Good morning, all. Nice to see you. Welcome to Galliford Tries' full year 26 results. I suppose just having a think about the video reel that you saw a bit up there and was running outside. It really, even now, still inspires me to watch the sort of stuff that we do all around the country every day and the contribution we make to the social and economic countries, the productivity of this country. I think it's fantastic. One of the great things about construction is you can see the fruits of your labour generally for the rest of your life and it's a great tangible thing that brings good people into the business and gives us a lot of job satisfaction. Okay, so here's the agenda for today, standard agenda. I'll do the highlights. I'll steal some of Chris's thunder at the front end, you know, and then he'll take you through the numbers in a bit more detail. I'll do a quick update on the strategy, then we'll go to questions. So the first thing is, everybody, you know, really pleased that we've delivered six now consecutive years of improvement in all of our key metrics. And I suppose the key message from this slide is that we're absolutely confident in that trajectory continuing into the future. All the ingredients are there for us to continue to grow that order book. We've got a long sort of line of sight into the future. We're well aligned with the government's priorities of where they need to spend their money and where we need to improve the infrastructure of this country. And that gives us huge opportunities going forward to produce the goods as we have done for the last six years and to have more capital allocation optionality in that time. So in a nutshell, we are very well on track for our 2030 targets that you see down the bottom there. OK, so here's the headlines. Very pleased you've all seen this already, I presume, on the RNS. But revenue up at £1.93 billion, up 3%. If you remember this time last year, we said revenue would be slightly flatter than the growth we'd seen in the previous years, and that's how it panned out. But still 3%. We're happy with that. More importantly, of course, because we are a bottom-line driven company, not a top-line driven company, much happier that the 3.2 at the half year is now 3.5 at the full year and up from 3% in the previous full year. So that's a really good performance and well on track, as I said earlier on, towards our 2030 targets. That produces adjusted PBT of £55.9 million, up 24%, and a really good full year dividend of 23.5p, which is up, again, similar sort of number, actually. We should have tweaked it to have 23.5% and 23.5%, really. But anyway, up a very similar number, 23%, 24% up on the same period last year. Cash has performed really well. £216 million of average month-end cash, up 21%. Cracking order book, and I'll come back to the order book in a bit more detail as to what's in it, but a really good, high-quality order book and, of course, the new £15 million shareback that we announced this morning. So all in all, everyone, we're in very good shape, very pleased with our progress, and I'll hand over to Chris to give you more detail on the numbers.
Thank you, Bill, and good morning, everyone. I'm going to leave the tweaking numbers comment in the past, I think. So, look, I'm really pleased to stand up here today and present our full-year results, and, as Bill said, to report a sixth consecutive year of growth. It's a hugely positive set of numbers, I'm sure you agree, demonstrating continued execution of our strategy and resulting in better-than-expected revenue growth, strong profit and margin improvements and continued 100% cash conversion. But before I get into the financials, let me talk about the Rise here, a project completed and handed over to the client in July. This tower adopted off-site construction, fabrication, modular integration and digital tools to enhance build quality and efficiency. This is Cardiff's new tallest building and what I've really liked about it, It's fitted into a really tight site between the mainline train from London and between major roads in the city. It's a really tight site, but it really demonstrates how our capabilities and innovations can make previously unviable land available for great construction. So turning to the financials and getting into a bit more detail through the P&L to try and help you understand the story of the year. As I referred to earlier, we have delivered revenue growth ahead of expectations at 3%, up to more than £1.93 billion. with the AMP 8 transition smoothly navigated and an exceptional outperformance from our highways team, giving us our sixth period of total top-line growth. And exactly as we predicted, both of our core divisions of building and infrastructure turned the revenues into higher profits through strong margin progression. At 3.5%, the divisional adjusted operating margin was up by 53 basis points, predominantly driven by commercial discipline and improved commercial terms in those newer frameworks, quality delivery projects from our risk management order book and a growing contribution from our specialist services businesses. And so the key point for me here is that the diversification of our chosen markets means we're in more control of our overall revenue and profit outcomes. Let me pick some highlights from the slide. Adjusted operating profit at £49.5 million increased by 21.9%, materially ahead of revenue growth. and there were no exceptional items in the year for the second consecutive year. The 53 basis point improvement in divisional adjusted operating margin is particularly encouraging for us and gives us further confidence in our operating model as we move towards our 4% margin target for 2030. Net interest income have increased to £6.4 million, up 45%, reflecting improved cash management on higher average cash balances. And as previously guided, the adjusted effective tax rate for the year was 25.0%, broadly in line with statutory corporation tax rates. And as Bill said, even after that higher tax rate, adjusted basics earnings per share increased by 23.1% to 42.4 pence per share. And this means that adjusted EPS CAGA has grown by 33% since 2021. We remain confident in delivering higher earnings going forward, and I will talk later about how we intend to use the cash we generate to drive accretive EPS accretion going forward. Moving now to our building division, the team have delivered another disciplined performance with commercial focus and high-quality operational delivery, driving margins to new highs. These strong profit results and an order book up more than 8% have been delivered against a backdrop of some delayed decision making, meaning some revenue has moved into 2027. This leaves left building revenues slightly down at £951 million for the year. But more importantly, adjusted operating profits increased by 17.8% to £33.1 million, with adjusted margins up by 57 basis points. This reflects the quality of our contract selection and bidding discipline, our risk-managed order book and the quality of work we've delivered across 94 completed projects in the year, including the rise at Cardiff, with total project revenues of over £700 million. As you know, we are selective in the revenue we take on, and delivering continuing and sustainable increases in profit and cash for our shareholders is the story here. and the order book does tell the forward story up nicely to 2.7 billion pounds driven by strong demand against defense and custodial high levels of work are