bank/listed bonds
(474.8)
–(489.0)
–Other non-current liabilities
(47.2)
(53.4)
(547.6)(562.7)
Non-current liabilities
(522.0)
(542.4)
(547.6)(562.7)
Net assets/(liabilities) (100%)
1.0
–(3.6)
–1 Material due to their holdings and/or issuing listed debt.
Details of related party transactions with joint ventures are given in note 29. The Group’s shareholding in each joint venture can be seen in note 33.
132
Galliford Try Holdings plc
17 Trade and other receivables
Notes
Group
2022
£m
2021
(restated
– note 35)
£m
Amounts falling due within one year:
Trade receivables
46.0
48.5
Less: provision for impairment of receivables
(0.1)
(0.1)
Trade receivables – net
45.9
48.4
Contract assets
1
21
173.4
156.0Amounts due from joint ventures
1.1
6.1
Research and development expenditure credits
4.5
4.5
Other receivables
4.7
12.8
Prepayments
13.4
13.6
243.0
241.4
1 Contract assets of £173.4m at 30 June 2022 (2021: £156.0m) is stated net of a life-time expected credit loss allowance of £14.0m (2021: £14.0m).
The Company has no trade and other receivables.
Retentions will be collected in the normal operating cycle of the Group and are therefore shown as a current asset. It is expected that £33.6m
(2021: £30.6m) will be collected within 12 months from the balance sheet date.
The Group has no signicant capitalised contract costs.
As previously disclosed, the Group provided services in respect of three contracts with entities owned by a major infrastructure fund of a blue-chip
listed company. Costs were signicantly impacted by client-driven scope changes and the Group has submitted claims to the value of £95m in respect
of these costs. Our work on these contracts formally ceased on their termination in August 2018. The Group has taken extensive advice on our
entitlement and we have been successful in two adjudications supporting the validity of the Group’s position. The claim is progressing in line with the
original expected timetable.
Taking into account the requirements of IFRS 15, the Group had constrained the revenue recognised in prior periods to the extent that it was highly
probable not to result in a signicant reversal in the future. While the Group has submitted a total claim value of £95m in respect of these costs within
the Statement of Case, revenue has been constrained. We have constrained the revenue to a percentage recoverable that is lower than that successfully
recovered from the adjudications and variations previously agreed on this contract. The underlying principle supporting the validity and recovery of the
claims and variations is not considered to be impacted by the passage of time, which is driven by the nature of dispute resolution in this sector. Given the
progress, in line with expectations during the year, this is unchanged. It is possible that the process of the arbitration may not be concluded within the
coming nancial year.
Whilst the entities are owned by a major infrastructure fund of a blue-chip listed company, and we expect that the amounts will be repaid, we have
assessed any expected credit loss provision in accordance with IFRS 9 to take into account their investment structure. Our assessment of the credit
worthiness of the underlying contracting entities includes reviewing their latest audited nancial statements to 31 December 2020 (as well as their
immediate parent and investor whose latest led nancial statements are to 31 December 2021), for which the audit opinion includes a disclaimer of
opinion in relation to material uncertainties in respect of claims and the potential impact on going concern. The Group does not consider there to be a
change in credit risk over the course of the year to 30 June 2022 and consequently, there has been no material change to the expected credit loss
provision since the prior year. The expected credit loss provision (among our overall portfolio of contracts) is discussed further in note 1 Critical
accounting estimates and judgments.
There has been no change to our assessment of the constrained revenue under IFRS 15 or the expected credit loss under IFRS 9 in the year to 30 June
2022. The Group continues to vigorously defend the counterclaims made by the counterparty, that we consider are without merit, and as such no
amounts have been provided on the basis the Group considers the possibility of an outow of resources to be remote.
Movements on the Group provision for impairment of trade receivable were as follows:
2022
£m
2021
£m
At 1 July
(0.1)
(1.6)
Decrease in provision for receivables impairment
–
1.5
At 30 June (0.1)
(0.1)
Provisions for impaired receivables have been included in cost of sales and administrative expenses in the income statement. Amounts charged to the
impairment provision are generally written off when there is no expectation of recovering additional cash.
The other classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the book value of each class of receivable mentioned above, along with the Group’s cash
and cash equivalents. The Group does not hold any collateral as security.
Management believes that the concentration of credit risk with respect to trade receivables is limited, due to the Group’s customer base being large,
unrelated and predominantly within the public sector. Major water industry customers accounted for in total 15% (2021: 8%) of Group revenue in the
year. However, the customers involved comprise a variety of entities, including those both in the public and commercial sectors. In addition, within the
commercial sector each customer has an unrelated ultimate parent company.
As of 30 June 2022, trade receivables of £13.7m (2021: £15.2m) were past due but not impaired.
Notes to the consolidated nancial statements
continued
133
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
17 Trade and other receivables (continued)
These relate to a number of independent customers for whom there is no recent history of default and there are no indications that they will not meet
their payment obligations in respect of the trade receivables recognised in the balance sheet that are past due and unprovided. The ageing analysis of
these trade receivables is as follows:
2022
£m
2021
£m
Number of days past due date
Less than 30 days
4.4
1.5
Between 30 and 60 days
1.3
3.7
Between 60 and 90 days
0.9
0.7
Between 90 and 120 days
1.3
0.3
Greater than 120 days
5.8
9.0
13.7
15.2
As of 30 June 2022, trade receivables were considered for impairment based on management’s judgment and review of the trade receivables listings.
The amount provided for these balances was £0.1m (2021: £0.1m). The allocation of the provision is as follows:
2022
£m
2021
£m
Number of days past due date:
Greater than 120 days
0.1
0.1
0.1
0.1
18 Cash and cash equivalents
Group Company
2022
£m
2021
£m
2022
£m
2021
£m
Cash at bank and in hand and per the statement of cash ows
218.9
216.2
109.4100.7
Cash at bank above includes £22.7m (2021: £16.9m), being the Group’s share of cash held by jointly controlled operations. The effective interest rate
received on cash balances is 0.3% (2021: 0.1%). The Group has no bank borrowings or loans.
Net cash excludes IFRS 16 lease liabilities (note 14).
Cash and cash equivalents and bank overdrafts are presented on a net (offset) basis. In 2016, the IFRS Interpretations Committee released an update
in respect of IAS 32 ‘Financial instruments: presentation’ specically in relation to offsetting and cash pooling. This claried that in order to offset bank
account balances, an entity must have both a legally enforceable right and an intention to do so. The Group’s bank arrangements and facilities with both
HSBC Bank plc and Barclays Bank plc provide the legally enforceable right to offset and the Group demonstrated its intention to offset by formally
sweeping the balances. Consequently, the balances have been offset in the nancial statements.
19 Trade and other payables
Notes
Group
2022
£m
2021
(restated
– note 35)
£m
Trade payables
102.3
90.9
Contract liabilities
21
104.4
92.7Other taxation and social security payable
29.9
30.5
Other payables
1.6
1.2
Accruals
232.9
238.7
471.1
454.0
The Company has no trade and other payables.
All payables are unsecured. Retentions will be paid in the normal operating cycle of the Group and are therefore shown as a current liability.
The undiscounted future cash ows of non-derivative nancial liabilities are £336.8m (2021: £330.8m) and these are expected to be settled within
one year of the balance sheet date.
