Financial highlights
Solid performance in ongoing difficult markets and economy, in line with our expectations
Margin stable due to continued focus on delivering our strategy
Disposal of mature investments released £26m of capital to be redeployed into major housing and urban regeneration schemes
Result includes £7.0m gain on the disposal of medical properties investment
Restructuring of construction and affordable housing activities giving rise to non-recurring costs of £10.0m
Average net debt balance of £40m (2011: net funds of £23m), as expected, reflecting increase in working capital deployed across the Group and reduction of construction-related revenue
Final proposed dividend of 15.0p (2011: 30.0p) giving a total dividend of 27.0p per share (2011:42.0p) to bring dividend cover back into the Group's target range
Strategic highlights
Continued to develop market-leading positions in sectors where we have a strong track record and can utilise our scale and expertise to deliver complex projects for our clients
Bidding selectively for quality projects and streamlined our business to match the expected medium-term workload
Invested cash generated from our construction activities in regeneration schemes to secure greater returns over the medium term
Utilised strong relationships with clients to secure repeat business and positions on frameworks
Sale of mature investments to recycle capital into new projects
Board Changes
In November, Adrian Martin appointed as chairman with John Morgan returning to position of chief executive
David Mulligan stepping down as finance director at end of February 2013 to be succeeded by Steve Crummett, formerly finance director at Filtrona plc
Outlook
Sound forward order book of £3.1bn (2011: £3.4bn) with projects at preferred bidder of £0.5bn (2011: £0.3bn)
Growing regeneration pipeline of £2.1bn (2011: £1.8bn) with £0.4bn (2011: £0.6bn) of opportunities at preferred developer stage
Focus on growing infrastructure sectors in which we have a strong track record and where there are high barriers to entry
Expected public sector land release will drive regeneration in medium term
Market will remain challenging in short term due to delay in economic recovery
John Morgan, Chief Executive, commented:
'2012 has seen a solid performance in what has been a very tough market. The newly structured Board is focused on managing the business tightly to ensure we emerge from the downturn in a strong position to take advantage of the opportunities we believe lie ahead. Our exposure to infrastructure continues to grow, and we see further opportunity to leverage our strong track record and gain market share. The momentum in our regeneration pipeline reinforces our confidence that returns from our investment will start to increase over the medium term and deliver superior returns.'
Dividend
The Board is proposing a final dividend of 15.0p (2011: 30.0p) giving a total dividend for the year of 27.0p (2011: 42.0p). This change to the dividend will bring it back into line with our stated policy of covering the dividend by adjusted earnings by between 2.5 and 3 times. We have been operating below this level of dividend cover for a number of years and the Board has now decided that it is appropriate to realign the dividend with this policy.