secured for the upcoming financial year with 93 percent of revenue secured for 27 and 60 for the following year already as bill has said we are supportive of the new prime minister's intention to flee up planning regulation and to deliver on the government's new affordable homes commitments so all in all another strong year for the building division with all sectors in good shape and an order book that sets us up well for 27 and beyond. And it is a similar story in our infrastructure division where FY26 was a very strong year. The division comprises our highways and environment businesses and this includes our higher margin specialist and capital maintenance businesses. Revenues increased to £971.6 million, up some 7.7%. reflecting a smooth transition to Amp 8 and an exceptional year in highways. If we talk about highways for a second, they delivered three major projects open for traffic in the year. The Melton Mowbray Distributor Road, which you all now know as the Porkpie Way, is opened. The 8km Carlisle Southern Link Road and the A47 at Blofield Norfolk. These three projects completed some 12 miles of road, 15 major structures and finalised project revenues of in excess of £400 million at attractive gross margins. As I said, the transition from AMP7 to AMP8 was relatively smooth in the year, with environment growing revenues slightly where we had expected them to be flat. Looking forward to FY27, AMP8 project revenues are building now for both the main contracting businesses and for the smaller specialist water and capital maintenance businesses as early design work turns into construction and manufacturing work. Within the overall division, the mix of revenue will swing back to environment in FY27 as those highways teams move on to the earlier stages, the earlier lower revenue stages of their new projects. And this will have a flattening impact on the aggregated infrastructure revenues in FY27. In FY26, margins increased by 49 basis points, again to 3.5%. And this was driven by the quality first time delivery, improved commercial terms on our new frameworks, accelerated delivery in a long, hot and dry summer, which we all enjoyed, and the tidy closeouts on those major roads projects. Consequently, adjusted operating profit for the division increased by 25.2% to £34.3 million. And so I think, for me, the key thing to take from those two slides for building and infrastructure is that both businesses are now delivering 3.5% up from 3% a year ago. The forward elder book for infrastructure is held at £1.7 billion, weighting towards environment at £1.17 billion, with secured revenues for next year, or the current financial year, at 87%, and nearly two-thirds of FY28. And the ongoing commercial and operational discipline we have shown and the new improved terms on our AMP8 frameworks gives us confidence in margin progression going forward. If I turn now to our balance sheet, a slide you've all seen before, strong trading and continued discipline in balance sheet management have maintained a very robust cash position and increasing net assets. Year-end cash was £259 million, up 9.0%. The number I would really point you to is the average month-end cash at £216.2 million, up 21% on the prior year, broadly tracking profits. And the group continues to have no bank debt, no pension liabilities. Our £25 million RCF remains undrawn, and we're pleased to have taken the first options to extend this by year to 2029. The PPP assets, valued at £37.2 million, generated annuity income of £3.7 million in the year. and this is a portfolio of assets which generate strong cashback returns and there is a liquid market for such assets. We keep this portfolio under review and should we find a use for this capital with a higher return for shareholders we could look to divest individual assets as necessary. And lastly and no means leastly on this slide we are proud to and committed to paying our suppliers on time. With average days to pay at 27 days and 97% of invoices paid within 60 days, we are comfortably in line with fair payment requirements. And so, in summary, we maintain a straightforward, resilient and strong balance sheet, and this remains a key differentiator for our people, our clients, our suppliers and investors. If I turn now to the cash flow that supported the balance sheet, you can see on the left our FY26 cash bridge explaining the movements in our net cash over the last 12 months. Cash from operating activities was 56.1 million pounds including IFRS 16 lease repayments and that was ahead of our adjusted operating profit at 49.5 million pounds. Working capital was essentially neutral across the year at 0.9 million pounds of inflow. What this means is that the seasonal outflow that we reported in March reversed in full as it did in the prior year. Net positive interest income of £6.4 million, up from £4.4 million a year ago on higher cash balances. And putting together the trading cash flows and the other of minus £2.5 million, that gave us circa £60 million of net inflows. Against these inflows, we have invested £8.1 million against the Neen Valley Fire Acquisition that we announced at the half year. Alongside this, we've made shareholder returns of some £30.3 million, being £20.3 million of cash dividends in the year and the £10 million share buyback completed in April. Alongside this, we've made some smaller organic investments in our Keefley fabrication facility and in upgrading our commercial reporting suite of systems. These total £1.1 million. All in all, the total capital allocation in the year equaled £39.5 million, all generated from trading cash flows and representing some 70% of the adjusted PBT for the year. In the year, there was no corporation tax outflow, largely due to the use of historic tax losses. But as previously guided, we will return to paying corporation tax from 2027, as these losses have now largely been used up due to recent successive years of profitability. And we felt on the right-hand side, it was worth showing the aggregated cash flows of the last three years to demonstrate the consistency and similarity with which our model generates and uses cash. For me, the first key point here is the tight control of working capital. As you can see on the slide, over the three-year period, working capital has been a net inflow of circa £5 million. We feel this clearly demonstrates the high quality of our profits. We turn working capital into cash broadly every month, and we have done so for more than three years now. Secondly, beyond the prompt conversion to cash, the two bridges clearly demonstrate the broad range of our accretive capital allocation policy in play year on year, with more than £120 million of capital allocated over the last three years. And as we look forward to 2030, we're focused on maintaining this track record and then ensuring we allocate capital that we generate as optimally as possible. if we have a look at our capital allocation policy the first thing to say on this slide is our capital allocation priorities remain unchanged and you can see progress against each of these on the bottom half of the slide as i just discussed on the cash bridge and as we look to 2030 with a strong pipeline of work high visibility of revenues and our track record of converting revenues to profits to cash we believe we can continue to deliver sequential mutual cash performances that will give us plenty of capital allocation optionality. Let me talk you through our thinking here. We will continue to grow our