134
Galliford Try Holdings plc
20 Provisions for other liabilities and charges
Group
Discontinued
operations
Onerous
contracts
Rectication
Total
£m
At 1 July 2020 (as previously reported) –
(24.0)
–(24.0)
At 1 July 2020 (restated)
1
(24.0) (1.0) (14.3)
(39.3)
Utilised 24.0 1.0 3.1
28.1
Additions (13.0)
–
(0.8)(13.8)
At 30 June 2021 (restated)
1
–
(0.8) (24.2)
(25.0)
Utilised 3.7
–
10.213.9
Additions
2
–
(14.0) (2.3)
(16.3)
At 30 June 2022
–
(27.4)(4.6) (22.8)
1 The provisions balance has been restated, reecting a reclassication between accruals and provisions of £25.0m as at 30 June 2021 (1 July 2020: £15.3m), with no impact
to any other balance reported at the balance sheet date. Onerous contract and rectication provisions were previously reported within accruals but should have been
presented as provisions (see note 35).
2 Additions include £13.7m acquired as part of business combinations (note 30).
Onerous contract provisions are made on loss-making contracts the Group is obliged to complete.
Rectication provisions are made for potential claims and defects for remedial works against work completed by the Group.
The discontinued operations resulted from the working capital adjustment agreed in respect of the disposal of the housebuilding divisions. This was fully
settled in the year to 30 June 2021.
As at 30 June 2022 £21.6m of provision related to three loss making contracts. Management’s best estimate of the range of outcomes on these two
contracts is between £10.7m and £24m. The remaining £5.8m of the provision for loss making contracts to relates to a high number of immaterial
balances. Due to the level of uncertainty, combination of cost and income variables and timing across the remaining portfolio of contracts, it is
impracticable to provide a quantitative analysis of the aggregated judgements that are applied at a portfolio level and therefore management have
not given a range of expected outcomes.
Due to the nature of the provisions, the timing of any potential future outows is uncertain, however they are expected to be utilised within the Group’s
normal operating cycle, and accordingly are classied as current liabilities. Of the total provisions, £18.8m (2021: £17.8m) is likely to be utilised in 1-3
years with the remainder utilised within 12 months.
The Company does not hold any provisions.
21 Contract balances
Contract assets and liabilities are included within “trade and other receivables” and “trade and other payables” respectively on the face of the
balance sheet. Where there is a corresponding contract asset and liability in relation to the same contract, the balance shown is the net position.
The timing of work performed (and thus revenue recognised), billing proles and cash collection results in trade receivables (amounts billed to
date and unpaid), contract assets (unbilled amounts where revenue has been recognised) and customer advances and deposits (contract liabilities),
where no corresponding work has yet to be performed, being recognised on the Group’s balance sheet.
The reconciliation of the Group opening to closing contract balances is shown below:
2022
2021
(restated – note 35)
Contract
asset
£m
Contract
liability
£m
Contract
asset
£m
Contract
liability
£m
At 30 June 2021
156.0 (92.7)
172.0 (112.3)
Revenue recognised in the year (continuing operations)
1,183.2 54.0
1,073.5 51.3
Net cash received in advance of performance obligations being fully satised
1
– (65.7)
–
(31.7)
Transfers in the year from contract assets to trade receivables
2
(1,165.8) –
(1,089.5)
–
30 June 2022 173.4 (104.4)
156.0 (92.7)
1 Net cash received in advance of performance obligations being fully satised was previously reported as £(38.1)m in the prior period.
2 Transfers in the year from contract assets to trade receivables was previously reported as £(1,086.4)m in the prior period.
Revenue allocated to performance obligations that are unsatised at 30 June, are expected to be recognised as disclosed in note 3.
The Company has no contract balances.
The amount of revenue recognised in the year from performance obligations satised in previous periods amounts to £3.0m (2021: £7.3m).
Notes to the consolidated nancial statements
continued
135
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
22 Deferred income tax
Deferred income tax is calculated in full on temporary differences under the liability method and is measured at the average tax rates that are expected
to apply in the periods in which the timing differences are expected to reverse.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income
tax liabilities. The net deferred tax position at 30 June was:
Group
2022
£m
2021
£m
Deferred income tax assets – non-current
15.6
15.0
Deferred income tax assets
15.6
15.0Deferred income tax liabilities – non-current
(1.6)
(0.7)
Deferred income tax liabilities
(1.6)
(0.7)
Net deferred income tax
14.0
14.3The movement for the year in the net deferred income tax account is as shown below:
Group
2022
£m
2021
£m
At 1 July
14.3
4.3
Current year’s deferred income tax
(0.9)
(8.9)
Adjustment in respect of prior years
0.6
(0.3)
Transfer from current tax assets and change in rates of deferred income tax
1
0.3
19.2
Acquisition of subsidiaries
(0.3)
–At 30 June 14.0
14.3
1 The Group had previously recorded a deferred tax asset in respect of unutilised tax credits resulting from historic trading contract losses. This asset was initially recorded
within current tax assets and was transferred during the previous year. The Group has assessed that an asset equal to the value of unutilised tax credits expected to be
utilised over the next three nancial years is appropriate, as, based on the already secured work for that timeframe and the approved Group budgets, management have
assessed it is probable that the Group will have sufcient taxable prots to enable the deferred tax asset to be recovered. These losses can be carried forward indenitely
and have no expiry date.
Any remaining unutilised tax credits have not been recognised and the Group has approximately £53m (2021: £95m) of unrecognised trading losses,
although these are subject to agreement with HMRC.
Movements in deferred income tax assets and liabilities during the year are shown below:
The Company has no deferred tax balances.
Deferred income tax assets
Group
Accelerated
tax
depreciation
£m
Share-based
payments
£m
Tax
losses
£m
Other
1
£m
Total
£m
At 30 June 2020 –
0.4
–4.9 5.3
Expense taken to income statement
(0.4)
–(9.3) 0.5 (9.2)
Adjustment in respect of prior years
2
– –
(0.3)
–(0.3)
Transfer from current tax assets and change in rates of deferred income tax – –
19.2
–19.2
At 30 June 2021
– –
9.6 5.4 15.0
(Expense)/credit taken to income statement
(0.4) 0.2 – (0.4) (0.6)
Adjustment in respect of prior years
2
(0.2) – 2.4 (1.6) 0.6
Transfer to deferred income tax liabilities
0.6 – – – 0.6
At 30 June 2022 – 0.2 12.0 3.4 15.6
1 Deferred tax assets included in the ‘Other’ category relate to future income tax deductions available from IFRS transitions adjustments in respect of IFRS 15, IFRS 9 and
IFRS 16 which will be utilised over the next 3-6 years in line with the requirements of tax legislation.
2 The adjustment is respect of prior years of £0.6m (2021: £0.3m) arises predominantly due to the recognition of previously restricted tax interest expense deductions due
to the corporate interest restriction provisions. This deferred tax asset will be utilised over the next three nancial years in the form of reactivated tax interest expense
deductions against tax interest income from Group investment assets. This is offset by other adjustments that reect changes to the estimates made in the previous years’
Annual Report and Accounts and the nalised tax computations submitted to HMRC.
The Company has no deferred tax balances.
