|Go to market news section|
10 July 2014
Galliford Try PLC
Acquisition of Miller Construction
Galliford Try PLC ("Galliford Try" or "the Company") is pleased to announce the acquisition of the Miller Construction business ("Miller Construction") from Miller Group Holdings (UK) Limited ("Miller Group") ("Acquisition"), for a total price of £16.57 million. The Acquisition is cash accretive and will be earnings enhancing in the year ending 30 June 2015 (including one-off restructuring costs).
Miller Construction is a UK only construction business which delivers building and infrastructure projects to both the public and private sectors. In the year to 31 December 2013, Miller Construction reported revenue of £409 million.
Rationale for the Acquisition
The tactical acquisition of Miller Construction is consistent with Galliford Try's stated strategy of disciplined and selective growth in its construction business, with a particular focus on developing our positions on regional and national frameworks. The transaction accelerates the growth in construction turnover towards £1.25bn, and increases the 2018 target to circa £1.5bn. The acquired order book of £1.4bn doubles the Group's order book to £2.8bn.
The Directors believe that the Acquisition price of £16.57 million represents a very attractive valuation for Galliford Try.
Key financial information
For the year ended 31 December 2013, Miller Construction generated £409 million of revenue and a loss before interest and tax of £4 million. During the 2013 financial year and subsequently, Miller Construction has restructured or exited a number of mainly loss-making contracts and is now anticipated to return to profitability in the current year.
Miller Construction had gross assets of £232 million at 31 December 2013. Under the terms of the Acquisition, the Miller Group has agreed to transfer Miller Construction with a nil net assets balance, including a cash balance of £23 million.
In addition, Miller Construction has a PPP portfolio with an invested value of approximately £14 million. Galliford Try has identified a total of £7 million per annum of cost synergies, the majority of which it would expect to realise during the financial year ending 30 June 2015. In order to achieve these synergies, it is expected that £4 million of one-off restructuring costs will be incurred, mainly during the year ending 30 June 2015. Notwithstanding the restructuring costs, the Directors believe that the Acquisition will be earnings enhancing in the year ending 30 June 2015.
Galliford Try was advised on the Acquisition by Gleacher Shacklock LLP.
Commenting on the Acquisition, Greg Fitzgerald, Chief Executive of Galliford Try, said:
"We are delighted to announce the acquisition of Miller Construction, achieved at a very good price and with no net cash consideration. The acquisition brings together two construction businesses with a strong strategic fit and accelerates our strategy of growth into an improving marketplace."
Note: Nothing in this announcement is intended to be, or is to be construed as, a profit forecast or to be interpreted to mean that earnings per Galliford Try share for the current or future financial years, or those of Galliford Try following the Acquisition, will necessarily match or exceed the historical earnings per Galliford Try share.
A conference call for Analysts and Investors will be held at 08:00am (UK time)
Participant telephone number: +44 (0)20 3139 4830
Participant passcode: 33856490#
For further enquiries:
Galliford Try Greg Fitzgerald, Chief Executive 01895 855001
Graham Prothero, Finance Director
Tulchan Communications Christian Cowley 020 7353 4200
James Macey White
Notes to editors:
Galliford Try plc is a leading UK housebuilding and construction group. It is listed on the London Stock Exchange and a member of the FTSE 250. The housebuilding business - through its Linden Homes and Galliford Try Partnerships brands - sells distinctive homes to the public and affordable homes to housing associations and local authority providers. The construction business carries out building and infrastructure work across the UK with clients ranging from major Government departments through to regulated utilities and private sector companies. At the end of the last financial year to 30 June 2013, the Group generated revenues of £1.5 billion.
Miller Construction is a UK construction business which delivers building and infrastructure projects to both the public and private sectors. In the year to 31 December 2013, Miller Construction reported revenue of £409 million.
London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.
|©London Stock Exchange plc. All rights reserved|