sustainable dividend at 1.8 times adjusted EPS cover. That's a market leading cover in our sector. The 1.8 times cover represents circa two times cover on our normal operations and improves to 1.8x when we also return the annual interest earned on our PPP assets. Even after these dividends over the next four years, there will still be plenty of free cash flows to invest. We can do that organically for revenue growth, with examples in the last couple of years being our Paisley and Keefley fabrication facilities, and acquisitively in bolt-on M&A in higher margin adjacent sectors like our Neen Valley acquisition in February. We all know that M&A can be lumpy and there may be periods where there are fewer deals to complete or organic investments to make. In these periods, the mix of capital allocation activities may lean towards further incremental returns, typically through share buybacks. Either way, further EPS improvements are obtainable above and beyond our sustainable growth targets. It's also worth being clear that our decisions on returns of capital will be made whilst retaining adequate financial of capacity for the transactions coming through active M&A pipelines. We are pleased to have announced the 15 million share bike back today, but it's been made very much in line with these concepts. And so 2026 was a strong year for capital allocation with nearly 40 million pounds deployed. We're continuing to build our M&A pipelines and organic pipelines for the future. Moving on to M&A opportunities. I'd like to explain a little bit more about we're building those pipelines and what we're thinking, and our views on M&A can be expressed in three simple points. Firstly, we have the track record, capability, and experience to deploy capital successfully in M&A. We actively learn from previous deals, and we implement the learnings in our new deals. As an example of this, we are pleased to say that our recent acquisition of Neen Valley Fire is ahead of business case, and the integration is going well, with cross-selling underway and geographical expansion underway including the hiring of our first technicians in the northwest of England. Secondly acquisitions will be bolt-on and adjacent. We will only buy specialist businesses in specific sustainable markets where we already operate and where we understand the risk. We're focusing our efforts on a limited number of target areas. You can see on the slide in environment it's capital maintenance and water technologies and for specialist services, its fire protection, asset security and hard FM. These are structural but fragmented growth markets where our differentiation is that we have the client list to drive faster revenue growth and margin increases. Our team in Neen Valley Fire are really starting to benefit from this already. Thirdly and finally we'll be very disciplined about the process. Our active pipeline is regularly screening the sectors I've mentioned however deals will only be considered where they meet both our strategic, financial and operational hurdles. You've seen them before and you can see them again to the right of the slide. So simply put, our rigour and discipline in capital allocation decisions is matched by our rigour and discipline in contract selection. And we recognise for both of these, discipline remains crucial to all of our stakeholder communities. That being said, we are excited by the scale of opportunity in these spaces and how they strengthen the investment case of the group. turning to my final slide before i hand back to bill you know we look forward to 27 with some anticipation we expect similar levels of revenue growth and continued margin progression towards our targets and as the journey develops towards the black bars to 2030 we continue to believe in a simple and compelling story of sustainable and increasing returns generation based on that disciplined delivery of our proven model in our attractive chosen sectors and there's plenty of capital allocation optionality to be had on top. So we've taken another successful stride along our journey. Our ambition remains bright, and there's plenty of exciting road to travel in front of us. Bill will now take you through the operational side of the strategy of delivery in more detail. Thank you.
Okay, everyone. So a bit like Chris, you're going to see quite a few... Some of the slides you're going to see now, you've seen before. And I'm really pleased with this, because what it shows, is our strategy is robust and is unchanged, and our delivery is really consistent. So, let's just reprise the strategy in a nutshell. This is a one-page representation of the strategy. And we start on the top left there, growing revenue in our core businesses. So, that's building highways and the design and build part of water. This is the big engine room of Galliford Triad. This is where the vast majority of the revenues come through. And the ambition there was to grow those businesses in advance of inflation and get them to 3.5% and beyond. That was our original plan back at 20, when we set out on the strategy. And we're making good progress here, as you've seen today. Next one there is to grow our specialist businesses in the higher margin adjacent markets. Chris has touched on some of those. These businesses are doing well. These are the water tech businesses, so manufacture of high-tech bits of kit in the water and wastewater industry, and then hard FM, fire security, things like that in the building part of the business. These are all higher margin businesses, and as we grow them and they are doing well, then the mix starts to change and that's what helps to drive us from the three and a half up towards the four. We re-enter the affordable homes market. Now we all know that this part of the market is probably 18 months, perhaps even a bit more behind where we all thought it might be but what we do see here is a bit more impetus now. We've all seen the £10 billion funding that's been allocated in the last couple of weeks. Prior to that there were some planning issues, there were some fire safety issues, viability issues which are improving, I think, would be the right thing to say. So I do think that the £10 billion now allocated will provide a stimulus to the affordable housing market overall, and I expect to see a bit more action there over the next six to nine months, I suppose. And then Chris mentioned the further bolt-on acquisitions, the possibility of those, and actually the acquired companies. If you take a company like Neen Valley Fire and you give that business access to our client base, our geographical base, our offices all over the country. That's a really, really good foundation for significant growth. And that's the simple philosophy of how we take higher margin, bolt-on acquisitions, give them access to our client base, our geography, our offices, and really grow them in some style. And when we do all of that, we continue to grow our earnings, our capital allocation optionality, our returns to our shareholders. So that's it in a nutshell, everyone. Unchanged now for some time. And then we talk in a bit more detail about how we carry on moving up towards the 4% margin. So pleased to say that last time I was standing up, it was 3.2% and before it was 3. So the left-hand side is improving and starting at 3.5%, which is nice, and the target is still 4%. And we're making good progress, as you can see. But these stepping stones, as we call them, haven't changed one iota. And I'm going to go through