136
Galliford Try Holdings plc
22 Deferred income tax (continued)
Deferred income tax liabilities
Group
Accelerated
tax
depreciation
£m
Retirement
benet
obligations
£m
Intangible
assets
acquired
£m
Total
£m
At 30 June 2020 –
(0.2) (0.8) (1.0)
Income taken to income statement –
0.2 0.1 0.3
At 30 June 2021 – –
(0.7) (0.7)
Transfer from deferred income tax assets
(0.6) – – (0.6)
Acquisition of subsidiaries
– – (0.3) (0.3)
At 30 June 2022 (0.6) – (1.0) (1.6)
23 Financial instruments
The Group’s activities expose it to a variety of nancial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk
and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of nancial markets and seeks to minimise
potential adverse effects on the Group’s nancial performance. Financial assets and liabilities are offset and the net amount reported when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle
the liability simultaneously.
The Group and Company operate within nancial risk policies and procedures approved by the Board. It is, and has been throughout the year,
the Group’s policy that no trading in nancial instruments shall be undertaken. The Board provides written principles for overall risk management,
as well as written policies covering specic areas such as foreign exchange risk, interest rate risk, credit risk, use of derivative nancial instruments
and non-derivative nancial instruments, and investment of excess liquidity. The Group’s and Company’s nancial instruments principally comprise
cash and cash equivalents, receivables, payables and PPP and other investments that arise directly from its operations and its acquisitions.
Capital risk management
The Group is funded by ordinary shares, retained prots and its strong net cash position. The Group’s and Company’s objectives when managing capital
are to safeguard the Group’s ability to continue as a going concern, in order to provide returns for shareholders and benets for other stakeholders,
and to maintain an optimal capital structure to reduce the cost of capital. The Group has no borrowing or debt facilities and hence no gearing targets.
Financial risk factors
(a) Market risk
(i) Foreign exchange risk
All material activities of the Group take place within the UK and consequently there is little direct exchange risk, other than payments to overseas
suppliers who require settlement in their currency. If there is any material foreign exchange exposure, the Group’s policy is to enter into forward
foreign currency contracts. The Group and Company have no material currency exposure at 30 June 2022 (2021: nil).
(ii) Price risk
Other than a residual interest in equity securities, the Group and Company are not exposed to equity or commodity price risk.
(iii) Interest rate risk
The Group’s income and operating cash ows are substantially independent of changes in market interest rates.
The Group’s interest rate risk arises from movement in cash and cash equivalents given that it is well capitalised with no debt or net overdraft facilities.
(b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, deposits and borrowings with banks and nancial institutions,
as well as credit exposures to customers, including outstanding receivables and committed transactions. The Group does not hold any debt facilities.
Further details of credit risk relating to trade and other receivables are disclosed in note 17. No credit limits were exceeded during the reporting period,
and management does not expect any material losses from non-performance of any counterparties, including in respect of receivables not yet due.
The Group’s maximum exposure to credit risk at the end of the reporting period is the carrying amount (book value) of each class of nancial asset set
out on the following page.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufcient cash and marketable securities. The Group nances its operations through its cash
reserves and ongoing retained prots. Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash ow.
This is generally carried out at local level in the operating companies of the Group, in accordance with practices and limits set by the Group. These
limits vary by location to take into account the liquidity of the market in which the entity operates. On a daily basis throughout the year, the bank
balances or gross overdrafts in all the Group’s operating companies are aggregated into a total cash gure, in order that the Group can obtain the
most advantageous interest rate.
In accordance with IFRS 9 ‘Financial Instruments’, the Group has reviewed all contracts for embedded derivatives that are required to be separately
accounted for if they do not meet certain requirements set out in the standard. No such embedded derivatives have been identied.
Notes to the consolidated nancial statements
continued
137
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
23 Financial instruments (continued)
Fair value of other nancial assets and nancial liabilities
Where market values are not available, fair values of nancial assets and nancial liabilities have been calculated by discounting expected future cash
ows at the prevailing interest rate.
Primary nancial instruments held or issued to nance the Group’s operations:
Notes
2022
2021 (note – 35)
Book value
£m
Fair value
£m
Book value
£m
Fair value
£m
Financial liabilities:
Current nancial liabilities measured at amortised cost
1
19 330.8
336.8 336.8
330.8Financial assets:
PPP and other investments 16 49.1
47.5 47.5
49.1Current assets measured at amortised cost
17 227.8
229.6 229.6
227.8Cash and cash equivalents
18 216.2
218.9 218.9
216.21 The prior year balance has been restated to reect a reclassication between accruals and provisions as detailed in note 20 and 35.
Prepayments are excluded from the nancial assets measured at amortised cost; and statutory liabilities and contract liabilities are excluded from
nancial liabilities measured at amortised cost. A maturity analysis of the Group’s non-derivative nancial liabilities is given in note 19.
There is no difference between the book value and the fair value of the Company’s nancial assets and nancial liabilities.
Borrowing facilities
The Group had no committed borrowing facilities available at 30 June 2022 or 2021.
Fair value estimation
Specic valuation techniques used to value nancial instruments are dened as:
value of other investments is set out in note 16.
The following table presents the Group’s assets and liabilities that are measured at fair value at 30 June:
2022
2021
Level 3
£m
Total
£m
Level 3
£m
Total
£m
Assets
Fair value through other comprehensive income
– PPP and other investments
47.5 47.5
49.1 49.1
Total 47.5 47.5
49.1 49.1
There were no transfers between levels during the year.
The fair value of nancial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using
valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity
specic estimates. If all signicant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of
the signicant inputs is not based on observable market data, the instrument is included in Level 3.
Fair value measurements using signicant unobservable inputs (Level 3)
2022
£m
2021
£m
At 1 July
49.1
40.7
Additions
–
1.9Movement in fair value
(0.9)
7.5
Disposals and subordinated loan repayments
(0.7)
(1.0)
Closing balance
47.5
49.1
The key assumptions used in Level 3 valuations include the expected timing of receipts, credit risk and discount rates. The typical repayment period is
10–15 years and the timing of receipts is based on historical data. The fair value of the portfolio reects a blended discount rate of 7.0% (2021: 7.0%) and
is based on current market conditions. The sensitivity to discount rates is set out in note 16. If receipts were to occur earlier than expected, the fair value
would increase.
138
Galliford Try Holdings plc
24 Ordinary shares and share premium
Group
Number of
shares
Ordinary
shares
£m
Share
premium
£m
Total
£m
At 30 June 2020 and 30 June 2021
111,053,489 55.5
–
55.5Allotted under share option schemes – –
739
–At 30 June 2022 111,054,228 55.5 – 55.5
Company
Number of
shares
Ordinary
shares
£m
Share
premium
£m
Total
£m
At 30 June 2020 and 30 June 2021
111,053,489 55.5
–
55.5Allotted under share option schemes – –
739
–At 30 June 2022 111,054,228 55.5 – 55.5
Number of shares refers to 50p ordinary shares, which are authorised, issued and fully paid. There are no shares authorised and issued but not
fully paid.
At 30 June 2022, the total number of shares outstanding under the SAYE share option scheme was 2,589,973 (2021: 1,989,993 ) and under the LTIPs
was 6,986,213 (2021: 5,496,703) as detailed in note 25.
25 Share-based payments
The Group operates performance-related share incentive plans for Executives, details of which are set out in the Directors’ Remuneration report.
