Galliford Try PLC's finals under scrutiny after disposal talks revived

Other numbers in the diary include Futura Medical, Advanced Medical Solutions, Anpario and S4 Capital

Galliford Try plc - construction numbers in focus

A day after revealing it was back in talks to sell its housing business, construction firm Galliford Try plc (LON:GFRD) is due to be reporting final results on Wednesday.

Selling the Linden Homes and Partnerships & Regeneration businesses to Bovis, as has been proposed at a price of around £1.075bn, will make its construction unit the key.

Back in July Galliford guided to group pre-tax profits being in line with expectations, so investors may be looking for any more information on the group’s volume targets for 2021, which are currently being reviewed as the firm aims to manage its growth and gearing.

Analysts at Peel Hunt are expecting the results to show “continued robust new housing activity”, albeit with softer conditions in London and the South East, while order levels and pipeline activity are predicted to have been good.

“Construction will be more mixed with some end sectors being more wary of starting new projects under the Brexit uncertainty. Overall though the Construction pipeline is expected to continue showing better margins albeit from a smaller revenue base as it downsizes”, they added.

Peel Hunt has forecast a 2019 adjusted pre-tax profit for Galliford of £187mln with revenues of £2.7bn.

Covenant watch or phoenix from the flames?

Shopping centre owner Capital & Regional PLC (LON:CAL) is also due to post its half-year numbers, with its shares down more than 40% so far in 2019.

In May there was reassurance that none of the three Debenhams stores in its portfolio of seven shopping centres were among the 22 to be closed as part of the department store group’s restructuring plans.

But while none of the real estate investment trust’s Debenhams stores are closing, it estimates the retailer’s struggles will shave £700,000 off net rental income in 2019, or £1.3mln on an annualised basis.

Chief executive Lawrence Hutchings is meanwhile working on plans to “unlock underlying value” of through mixed-use development rights above and immediately adjacent to its shopping centres.

However, in July a huge blaze tore through one of its shopping centres in Walthamstow, north-east London.

An August update revealed a further fall in the value of its assets in the first half, around 7.4%, calculated Peel Hunt, but a relatively robust new lettings and renewals performance.

Analysts warned, “a number of debt covenants could be challenged if further reductions in asset values are witnessed”.

Luton is of most concern as the second-largest asset by value and where a number of tenants have announced store closures recently, such as M&S and Topshop, and where the December 2019 loan-to-value was at 55% against a covenant that hits 65% in Jan 22.

Wednesday September 11:

Finals: Galliford Try plc (LON:GFRD)

Interims: Advanced Medical Solutions Group (LON:AMS), Anpario (LON:ANP), DP Eurasia (LON:DPEU), Ecsc Group PLC (LON:ECSC), Epwin Group PLC (LON:EPWN), Futura Medical PLC (LON:FUM), Oakley Capital Investments Ltd (LON:OCI), S4 Capital PLC (LON:SFOR)

Economic data: MBA US mortgage applications, US producer prices


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