these in a bit more detail in a minute. But before I go through that, another slide you've all seen before. I just wanted to remind you of the philosophy of how we run the business, because I think as we grow, maintaining the discipline of why we've done so well is really, really important. So the simple philosophy is we start with a core of brilliant people. We've got 4,300 plus very good people in Galliford Tri, and around those people we put strong discipline of culture, of process, of risk management, and being very selective about what we do and what we don't do. and having the courage to walk away from projects where we don't think they're the right projects for us. What that means is that everything in our 4.3 billion pound pipeline is work that we can execute day in, day out with the right people in the right areas, with the right supply chain, with the right clients and so on and so on, which means that we perform consistently as is reflected through our performance and our numbers and we continue to strengthen our already strong balance sheet. And so the wheel turns. And that's the simple philosophy of how we run the business and that will absolutely remain. Going back to people, I just want to put a bit more colour around people because we spend an awful lot of time and effort making sure that we can retain those 4,300 good people and attract more good people to Galliford Tri to sustain our growth. So here are just some of the things that we do. I won't go through all of them. 85% employee advocacy score. So every year we do an employee engagement survey and we're really pleased that 85% of our employees think Galliford Tri is a great place to work and would recommend that to their peers and their friends as a great place to work, which is a really strong score and well above the industry average I hasten to add. 45 career moves is interesting. So that's just in the year. Overall, through our Explore program, we've moved 154 people around. And this is simplistically, if somebody wants to move geographically into a different business sector within Galliford Tri, they can do that. If somebody's partner gets transferred to Scotland and they want to go to move, then they can go and transfer to Scotland with Galliford Tri. They don't need to leave. So it's about retaining good people and making sure that, and we operate pretty much everywhere through the UK, so this is a really good programme. So that helps us to retain our good people. We promoted broadly 10% of our people in the year, which is fantastic. So people see career opportunity with Galliford Tri, and people do get, in the industry I'd say, not just with Galliford Tri, a lot of responsibility pretty young in the construction industry. So people do get a lot of job satisfaction, as I said right at the start, through the construction industry. and we really push that in Gulliford Drive. 10% of our people are in some... ..on early careers, as it's defined, so in some sort of training. Graduates, apprentices, degree apprentices, trainees, people like that. And that's a very high percentage. So, you know, the emphasis there is on growing our own, growing people from within, and it's really good to see. And those people, going to the last one, number one, Those people vote unprompted by us, Mabita. They vote through this job crowd. They vote us number one in our sector for apprentices and for graduates, which is really nice to see. So a lot of emphasis on our people, everyone. So going back to the stepping stones, the first one is about volume and growth and so on. You've seen the slide before. We haven't changed the numbers, but this is just to demonstrate there's a mountain of work out there in social and economic infrastructure. which are both in the public sector, so taxpayer-funded work, you can see up on the screen, but also bill-payer funded, so in the regulated industries, water and energy and so on, where we pay the bills, there is a mountain of work out there. And there's not a lot of optionality in here. A lot of this work just has to be done. You know, we've seen in this last summer, we've seen drought and hosepipe bans and train derailments because the lines are warping and so on. And, you know, in five minutes' time, there'll be flooding and all sorts of things. So the bottom line is our infrastructure has to be more resilient, and there's very little optionality about having to do a lot of this stuff, which is, of course, all encompassed in the £725 billion of CapEx funding that was announced last year and RingFence. So just a nod to the volume of work out there, everyone. So that leads, of course, to our order book, which is in really good shape. 95% of the order book, as you see there, is in the public sector and 5% in the private sector. It waxes and wanes a bit, but it's something like that normally. We always go into a new year with 90-odd percent of our work in hand, which is really good from a number of perspectives. We can obviously get all our ducks in a row in terms of people and supply chain and materials and so on. But also in terms of risk management, when you've got a very full-odd book, there's no need to go off and do things that you shouldn't do. So that nods to both of them. But more importantly to me on this chart is full year 28 and full year 29, because we already can see, you know, these numbers are a few months old now, so they'll be a bit different now, a bit higher. We can already see, you know, best part are two-thirds of full year 28's work already in the bag and heading towards half of full year 29's work already in the bag. So that's really, really good in terms of this long line of sight for the business, keeping this bar wave of work ahead of us at all times. I've said to some of you before, we already have clients in the water industry talking to us about AMPS 9, 10 and 11. That's 2030 to 2045, and looking forward to getting a quality supply chain in place now to sustain the enormous growth that we forecast going into AMP 9. We think AMP 9 is going to be considerably bigger than AMP 8 already. So a very good position with regards to the order book, everyone. I'm not going to go through all of these, but just to point out that the jobs that we win, and these are changing every single day, But when you run your eye through the list, you see defence, you see education, you see affordable homes, energy, water, specialists. You know, it's across the board is the point I'm making here. And then we go into a better contracting environment. We've spoken about this quite a bit, about clients are procuring in a far more mature manner for long-term value and long-term collaboration and efficiency, I hasten to add. and this leads to what you see up here, that 99% of everything we do is negotiated in one form or another. So once you're on the frameworks, and you do need to be on the frameworks first, of course, most of the work is negotiated. So the red is target cost, cost-reimbursable work, mainly in the water and highways business infrastructure. The black is two-stage work where you're appointed in the early stage and you negotiate a final price. You do end up at a lump sum fixed price through negotiation and that price includes inflation and risk and all those sorts of things. And then in the light grey where clients just ask us to come and negotiate something and get on and do it. So that's a really good place to be, everyone. Secondly then, we've talked in the past about quality price split and typically it's 80, 20, 70, 