The Group also operates sharesave schemes. The total charge for the year relating to employee share-based payment plans was £2.3m (2021: £1.0m),
all of which related to equity-settled share-based payment transactions. After deferred tax, the total charge was £2.1m (2021: £1.0m).
Savings related share options
The Company operates an HMRC approved sharesave scheme, under which employees are granted an option to purchase ordinary shares in
the Company at up to 20% less than the market price at grant, in three years’ time, dependent on their entering into a contract to make monthly
contributions into a savings account over the relevant period. These funds are used to fund the option exercise. This scheme is open to all employees
meeting the minimum employment period. No performance criteria are applied to the exercise of sharesave options.
The options were valued using the binomial option-pricing model. The fair value per option granted and the assumptions used in the calculation are
as follows:
Grant date
Shares under
option
Share price at
grant date
Exercise
price
Contract
date
Expected
volatility
Option life
(years)
Risk free
rate
Dividend
yield
Employee
turnover
before
vesting
Fair value
per option
07.04.21 1,989,993 130p 112p 01.06.21
60%
30.2% 3.1% 10%
50p13.04.22 999,819 174p 143p 01.06.22
58%
31.5% 3.3% 10%
70pThe expected volatility is based on historical volatility in the movement in the share price over the past three years up to the date of grant (or since
incorporation of the Company in January 2020). The expected life is the average expected period to exercise. The risk free rate is the yield on
zero-coupon UK Government bonds of a term consistent with the assumed option life. A reconciliation of savings related share awards over the
year to 30 June 2022 is shown below:
2022
2021
Number
Weighted
average
exercise
price
Number
Weighted
average
exercise
price
Outstanding at 1 July –
1,989,993 112p
–Awards 112p
999,819 143p
1,998,476Forfeited 112p
(120,096) 112p
(5,141)Cancelled 112p
(79,454) 113p
(3,342)Expired
(199,550) 113p
– –
Exercised
(739) 112p
– –
Outstanding at 30 June
2,589,973 123p
1,989,993 112p
Exercisable at 30 June –
– –
–The weighted average fair value of awards granted during the year was 70p (2021: 50p). There were 739 share options exercised during the year
ended 30 June 2022 (2021: nil) and the weighted average share price at the date of exercise was 171 pence (2021: nil). The weighted average remaining
contractual life is 2 years and 3 months (2021: 2 years and 11 months ).
Notes to the consolidated nancial statements
continued
139
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
25 Share-based payments (continued)
Performance-related long-term incentive plans
The Company operates performance-related share incentive plans for Executives, details of which are set out in the Directors’ Remuneration report.
The awards that vest are satised by the transfer of shares for no consideration.
The outstanding options were valued using a Black-Scholes model. The fair value per option granted and the assumptions used in the calculation are
as follows:
Grant date
Shares under
option
Share price at
grant date
Vesting
period/option
life (months)
Risk free
rate
Dividend
yield
Fair value
per option
13.03.20 2,248,829 123p 36
0.3% 3.1%
112p23.09.20 3,247,874 78p 36
(0.1)% 3.1%
71p23.09.21 1,489,510 177p 36
0.4% 2.5%
164pThe expected volatility is based on historical volatility in the movement in the share price of the Company and its comparator group and the correlations
between them over the past three years. The expected life is the average expected period to exercise. The risk free rate is the yield on zero-coupon UK
Government bonds of a term consistent with the assumed option life. A reconciliation of performance-related share awards over the year to 30 June is
shown below:
2022
Number
2021
Number
Outstanding at 1 July
5,496,703
2,248,829
Exercised
1,489,510
3,247,874Outstanding at 30 June
6,986,213
5,496,703
Exercisable at 30 June
–
–The weighted average fair value of awards granted during the year was 164p (2021: 71p). There were nil options exercised during the year ended
30 June 2022 (2021: nil). The weighted average remaining contractual life is nil as the shares are exercised on the day that they vest (2021: nil).
26 Other reserves and retained earnings
Group Notes
Other
reserves
£m
Retained
earnings
£m
At 30 June 2020
85.7 (20.7)
Prot for the year –
7.7
Dividends paid 9
–
(1.3)Share-based payments
25
–1.0
Movement in fair value of PPP and other investments
16
–7.3
Purchase of own shares –
(1.1)
Reversal of impairment of investment in Galliford Try Limited and associated recycling of retained
earnings to merger reserve
15 32.7 (32.7)
At 30 June 2021
118.4 (39.8)
Prot for the year
– 6.3
Dividends paid 9
– (6.3)
Share-based payments
25
– 2.3
Movement in fair value of PPP and other investments
16
– (0.9)
Purchase of own shares
– (3.4)
Reversal of impairment of investment in Galliford Try Limited and associated recycling of retained
earnings to merger reserve
15
13.8 (13.8)
At 30 June 2022 132.2 (55.6)
140
Galliford Try Holdings plc
26 Other reserves and retained earnings (continued)
The Group’s other reserves relates to a merger reserve amounting to £132.2m (2021: £118.4m).
Company Notes
Other
reserves
£m
Retained
earnings
£m
At 30 June 2020
85.7 100.0
Prot for the year –
34.7
Dividends paid 9
–
(1.3)Reversal of impairment of investment in Galliford Try Limited and associated recycling of retained
earnings to merger reserve
15 32.7 (32.7)
At 30 June 2021
118.4 100.7
Prot for the year
– 28.8
Dividends paid 9
– (6.3)
Share-based payments
– 0.3
Reversal of impairment of investment in Galliford Try Limited and associated recycling of retained
earnings to merger reserve
15
13.8 (13.8)
At 30 June 2022 132.2 109.7
The cumulative amount of goodwill arising on acquisition and written off directly against reserves is £9.5m (2020: £9.5m).
At 30 June 2022, the Galliford Try Employee Share Trust (the Trust) held 3,541,603 (2021: 1,721,603) Galliford Try Holdings plc shares. The nominal
value of the shares held is £1.8m (2021: £0.9m). 1,820,000 shares were acquired during the year (2021: 1,500,000) at a net cost of £3.4m (2021: £1.1m)
and a further £nil (2021: £nil) was paid in relation to other share related transactions. Nil (2021: nil) shares were transferred during the year. The cost of
funding and administering the Trust is charged to the income statement of the Company in the period to which it relates. The market value of the shares
at 30 June 2022 was £6.0m (2021: £2.4m). No shareholders (2021: none) have waived their rights to dividends.
As part of and as a result of the disposal of the housebuilding operations to Vistry Group plc on 3 January 2020 and the associated scheme of
arrangement completed under Part 26 of the Companies Act 2006, shares held in Galliford Try Limited (formerly Galliford Try plc) as at 3 January 2020
(221,603) were exchanged for an equivalent number of shares in Galliford Try Holdings plc and 127,189 shares in Vistry Group plc (at a rate of 0.57406
Vistry Group plc shares for each Galliford Try Limited share). As the Group is not a strategic investor and does not wish to formally trade in external
shares (ie the shares held in Vistry plc), they are being sold in a number of tranches, with the rst three tranches of a total of 98,924 share sold in the
prior years for £1.3m cash and 14,132 shares sold in the current year for £0.2m with a residual 14,132 shares held by the Group at 30 June 2022.
These shares are recorded at fair value with the movement being reected in prot or loss.
27 Financial and capital commitments
The Group had no commitments for subordinated debt to joint ventures or other investments at 30 June 2022 (2021: £nil), nor any commitment
for other capital expenditure.
