Chairman's statement

I am pleased to report that the Group produced a strong performance in 2016 across all our divisions.

I have spent my first few months gaining an in-depth understanding of the Group and its divisions, visiting a wide variety of projects on site and meeting with the senior management teams. I have found a real sense of energy and pride in our people as well as a clear focus on making this Group a success. Our work provided new housing, revitalised schools, universities and workplaces, improved transport and enhanced urban communities. 

Over the coming months, I will support our executive directors in delivering our strategic objectives, continuing our people development agenda and ensuring we remain focused on creating value for shareholders.  

Performance 2016 has been a year of positive growth for the Group, with strategic and operational progress being made across all divisions. Revenue for the year was up 7% at £2,562m (2015: £2,385m), with adjusted profit before tax up 32% to £45.3m (2015: £34.3m). The cash performance of the Group has also been strong. This reflected our concerted focus on working capital management as well as a significant number of completions of regeneration schemes in Partnership Housing in the latter part of the year.

Looking ahead
Our 2016 results demonstrate the considerable strategic and operational progress made in the Group over the last few years and the underlying quality of the business.  These achievements would not be possible without the hard work and commitment of the Group’s 6,000 employees and I would like to extend my gratitude to all of them. People and succession planning will remain one of the Board’s three priorities, alongside strategy and its execution, and an ongoing commitment to our values.  As chairman I am fully focused on helping the executive team deliver long-term value for all of our stakeholders. We are confident in the outlook and expect the positive momentum across the Group to continue through 2017 and beyond.

Michael Findlay
Chairman
February 2017

Values and strategy

Our performance is underpinned by our core values which are embraced by all employees. These values place our clients in the highest regard and empower our employees to provide them with the best quality service. The Group is decentralised, with our divisions given authority to take decisions and innovate. However, the divisions are driven by shared strategic objectives and regularly collaborate on projects and exchange ideas. This results in a cohesive group of businesses that each offer specialist services to their customers while having the capability to work together on projects and provide a joined-up solution.

The Group’s strategy is to continue to focus on our well-established strengths in construction and regeneration, driven by the increasing demand in the UK for affordable housing, urban regeneration and investment in infrastructure.  Our recognised expertise and market positions in infrastructure, affordable housing and mixed-use regeneration development reflect our deep understanding of the built environment developed over many years. As a result, our capabilities are aligned with sectors of the UK economy which are expected to see increasing opportunities in the medium to long term.  

Board changes

I would like to thank my predecessor, Adrian Martin, for his significant contribution to reshaping the business since he took over as chair in 2012.  Adrian left the business in excellent shape, with a strong long-term order book and solid balance sheet.

Liz Peace has decided not to stand for re-election at the 2017 AGM and will, therefore, be leaving the Board with effect from the conclusion of the meeting. I would like to thank Liz for her important contribution to the Board and its committees during her time as a director.

Dividend

The total dividend for the year has been increased by 21% to 35.0p per share (2015: 29.0p), which includes a proposed increase in the final dividend of 29% to 22.0p per share (2015: 17.0p), reflecting the improved result in the year and the Board’s confidence in the future prospects of the Group.