30 in favour of quality. And what the government is saying now in terms of government projects, the public sector projects, is that the social value element of the quality mechanism will rise to up to 20%. It was 10% previously. So that's fine by us because we put a huge amount of effort into social value. And there's a slide here, and again, I'm not going to go through all of these stats, but social and economic value in the locality of where you're working is simply around employing people locally, training people locally, employing local companies to do work, things like that. And there's a formula which the government mandates that we measure, So we measure here 39 of our projects with a value of more than 5 and that completed in the year achieve that £527 million worth of social and economic value in the locality. And you can see there the sort of things that we measure. I won't go through them all, but jobs, training, access for young people to come and have a look at construction, things like that. And you know something, it's the right thing to do. People love doing it, our people love doing this, and it helps us to win work. okay operational improvements um i won't go through all of this but we've said in the past that um the sort of technology that we use in terms of 3d modeling and 5d modeling uh the fact that we can build things in 3d and in virtual reality you can walk through buildings and hospitals and prisons and whatever you can debug them you can tweak them you build them half a dozen times in virtual reality so when you go and build them in reality you get it right first time Therefore, our rework costs are lower, we are more predictable in terms of program, et cetera, et cetera. Lots of small accretive sort of incremental improvements, which you can see reflected through our numbers. And the only probably newer one and more germane at the moment is bottom left is AI. So we are starting to use AI in a very considered and circumspect way, I hasten to add. We're using it at the front end to help us sort of condense documents and scan documents and things like that. We're using things like safety, whereas before you might have to go through a process and understand what you need to do to do a certain task. Now you can push the button or talk to it, and it'll say these are the things you need to do without having to go and trawl through the processes. So it is still in its infancy with us. My personal view is it will help us to be a bit more efficient, a bit more productive, but we are pretty circumspect about how we're implementing it and we're testing it very thoroughly with human beings before we trust it too much. so that's operational improvements and then we move on to the last one which is really about higher margin work so you might wonder why I put the frameworks up there but the real story I want from this slide is we target frameworks for all the things we've talked about in the past the long line of sight, long client relationships ability to innovate and to be more effective for our clients to drive costs down without driving margins down a few years ago this slide was entirely green Now, when you look at our strategy, which is about grow the big businesses, that's the green, grow the specialist businesses, that's the blue, and grow into affordable housing, that's the orange. And the scale is different, obviously, to fit them all in. But what we've done is we've maintained the quantum of the green, and over the last couple of years we've got a really, really good presence in the specialist business frameworks and in the affordable housing frameworks. So you can't just get on a framework. You have to wait for them to mature. You have to wait for them to be renewed. So it's a never-ending process, really. But the real story I wanted to get you across in this slide is that the framework presence now reflects absolutely the strategy. That's the simple message out of this slide. And it's much the same in water on a more granular basis. You can see there that in 2021, we had eight design and build frameworks in water. And then through all the acquisitions that we've made over the years, We now work for every single of the major water companies in the UK for an average of 19 years. But you can see there on the left-hand side how we've improved our presence in water. So not only in the big designer build frameworks, but more importantly in terms of the higher margin part of the strategy, the grey bits there, capital maintenance and water technologies, where we've gone from nothing to a very good presence in both of those higher margin areas, which really are going to help us drive through AMP 8 and more into AMP 9. So a good story there in terms of the framework presence underpinning the strategy. And then this is just a little infographic to show you. The top bit is wastewater. Sorry, there's water in the bottom of waste water. That would never happen in reality, by the way. But as an infographic, it's just to show you where we operate in water and wastewater. So the dark grey bits or black, whatever colour that is, is where we currently have full capability in water. And the red is where we interface and we have some capability in water. But the real message I wanted to get across here is as we continue to develop our water business, as we continue to probably buy a few more bolt-on acquisitions in the sector, we expect to get more and more end-to-end capability, which will be really good for our clients, for us to provide good services and efficient service to our clients. so finally everybody in summary we've had a really good year very proud of another good year thanks again to all of our people for all the hard work they put into to get to these numbers we you know making really good progress with our 2030 targets we've got a great bunch of people a great order book the market is really really supportive and we've got a strong balance sheet which supports further returns to our shareholders of course and capital allocation optionality So that's it. Thank you very much. We'll go to questions.
Morning. Greg Poulton from Sanger Capital Markets. Just a few for me, please. On M&A, obviously the messaging seems to have stepped up a bit there. Could you just talk about if there are any specific sector focus where you're primarily focused on acquiring? I know it's the adjacent sectors, but that's quite a wide net. Where are you sort of seeing the most opportunities coming?
The answer is it's sort of, as Bill showed on that sort of infographic, it'll be the vertical slide. So Handbaker will build distributor arms. You can see those going around. We'll be picking individual bits of capability across clean water and wastewater. So it'll be products and manufacturing, I think, will be the particular targets we sector. Then we'll look at capital maintenance businesses as well there. In terms of sort of the building ones, more fire businesses. As I say, these markets are very fragmented. So, you know, we're looking to grow organically across the UK. But if a business, a fire door business came up in Scotland, we might consider that in Edinburgh or Glasgow, for example. Active fire, you know, we're trying to build out a sort of full fire service offering. So in the same way in water, we're trying to get to full service offering across water. We'll try and build our capability and maybe suppression, maybe active fire as well. Hard FM will sort of be more of the same. So those sort of sectors as you'd expect.