28 Guarantees and contingent liabilities
Galliford Try Holdings plc has entered into nancial guarantees and counter indemnities in respect of bank and performance bonds issued in the normal
course of business on behalf of Group undertakings, amounting to £127.1m (2021: £146.8m).
Disputes arise in the normal course of business, some of which lead to litigation or arbitration procedures. The directors make proper provision in the
nancial statements when they believe a liability exists. While the outcome of disputes and arbitration is never certain, the directors believe that the
resolution of all existing actions will not have a material adverse effect on the Group’s nancial position.
29 Related party transactions
Transactions between the Group and its related parties are disclosed as follows:
Group
Sales to
related parties
Amounts owed by
related parties
2022
£m
2021
£m
2022
£m
2021
£m
Trading transactions
Related parties
97.3
110.5
38.442.2
Interest and dividend
income from related parties
2022
£m
2021
£m
Non-trading transactions
Related parties
4.6
4.4
Sales to related parties are based on terms that would be available to unrelated third parties. Amounts owed by related parties consist predominantly
of subordinated debt within the PPP and Other Investments portfolio, that if held to maturity would be due over the next 26 years (2021: 27 years).
These receivables are unsecured, with interest rates varying between a range of 9% and 12%. Payables are due within one year (2021: one year)
and are interest free.
Notes to the consolidated nancial statements
continued
141
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
29 Related party transactions (continued)
Company
Transactions between the Company and its subsidiaries which are related parties, which are eliminated on consolidation, are disclosed as follows:
Interest and dividend
income from related parties
2022
£m
2021
£m
Non-trading transactions
Subsidiary undertakings
15.0
2.0
The Company has provided performance guarantees in respect of certain operational contracts entered into between joint ventures and a
Group undertaking.
30 Business combinations
On 7 October 2021, the Group acquired the water business of nmcn plc (which had been placed into administration) for £1.0m settled in cash. This
expanded the Group’s geographical presence on key frameworks across the UK, and its capabilities in the water sector, in line with the Group’s strategy.
The acquisition comprised of signicantly all of the water business contracts and orderbook and the entire share capital and control of Lintott
Environmental Technologies Limited and its trading subsidiary Lintott Control Systems Limited. nmcn Water delivers water and wastewater
projects for clients across the UK, including design and MEICA capabilities which will further allow growth across our Environment business.
The goodwill of £11.0m arising from the acquisition is signicantly attributable to the acquired workforce, consisting of 967 employees. None of the
goodwill recognised is expected to be deductible for income tax purposes.
The following table summarises the consideration paid and the provisional fair value of the assets acquired and liabilities assumed (which are deemed to
represent one cash generating unit).
£m
Recognised amounts of identiable assets acquired and liabilities assumed
Net cash and cash equivalents
0.7
Property plant and equipment
0.1
Intangible assets
1
5.8
Right-of-use assets
1.4
Trade and other receivables
2,5
7.8
Trade and other payables
3,5
(10.4)
Provisions and other liabilities
4
(13.7)
Lease liabilities
(1.4)
Net deferred tax liabilities
6
(0.3)
Total identiable net liabilities
(10.0)
Goodwill 11.0
Total 1.0
Consideration
Cash 1.0
Total 1.0
1 Intangible assets of £5.8m comprise customer relationships and contracts (£5.2m) and technology (£0.6m) that will be amortised over 3 -10 years,
2 Trade and other receivables include £4.4m relating to favourable contracts acquired.
3 Trade and other payables include £6.4m relating to unfavourable contracts acquired.
4 Provisions and other liabilities relate to onerous contracts.
5 The favourable and unfavourable contracts have been valued after assessing the margins in the underlying contracts novated.
6 Deferred tax has been recognised where temporary differences arise on the fair value adjustments.
The acquisition contributed £74.1m of revenue and £1.8m of pre-exceptional prot before tax and amortisation (on the acquired intangibles) in the
period to 30 June 2022. The performance of the business preceding the acquisition was impacted by nmcn plc entering administration, and accordingly
it is impracticable to assess the contribution it would have made to the Group if acquired at the start of reporting period.
Acquisition related costs of £7.7m include legal and professional fees, integration, and staff costs, have been treated as exceptional, being material and
non-recurring/irregular items in accordance with our accounting policies and detailed further in note 4.
142
Galliford Try Holdings plc
31 Post balance sheet events
On 8 July, the Group acquired 100% of the share capital of MCS Controls Systems Limited (“MCS”), a leading systems integrator to the industrial and
utilities sectors for a consideration of £1 settled in cash.
The addition of MCS’s capabilities is complementary to the operations of Galliford Try’s expanding Environment business. In particular, MCS provides
additional competencies that complement those acquired in October 2021 with nmcn’s water business and Lintott Control Systems and will accelerate
the growth of Galliford Try Environment’s asset optimisation and capital maintenance strategy.
For the year ended 31 December 2020, being the last year for which MCS has published audited results, MCS generated revenue of £10.1 million,
incurred a pre-tax loss of £0.5 million and had net assets of £2.0 million. In addition to the purchase consideration of £1, Galliford Try expects to
fund certain contractual liabilities incurred prior to the completion date of the acquisition to strengthen MCS’s balance sheet and provide
additional operational stability. As the acquisition was made after the reporting date, it has made no contribution to Group results for the year
ended 30 June 2022.
The provisional Balance Sheet at the date of acquisition is shown below.
£
Property, plant and equipment
0.3
Trade and other receivables
2.8
Trade and other payables
(3.6)
Borrowings
(1.2)
Deferred tax liabilities
(0.5)
Net liabilities acquired
(2.2)
At the date of this report, it is impracticable to disclose the provisional fair values of the acquired assets, liabilities, contingent liabilities and
goodwill,including those expected to be deductible for tax purposes as the initial accounting for the business combination is not complete.
32 Alternative performance measures
Throughout the Annual Report and Accounts, the Group has presented nancial performance measures which are used to manage the Group’s
performance. These nancial performance measures are chosen to provide a balanced view of the Group’s operations and are considered useful
to investors as they provide relevant information on the Group’s performance. They are also aligned to measures used internally to assess business
performance in the Group’s budgeting process and when determining compensation. An explanation of the Group’s nancial performance measures
and appropriate reconciliations to its statutory measures are provided below.
Providing clarity on the Group’s alternative performance measures
The Group has included this note and the enclosed explanations and reconciliations with the aim of providing transparency and clarity on the measures
adopted internally to assess performance. The APMs adopted by the Group are also commonly used in the sectors it operates in.
The Board believes that disclosing these performance measures enhances investors’ ability to evaluate and assess the underlying nancial performance
of the Group’s operations and the related key business drivers.
These nancial performance measures are also aligned to measures used internally to assess business performance in the Group’s budgeting process
and when determining compensation.
Measuring the Group’s performance
The following measures are referred to in this report:
Statutory measures
Statutory measures are derived from the Group’s reported nancial statements, which are prepared in accordance with UK adopted International
Accounting Standards and in line with the Group’s accounting policies, that can be found in note 1.
The Group’s statutory measures take into account all of the factors, including exceptional items which do not reect the ongoing underlying
performance of the Group.