And then just on water, obviously there's been a lot of design work coming through this year. Could you talk about the expected ramp-up in construction work as FY27 progresses?
Yeah, that is happening. I mean, it's a natural progression, isn't it, Greg, as you go through? So we're seeing that now, and we're also seeing an uptick in orders through the water tech businesses, which also goes through a little bit of a modulation as you go through the amp transition process. So we're seeing that ramp-up as well. So it's all panning out as expected, I think, into AMP8. I think more importantly, you look at AMP9, and you see even more work coming through AMP9. The nature of it might be slightly different. We expect the capital maintenance aspect of AMP9 to be significantly bigger than AMP8, and that's natural, I suppose. The assets are getting older. They need more TLC to keep them going until they can be renewed.
I'm going to put some numbers on it. The original eight frameworks you saw on that slide were probably £100, £120 million worth of revenue. We bought about another £120 million of revenues through the acquisitions, the full water acquisitions. So call that 250, and we've disclosed, we think, sort of through the peak of Ampate, we'll be doing 600 million-ish. So that's the sort of scale of growth that we've delivered through those acquisitions.
Can you say your name away from?
Good morning, Andrew Nussi from Peelhunt. Two questions, if I may. First of all, on water, and you're engaging with clients with a view to AMP 9, 10, 11, as you so said, they're keen to build their supply chains. How are you able to build your supply chains to ensure that you're in a position to deliver over that longer-term horizon? And secondly, in terms of the margin bridge, How much more of an influence do you think the better contracting environment is going to be in your overall goals?
With regard to supply chain, so what we're doing is, firstly, we continue to be an attractive employer. So you saw the stats up there. The supply chain like our strong balance sheet. They like our framework presence. They like the fact that Chris pays them in 27 days. So we are a good employer and we are attractive to the supply chain. And that's really important that we maintain that. What we're doing is we're setting in place more and more back-to-back agreements, Andrew. So we already have a number of back-to-back agreements through plant hire and things like that. What we're doing now, and it's more regional because the type of companies often that we want in a back-to-back range are more regional suppliers. So if you took somewhere a bit further away, let's just say Wessex Water for this example, We'll be talking to some of our suppliers in Westswater about a back-to-back framework through AMP 8 and possibly to AMP 9 so that we can secure that supplier and that supplier can invest as well in people and plant and whatever it is they need to do. So we are trying to get more and more back-to-back agreements into place with that regard.
Just to follow up on that point, does that change at all if there is more of a shift in AMP 9 to capital maintenance activity?
It might, but I think the underlying, the capital maintenance will be in addition to, not instead of, I think, Andrew, so it'll just be agreeable.
And I've forgotten your second one, because I'm going to write it down. The better contracting environment is a sort of margin driver over the sort of medium term, because it feels like we're already in a good contracting environment.
We are. I mean, as I said, we saw this bit of a modulation between the amps for the specialist manufacturing businesses. That's picking up nicely now. But, you know, the strategy is working out well. And we see significant revenue growth in those specialists over the next few years. And therefore, the mix will start to move. So we think that it's going to evolve pretty much as we forecast.
Operator
Good morning. Joe Brent from Pamela. Three questions, if I may. Firstly, Andy Burnham, what are your first thoughts? Have you seen some delays in government procurement as there's been that inevitable reshuffle of ministers? You seem to have good energy. Are you feeling that in your businesses? Secondly, could you tell us a little bit more about the trajectory in roads, highways? Clearly a very strong FY26 and clearly going forward environments can be stronger, but interested just maybe to get some rough numbers around what's happening in highways. And thirdly, on capital allocation, And I guess you've got a pretty good sense of your organic investment. If you bundle M&A and buybacks together, both in FY26 and over the last three years, you've tended to spend 10 to 20 million on buybacks and M&A. Is that the sort of number you'd expect going forward? And obviously, we're not going to model that, but we should be thinking about it in terms of accretion over and above the growth you're expecting.
So I'll take the first two and you can take the last one. So, Mr Burnham, well, he seems very quiet, doesn't he? But I think the important thing for us is we've seen action on affordable homes, as I said a minute ago, which is welcome. Not before time, too, I would say, but nevertheless welcome. Let's see what happens on the 28th of October, of course. But what we see a little bit, Joe, every time there's some sort of political activity, like a new leader, We see a little bit of public servants just sitting on their hands a little bit, waiting to see which way the wind's going to blow. So we do sometimes see some minor delays creeping in, the projects slipping a bit to the right. But nothing of any substance, really, and they all come back later. So that's what we see so far. Overall, I do think things feel a little bit more positive. But I do think we need to get past the 20th of October before we know what's going to happen. It's pretty obvious. Roads trajectory, it just shows how, you know, in some parts of the business we are still wed to the weather. So the roads, if you remember, the first two months of this year didn't rain, didn't stop raining for two months. Luckily you don't do much earth moving in those periods anyway in roads. But since then, to the dismay of the water companies, it hasn't rained enough, which means that we've had a cracking year in roads because you can actually make hay, you know, nothing's holding you up because normally weather holds you up on roads. So that is, I'm being a little bit blasé, but that's a factor behind the roads, as well as, of course, great performance by our people. So we have a little bit of a, because those jobs are finished a little bit ahead of time, there's a little bit of a hiatus until the next ones kick off. We've got a really good backlog in roads. And remember that it's probably less than half of our backlog in roads now is national highways, and the rest is in local authority roads.