Alternative performance measures
In assessing its performance, the Group has adopted certain non-statutory measures that more appropriately reect the underlying performance
of the Group. These typically cannot be directly extracted from its nancial statements but are reconciled to statutory measures below:
a) Pre-exceptional performance
The Group adjusts for certain material one-off (exceptional) items which the Board believes assist in understanding the performance achieved
by the Group as this better reects the underlying and ongoing performance of the business.
b) Operating prot before amortisation
The Group adjusts operating prot to exclude the amortisation of intangible assets as this better reects the ongoing performance of the business.
Operating margin reects the ratio of operating prot before amortisation of intangible assets and revenue. This differs from the statutory measure
of operating prot which includes the amortisation of intangible assets. Divisional operating margin is the combined operating margin of Building
and Infrastructure.
Notes to the consolidated nancial statements
continued
143
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
32 Alternative performance measures (continued)
A reconciliation of the statutory measure to the Group’s performance measure is shown below, based on continuing operations:
Building
£m
Infrastructure
£m
PPP
Investments
£m
Central
£m
Total
£m
Year ended 30 June 2022
Statutory operating prot/(loss)
17.9 2.4 (0.9) (17.3) 2.1
add: amortisation of intangible assets (note 11)
1.0 0.7 – 1.0 2.7
exclude: exceptional items (note 4)
– 7.7 – 6.0 13.7
Pre-exceptional operating prot before amortisation
18.9 10.8 (0.9) (10.3) 18.5
Revenue 789.1 441.9 6.2 – 1,237.2
Pre-exceptional operating margin 2.4% 2.4%
n/a n/a
1.5%Year ended 30 June 2021
Statutory operating prot/(loss)
14.9 6.0 (1.8) (11.1) 8.0
add: amortisation of intangible assets (note 11) –
1.0
–1.1 2.1
Operating prot before amortisation
15.9 6.0 (1.8) (10.0) 10.1
Revenue
789.2 329.2 6.4
–
1,124.8Operating margin
2.0% 1.8%
n/a n/a
0.9%c) Pre-exceptional prot before tax
The Group uses a prot before tax measure which excludes exceptional items as noted above. This differs from the statutory measure of prot before
income tax, which includes exceptional items.
A reconciliation of the statutory measure to the Group’s performance measure is shown below, based on continuing operations:
2022
£m
2021
£m
Statutory prot/(loss) before tax
5.4
11.4
add: exceptional items (note 4)
13.7
–Pre-exceptional prot before tax
19.1
11.4
d) Pre-exceptional earnings per share
In line with the Group’s measurement of pre-exceptional performance, the Group also presents its earnings per share on a pre-exceptional basis for its
continuing operations.
This differs from the statutory measure of earnings per share, which includes exceptional items.
A reconciliation of the statutory measure to the Group’s performance measure is shown below, based on continuing operations:
2022
2021
Earnings
£m
Ave number
of shares
EPS
pence
Earnings
£m
Ave number
of shares
EPS
pence
Statutory results
6.3 109,016,667 5.8
10.4 109,976,145 9.5
add: exceptional items (note 4)
11.1
–n/a n/a
n/a n/a
Pre-exceptional earnings per share
17.4 109,016,667 16.0
10.4 109,976,145 9.5
144
Galliford Try Holdings plc
33 Group undertakings
In accordance with section 409 of the Companies Act, the following is a list of all of the Group’s undertakings as at 30 June 2022.
(i) Subsidiary undertakings
Entity name Registered ofce or principal place of business
Shareholding
(direct or
indirect)
Chancery Court Business Centre Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Charles Grip Surfacing Limited Miller House, Pontefract Road, Normanton, WF6 1RN 100%
Construction Holdco 1 Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Construction Holdco 2 Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Brick Factors Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Asset Intelligence Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Building 2014 Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
Galliford Try Construction Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Construction & Investments Holdings Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Corporate Holdings Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
Galliford Try Employment Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Estates Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Facilities Management Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try HPS Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Infrastructure Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
Galliford Try Investments Consultancy Services Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Investments Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Investments NEPS Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Plant Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Properties Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Qatar Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Secretariat Services Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Services Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try Telecommunications Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Galliford Try (Water) Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT (Buidheann) Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
GT (Leeds) Lift Limited
3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT (Leicester) Limited
3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT (North Hub) Investments Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
GT (North Tyneside) Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT (Scotland) Construction Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
GT Camberwell (Holdings) Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT Camberwell Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT Car Parks Leicester (Holdings) Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT Car Parks Leicester Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT Guildford Crescent Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
GT Inverness Investments Limited
PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
GT Telford (Holdings) Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
GT TMGL Limited
PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
GTFM (Cavalry) Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Kingseat Development 1 Limited Morrison House, Kingseat Business Park, Kingseat, Newmachar,
Aberdeenshire, AB21 0AZ
100%
Leicester GT Education Company Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Lintott Control Systems Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Lintott Environmental Technologies Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Morrison Construction Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 100%
Morrison Highway Maintenance Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Oak Dry Lining Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Oak Fire Protection Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Notes to the consolidated nancial statements
continued
145
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Entity name Registered ofce or principal place of business
Shareholding
(direct or
indirect)
Regeneco (Services) Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Regeneco Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Rock & Alluvium Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Try Accord Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
Try Construction Limited 3 Frayswater Place, Uxbridge, UB8 2AD 100%
All subsidiary undertakings are incorporated in the UK unless otherwise specied and are included in the consolidated nancial statements of the
Group, as a majority of voting rights are held in each case.
(ii) Joint venture undertakings
Entity name Registered ofce or principal place of business
Proportion of
capital held
Financial
year-end
Aberdeen Roads (Finance) PLC Maxim 7, Maxim Ofce Park, Parklands Avenue, Eurocentral,
Holytown, Scotland, ML1 4WQ
33% 31-Dec
Aberdeen Roads Holdings Limited Maxim 7, Maxim Ofce Park, Parklands Avenue, Eurocentral,
Holytown, Scotland, ML1 4WQ
33% 31-Dec
Aberdeen Roads Limited Maxim 7, Maxim Ofce Park, Parklands Avenue, Eurocentral,
Holytown, Scotland, ML1 4WQ
33% 31-Dec
ACP: North Hub Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50% 31-Dec
Community Ventures
(Management) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 60% 30-Sep
Community Ventures Investments Limited 4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 60% 30-Sep
Community Ventures Partnerships Limited 4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 60% 30-Sep
Community Ventures Primary Care Limited 4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 60% 30-Sep
GBV JV Limited
3 Frayswater Place, Uxbridge, UB8 2AD 50% 30-Jun
GT Equitix Inverness Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50% 31-Mar
GT Equitix Inverness Holdings Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50% 31-Mar
Hub South East Scotland Limited 8 Melville Street, Edinburgh, EH3 7NS 50% 31-Mar
Kingseat Development 2 Limited Morrison House, Kingseat Business Park, Kingseat, Newmachar,
Aberdeenshire AB21 0AZ
50% 30-Jun
Space Scotland Limited
PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 83%
1
31-Mar
Urban Vision Partnership Limited 65 Gresham St, London, EC2V 7NQ 30% 31-Dec
The above entities are all incorporated in the UK and considered to be joint ventures, based on the shareholding agreements in place.
1 Treated as a joint venture as indicated by its joint venture agreement.
146
Galliford Try Holdings plc
33 Group undertakings (continued)
(iii) Associated and other signicant undertakings
Entity name Registered ofce or principal place of business
Proportion of
capital held by
class
Aberdeen Community Health Care Village Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Alliance Community Partnership Limited Avondale House, Suites 1l – 1o Phoenix Crescent Strathclyde
Business Park, Bellshill, North Lanarkshire, Scotland, ML4 3NJ
10%
Galliford Try Qatar LLC PO Box 11726 Doha, State of Qatar (incorporated in Qatar) 49%
Hub North Scotland (Alford) Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Hub North Scotland (FWT) Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Hub North Scotland (O&C) Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Hub North Scotland (O&C) Holdings Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Hub North Scotland Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
James Gillespie’s Campus Subhub Holdings Limited 8 Melville Street, Edinburgh, EH3 7NS 50%
James Gillespie’s Campus Subhub Limited 8 Melville Street, Edinburgh, EH3 7NS 50%
LBP DBFM Holdco Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
LBP DBFMco Limited
PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
ELCH DBFMCo Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
ELCH DBFM Holdco Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
WCHS DBFMCo Ltd PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
WCHS DBFM Holdco Ltd PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
JICC DBFMCo Ltd
PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
JICC DBFM Holdco Ltd PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
QHS DBFMCo Ltd PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
QHS DBFM Holdco Ltd PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
REH Phase 1 Subhub Holdings Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
REH Phase 1 Subhub Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
REH Phase 2 DBFM HoldCo Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
REH Phase 2 DBFMCo Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 50%
Durham & Tees Community Ventures Limited 4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures Primary Care Limited 4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures HoldCo
(No.1) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures FundCo
(No.1) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures HoldCo
(No.2) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures FundCo
(No.2) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures HoldCo
(No.3) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures FundCo
(No.3) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures HoldCo
(No.4) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures FundCo
(No.4) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Durham & Tees Community Ventures HoldCo
(No.5) Limited
4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 18%
Hub North Scotland (I&F) Holdings Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Tees & Durham (LIFT) Investments Limited 4340 Park Approach, Thorpe Park, Leeds, LS15 8GB 30%
Hub North Scotland (I&F) Limited PO Box 17452, 2 Lochside View, Edinburgh, EH12 1LB 30%
Hub South West Scotland Limited Avondale House, Suites 1l – 1o Phoenix Crescent Strathclyde
Business Park, Bellshill, North Lanarkshire, ML4 3NJ
6%
Hub SW Cumbernauld DBFMCo Limited Avondale House, Suites 1l – 1o Phoenix Crescent Strathclyde
Business Park, Bellshill, North Lanarkshire, ML4 3NJ
6%
Hub SW Cumbernauld Holdco Limited Avondale House, Suites 1l – 1o Phoenix Crescent Strathclyde
Business Park, Bellshill, North Lanarkshire, ML4 3NJ
6%
The above entities are all incorporated in the UK except Galliford Try Qatar LLC, which is incorporated in Qatar.
Entities listed above with 50% ownership percentage are treated as associates, as indicated by their ownership agreements.
Notes to the consolidated nancial statements
continued
147
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
34 Discontinued operations
On 3 January 2020, the Group completed the disposal of the Linden Homes and Partnerships & Regeneration divisions of Galliford Try plc (in addition
to certain other assets and liabilities transferred to Vistry Group plc as part of this transaction), following the implementation of a Group restructuring
and scheme of arrangement under Part 26 of the Companies Act 2006 becoming effective on 2 January 2020. Additionally, with effect from 8:00 a.m.
on 3 January 2020, 111,053,489 Galliford Try Holdings plc shares with a nominal value of 50p each, being the entire issued share capital of Galliford Try
Holdings plc, were admitted to the premium listing segment of the Ofcial List of the FCA and to trading on the main market for listed securities of the
London Stock Exchange, with a corresponding cancellation of all shares of Galliford Try plc.
As a result of this disposal, the Linden Homes and Partnerships & Regeneration segments were classied as discontinued operations.
The Group has not recognised any discontinued operations in the current year.
The result of these discontinued operations in the previous year were as follows:
Year ended 30 June 2021
Central
£m
Total
£m
Revenue
– –
Operating loss and loss before taxation
(2.7) (2.7)
Income tax expense
– –
Loss after tax of discontinued operations
(2.7) (2.7)
These costs were primarily residual professional fees and other costs relating to the transaction and discontinued operations.
148
Galliford Try Holdings plc
35 Prior year adjustments
The Group has identied the need to make a correction to the 2021 and 2020 balance sheets.
i) The balance sheet at 30 June 2021 has been restated due to the incorrect presentation of trade receivables, contract assets and contract liabilities
in relation to one combined contract. At 30 June 2021, no trade receivable should have been recognised as there was not an unconditional right to
payment, the amount should have instead been recognised as a contract asset. Additionally, the contract position across different performance
obligations within the combined contract should have been presented as one net balance whereas it was previously presented on a gross basis.
ii) The provisions and accruals balance have been restated, reecting a reclassication between the two line items. Onerous contract and rectication
provisions were previously reported within accruals but should have been presented as provisions. See note 20 for additional information on provisions.
iii) Other receivables and current income tax assets have been restated reecting a reclassication of research and development expenditure credits
from current income tax assets to other receivables.
To correct the presentation of these balances in the prior year, the Group has restated the balance sheet and associated note disclosures as at 30 June
2021 and statement of cash ows for the year then ended as outlined below.
There is no overall effect of the restatements on net assets at 30 June 2021 nor prot for the year then ending.
Balance Sheet
Group
2021
originally
reported
£m
Adjustment
i)
Adjustment
ii)
Adjustment
iii)
2021
restated
£m
Assets
Non-current assets
Intangible assets – –
5.7
–5.7
Goodwill 77.2
– – –
77.2Property, plant and equipment – –
4.4
–4.4
Right-of-use assets – –
19.5
–19.5
Investments in subsidiaries – – – – –
Investments in joint ventures – –
0.2
–0.2
PPP and other investments 49.1
– – –
49.1Deferred income tax assets 14.3
– – –
14.3Total non-current assets – –
170.4
–170.4
Current assets
Trade and other receivables
243.3 (6.4)
–4.5 241.4
Current income tax assets –
8.8
–(4.5) 4.3
Cash and cash equivalents – –
216.2
–216.2
Total current assets –
468.3 (6.4)
–461.9
Total assets 638.7 (6.4)
– –
632.3Liabilities
Current liabilities
Trade and other payables
(485.4) 6.4 25.0
–(454.0)
Lease liabilities – –
(7.3)
–(7.3)
Provisions for other liabilities and charges – –
(25.0)
–(25.0)
Total current liabilities –
(492.7) 6.4
–(486.3)
Non-current liabilities
Lease liabilities – –
(11.9)
–(11.9)
Total non-current liabilities – –
(11.9)
–(11.9)
Total liabilities –
(504.6) 6.4
–(498.2)
Net assets 134.1
– – –
134.1Equity
Ordinary shares – –
55.5
–55.5
Other reserves 118.4
– – –
118.4Retained earnings – –
(39.8)
–(39.8)
Total equity attributable to owners of the Company – –
134.1
–134.1
The only material impact on the 30 June 2020 balance sheet is a reclassication to increase other receivables by £4.5m, reduce current income
tax assets by £4.5m, increase provisions for other liabilities and charges by £15.3m and reduce accruals by £15.3m. There is no impact on net assets
or reserves.