So we've got a really good order of backlog. it's a bit like the AM transition really it's in the design phase and we'll kick off on the ground shortly and get moving so we expect that to recover quite quick On capital allocation I think you bang on the money I mean I think the difference in terms of free cash flow if I use that phrase that we all know between 26 and 27 and beyond is the corporation tax point we've used up those historical deferred tax losses so we'll have to pay that going forward but we're happy to do that, let's be clear on that So yeah, but 20 million, that sort of range. As you see, we're at the top of our sort of tram lines that we talk about as well. So there is room to manoeuvre in the tram lines. If something a little bit more exciting turned up, there's room for that as well. Max Hayes.
Hi, guys. Max Hayes from Cavendish. Just two questions, if I may. So the first one is just sort of you went through digital. I'm just wondering a bit more colour on sort of the areas that are now well established and sort of what other areas that you think sort of can drive that further margin accretion towards the 2030 targets? And then the second one's just an affordable homes. So you've made good progress getting onto frameworks. So is it now about sort of just executing on those frameworks, or is there sort of a lot more to go after?
So digital, I mean, this is a... It never ends, Max, does it? You know, if you go back a few years, we would take a 2D drawing of a building, and we'd build a 3D model, and it was quite expensive and time-consuming and not all that useful, to be perfectly honest with you. Now, everything is designed in building information modelling. It's all designed in 3D. It's all sort of automatically. You can go and play with it virtually. You can get your supply chain to come in and input into the model. It's a really interactive, really powerful tool. So things that we dreamt about a decade ago are a reality now, and that'll just carry on progressing. So I think that, you know, I've said before that the language of construction over the next few decades will change from construction to assembly and modulisation and things, words like that. And I do think that will be more of a trend. But it'll never, you know, you can't build a road, for example, in a modular way. You might do the bridges or something like that, possibly, but there's some things in construction that will always have to be done sort of the old-fashioned way, if I can use that term. But the technology is moving so fast, it's fantastic. So I think that technology will continue to have an input into what we do. You know, now we fly drones. Rather, we used to send people to measure things up and do surveys of sites. Now you just fly the drone over, does a point cloud survey to a millimetre accuracy. I mean, it's fantastic, the tech. It's absolutely brilliant. So I think that will continue to evolve. How, I don't know. But it will continue to help us to be more productive. and then affordable housing I just think that the impetus is there so we've got our first one on the ground in Chester we're talking to some of these registered providers about some more as we speak and I think the sort of flood I wouldn't say that's probably too strong a word but there will be more of these things starting to come through now the interesting thing is that some of that allocation was to councils which is the first time that's happened I think since the second world war or something so it will be interesting to see what those it's not a huge amount of the 10 billion by the way but it will be quite interesting to see what the councils do because they're probably not quite used to or prepared for how to go about spending that money intelligently. Great, thank you.
Alistair Stewart, Progressive Equity Research. A couple of questions. One on your progression to 4%. If you look at the order book, look at incoming orders as opposed to the backlog, are you close to or even at 4%, and it's a case of the backlog moving out over the next couple of years. In other words, are you going to get there earlier than 2030 is the blunt question. And secondly, can you give an idea of the quantum of the delayed orders in building and maybe put a bit of colour on, I've forgotten the quote there, macro uncertainty among the public authorities.
So if I take the second one first, Alison. I sort of answered that earlier on. That's just civil servants sitting on their hands a bit while they're waiting to see which way is up. It's in the roundings. There's nothing to worry about. I don't lose any sleep over that at all. Yes, it is, yeah. Going back to the first one, look, you know, I think we've established a bit of reputation for setting targets that we expect to be able to achieve. And if we achieve them early, so much the better. So we are making good progress towards the 4%, you know, and maybe this time next year we'll be making even closer progress. So, you know, and when we get there, we'll tell you what comes next.
And is it beyond the bounds of possibility that for a third year you can make a 50 basis point jump?
Well, we'll see. But we're in good shape. We're in very good shape. As I said before, we've got a cracking balance sheet, we've got a cracking order, we're cracking a bunch of people in a big market out there. So, you know, we're in good shape, Alistair. And the fact that we can use some of that firepower to invest organically or make further Bolton acquisitions and you get further EPS accretion through that as well, of course. So, no, we're in good shape. And if we get there early, then that'll be great. Steve, Colin.
Colin Smith from Capital Access Group. Three if I may. You sort of highlighted about 300 billion's worth, I think, of infrastructure potential spend over the next 10 years. Could you just talk a little bit about what you think the actual constraints to the growth rates that you're currently delivering are and whether you could do better than that on a more on a more structural basis first question second one with the growth of the higher margin add-ons and their continued development within the Galliford Tri structure do you think the risk structure of the bit or the risk profile of the business has changed from where it was in any material way and if so how and then the final question is just to sort of understand what you think the kind of or how we should think about the kind of maximum amount of cash the business would like to hold just to try and get a feel for where you think you might be holding excess cash that might come back by way of special dividends as we've just seen in the announcement today thank you thanks colin so constraints interesting so it is an enormous number, Colin.
But to be fair, it's always been an enormous number. And in the industry, when you've had big one-offs like the Olympics, for example, or Hinkley Point C or HS2, there's angst about the size of the supply chain and et cetera, et cetera. And without signing blasé, supply and demand seems to come into play and work. So from our perspective, though, it's about risk. Could we double the size of the business? possibly but would we want to double the size of the business probably not so it's all about making sure that in my view that that you never bite off more than you can chew that you grow the business in a civilized manner with the right people in the right supply chain the right foundations to make sure that you can grow and continue to succeed because you know growing a construction business is easy growing it profitably is less easy so so for us yes the market's big but We will remain very disciplined as we grow into that in accordance with our strategy. Risk profile in the high-margin businesses, it's just different, I think, Colin. So some of these businesses are manufacturing businesses where they've got factories that manufacture pretty high-tech bits of kits, so they have orders coming in and so on. What we see, so for us, that is a slightly different mindset, I suppose, from a contractor's mindset, if we can put it like that. So we have a different set of people that come from manufacturing backgrounds and business development backgrounds to make sure that we aren't putting a contractor's mindset over a manufacturing business, if I can put it like that. So the risk there is about utilisation, really, of these bits of kit, and I think we're pretty well-sized at the moment. In saying that, we're just about to double the size of Neen Valley's premises. We're just about to double the size of Lintot's premises in Coventry. We've opened two new fabrication facilities and we are probably eyeing another one down the M4 corridor sometime soon. So we are making sure that where we see demand and it's long-term demand, we can cater for it. And remember, when we look at our specialist businesses, we buy bits of kit from those specialist businesses so we can provide them with a foundation that's really solid and then we sell bits of kit to our competitors and we sell bits of kit to our clients. So the risk profile is a bit different because it's manufacturing, not construction, but we come at it with the same sort of mindset, a conservative mindset, that we want those businesses to be running at a high degree of productivity all the time. We don't want a big factory that is half empty. We'd rather have a smaller one that's always busy, if that answers the question.
If I take the third question, I think the two questions are very much interlinked. The order books, as Bill says, are shorter in those businesses, but because they're adjacent, we can feed work to them. So perhaps if there was a fallower period, And we debate how much of that self-feeding work we should do. Actually, we want to self-feed some of it. We want to sell, as we do, to our competitors. We want to sell to third parties as well. So where the mix of that sits in the business. But if one of those dips, then maybe we can... So we can self-control how we manage that risk. I think, overall, the thing that I really like about what we've done over the last few years is we've grown volumetrically. Our biggest projects are not particularly growing. Yes, there's some inflation through them, but we've grown volumetrically. So every job becomes a smaller percentage of the whole. That helps the de-risking that we've talked about. And therefore, we also feel we don't need to keep growing cash. And so we have the tram lines, as you know. It used to be 8 to 12. We've been nudging them. We don't formally write these on targets, but we're nudging those down towards 7 to 11. We've been communicating that for the last 12 months. Even at the current cash number, at the year end, we were probably top A on that. But that's why we're leaning a little bit more into M&A and into returns in this presentation today. And that's the key point. We can deploy that cash, and we've got enough in the firepower. And as I said, we will make cash return and shareholder returns decisions based on what's in our active pipeline, and we expect to come through. So it may not always be obvious to you why we have or haven't made a return, I guess, but that'll be because we're very conscious about the cash that we see we need in the future to really access those incremental EPS opportunities that we see in front of us. Stephen, the microphone for Stephen.
Hi, Stephen Norlandson from Applied Value. I'm just intrigued with what's going on in the investment business. So can I just ask four questions about that? Firstly, the loss in investments, 1.8 million higher this year than last, 2.2 million. Can you just help us out a little bit as to why that increased so much? Secondly, you've got preferred bidder on five PRS projects. Can you just talk about the capital that might be needed over the next few years from you as your part of the ventures there and how we should be thinking about that? Thirdly, will you actually build them yourselves? Is that the intention within the preferred bidder? Because obviously this is an area where historically margins have been well above the average for building. So if you are going to get successful on this, then obviously that will help with the margin accretion you've described. And the fourth one is probably a little bit blue sky. But are you expecting to add these to the portfolio or are you expecting to sell them? What's the thought process at the moment from the board's point of view?
OK. Do you want to take the first two? Do you want to take the second two, then?
I think the simple way to say is actually the market's pretty much slowed down. These things are quite difficult to get away viably at the moment with bond rates being as high as they are. So in the reality, what you've got is a little less revenue going through because the projects are going through the building or building planning or fast safety, so there's a little bit of stuff slowing down there. And the reality is we're trying to keep that team together because we do see the money coming through for affordable housing. So we're keeping the team together. So the reality is, and we're doing some development work on the five projects, so you're still incurring some money. And we don't put that on the balance sheet. We'll take it as we have it, because if they don't come on, they don't come. So it's a prudent view of the number. That's how we would say it. But should those five deals come through, there'll be plenty of opportunity in the future. The cash, the capital we put into in our model is actually very limited. It's sweat capital mostly. We might take an option on the land. That might be £50,000 or £100,000. It's not big bucks, maybe £400,000 of sweat capital. You'll see in that £2.2 million, effectively. That's what we do. So they're not significant. And then Bill will talk about the ongoing thing, but actually the build is typically funded by the party that will eventually run the building. So the capital need is actually very low.
So what we do actually, Steve, is we'll do the plan permissions and all the statutory permissions we need. When that's done, we'll sell it forward to a number of people who buy these sorts of assets, and then we'll build it for them. So we get profit on the upfront sale of the development, and then we go and build it and, as you said, make better profits. When you put those two together, we make broadly double our standard construction margins. So we built the photo you saw there, the rise. That's exactly the model we used there. We bought an option on the land. We designed it. We sold it forward. it, we built it, and we handed it over on time, and it's been a really successful project. So that's the model. So the PRS team are basically the old PFI, PPP team, because the same front-end skills are needed to do these things, and it's the same front-end skills needed for affordable. So that's a really, really good team to have in place, and they do a great job. Just going back to the investments, it is quite lumpy. If you sell or do a deal the day before, the day after, it's going to... So, it's in the round, it's here. Any more questions? Anything on the wires, Esquire?
I'll move in a minute ago.
Operator
Let's chat one more time.
No, no questions on the wires.
Well, thank you all very much for coming. Nice to see you all in the flesh for the first time in a long time. And we'll sure speak outside. Thank you very much.