Notes to the consolidated nancial statements
continued
149
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
35 Prior year adjustments (continued)
Statements of cash ows
As a result of the restatements to the balance sheet, the following working capital movements have also been restated, with no other impact to the
statement of cash ows.
Group
2021
originally
reported
£m
Adjustment
i)
Adjustment
ii)
Adjustment
iii)
Impact of
30 June 2020
restatement
1
2021
restated
£m
Net cash generated from operations before changes in
working capital – – –
22.3
–22.3
(Increase)/decrease in trade and other receivables – –
9.4 6.4
–15.8
Increase/(decrease) in trade and other payables
27.4 (6.4) (25.0)
–15.3 11.3
(Decrease)/increase in provisions (0.3) 9.4
–
25.0–
(15.3)Net cash generated from operations
58.8
– – – –
58.81 Refer to note 20 for the impact on 30 June 2020.
Trade and other receivables
Group
2021
originally
reported
£m
Adjustment
i)
Adjustment
ii)
Adjustment
iii)
2021
restated
£m
Trade receivables –
51.8 (3.3)
–48.5
Less: provision for impairment of receivables – –
(0.1)
–(0.1)
Trade receivables – net –
51.7 (3.3)
–48.4
Contract assets 159.1 (3.1)
– –
156.0Amounts due from joint ventures – –
6.1
–6.1
Research and development expenditure credits – –
4.5
–4.5
Other receivables – –
12.8
–12.8
Prepayments – –
13.6
–13.6
243.3 (6.4) 241.4
–
4.5Trade and other payables
Group
2021
originally
reported
£m
Adjustment
i)
Adjustment
ii)
Adjustment
iii)
2021
restated
£m
Trade payables – –
90.9
–90.9
Contract liabilities –
99.1 (6.4)
–92.7
Other taxation and social security payable – –
30.5
–30.5
Other payables – –
1.2
–1.2
Accruals
263.7
–(25.0)
–238.7
485.4 (6.4) (25.0)
–
454.0The impact on provisions for other liabilities and charges is stated in note 20.
150
Galliford Try Holdings plc
2018
£m
2019
1
£m
2020
1
£m
2021
1
£m
2022
1
£m
Revenue
2,931.6 1,400.1 1,121.6 1,124.8
1,237.2
Prot/(loss) before exceptional items
188.7 (17.2) (59.7) 11.4
19.1
Exceptional items (45.0) (47.3) 25.1
–
(13.7)
Prot/(loss) before taxation
143.7 (64.5) (34.6) 11.4
5.4
Tax (25.4) 15.0 2.0 (1.0)
0.9
Prot/(loss) after taxation attributable to shareholders
118.3 (49.5) (32.6) 10.4
6.3
Fixed assets (including IFRS 16 right-of-use assets), investments in
joint ventures, PPP and other investments
93.4 124.8 67.5 73.2
79.4
Intangible assets and goodwill
174.9 171.4 85.0 82.9
97.0
Net current assets/(liabilities)
579.8 340.2 (14.4) (24.4)
(43.4)
Other long term assets
155.9 246.7 5.3 14.3
14.0
Long-term payables and provisions
(321.8) (203.8) (22.9) (11.9)
(14.9)
Net assets 682.2 679.3 120.5 134.1
132.1
Share capital 55.5 55.5 55.5 55.5
55.5
Reserves
626.7 623.8 65.0 78.6
76.6
Shareholders’ funds
682.2 679.3 120.5 134.1
132.1
Dividends per share (pence) 77.0 58.0
–
4.78.0
Basic earnings per share (pence)
2
121.1 (10.7) (47.7) 9.5
16.0
Diluted earnings per share (pence)
2
120.6 (10.6) (47.7) 9.1
15.0
1 2019, 2020, 2021 and 2022 Income Statement and earnings per share balances reect continuing operations only, accounted for in accordance with IFRS 5 (2018 reects
the total Group in those years, including housebuilding). The 2018 and 2019 balance sheets reect the whole Group, including housebuilding, in those years.
2 Pre-exceptional.
Five-year record (unaudited)
Notes to the consolidated nancial statements
continued
151
Annual Report and Financial Statements 2022
Strategic report
Governance
Financial information
Financial calendar 2022
Half year results announced
3 March
Full year results announced 21 September
Ex dividend date
10 November
Final dividend record date
11 November
Annual General Meeting 11 November
Final dividend payment 9 December
Shareholder enquiries
The Company’s registrars are Equiniti Limited. They will be pleased
to deal with any questions regarding your shareholding or dividend
payments. Please notify them if you change your address or other
personal information. Call the shareholder contact centre on
0371 384 2202. Lines open from 8.30am to 5.30pm, Monday to Friday;
overseas shareholders should call +44 371 384 2202 or, alternatively,
write to them at:
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
You can nd a number of shareholder services online via their website
at www.shareview.co.uk, including the portfolio service which gives
you access to more information on your investments such as balance
movements, indicative share prices and information on recent dividends.
You can also register your email address to receive shareholder
information and Annual Report and Accounts electronically.
Share dealing service
A telephone and internet dealing service is available through
Equiniti which provides a simple way of buying and selling Galliford Try
shares. Commission is currently 1.5% with a minimum charge of
£60 for telephone dealing and a minimum charge of £45 for internet
dealing. For telephone sales call 0345 603 7037 between 8.00am
and 4.30pm, Monday to Friday, and for internet sales log on to
www.shareview.co.uk/dealing. You will need your shareholder reference
number as shown on your share certicate. Share dealing services are
also widely provided by other organisations. The Company is listed on
the London Stock Exchange under the code GFRD and the SEDOL and
ISIN references are BKY40Q3 and GB00BKY40Q38.
Group website
You can nd out more about the Group on our website
www.gallifordtry.co.uk which includes a section specically
prepared for investors. In this section you can check the Company’s
share price, nd the latest Company news, look at the nancial reports
and presentations as well as search frequently asked questions and
answers on shareholding matters. There is also further advice for
shareholders regarding unsolicited boiler room frauds.
Company contact
Contact with existing and prospective shareholders is welcomed
by the Company. If you have any questions please contact the General
Counsel & Company Secretary, either at the registered ofce or
via email (kevin.corbett@gallifordtry.co.uk).
Analysis of shareholdings at 30 June 2022
Size of shareholding
% of
holders
Number
of holders
% of
shares
Number of
shares
1 – 10,000 92.08%
2,941
2.70%3,005,929
10,001 – 50,000 4.00%
128
2.64%2,929,843
50,001 – 500,000 2.82%
90
14.15%15,710,665
500,001 – highest 1.10%
35
80.15%89,407,791
Total
100.00%
3,194100.00%
111,054,228Registered ofce
Galliford Try Holdings plc
Blake House
3 Frayswater Place
Cowley
Uxbridge
Middlesex
UB8 2AD
Stockbrokers
Peel Hunt LLP
HSBC Bank plc
Bankers
Barclays Bank PLC
HSBC Bank PLC
Registration
England and Wales 12216008
Independent auditor
BDO LLP
Shareholder information
152
Galliford Try Holdings plc
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Galliford Try Holdings plc Annual Report and Financial Statements 2022
Galliford Try Holdings plc
Blake House
3 Frayswater Place
Cowley
Uxbridge
Middlesex
UB8 2AD
T: 01895 855 001
W: gallifordtry.co.uk