GALLIFORD TRY PLC

PUBLICATION OF ANNUAL REPORT AND FINANCIAL STATEMENTS 2018 AND NOTICE OF 2018 ANNUAL GENERAL MEETING

Galliford Try plc has today, in accordance with LR 9.6.1 R of the Listing Rules, submitted to the Financial Conduct Authority's National Storage Mechanism copies of the following:

·      The Annual Report and Financial Statements 2018

·      Notice of 2018 Annual General Meeting

·      Form of Proxy for the 2018 Annual General Meeting

The documents will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

The Annual Report and Financial Statements and Notice of Annual General Meeting are also available on the Galliford Try plc website at www.gallifordtry.co.uk/investors/reports-and-presentations/2018.

A condensed set of the Group's financial statements and information on important events that have occurred during the financial year and their impact on the financial statements were included in Galliford Try plc's Final Results Announcement on 12 September 2018.  That information together with the information set out below which is extracted from the Annual Report and Financial Statements 2018 constitute the material required by DTR 6.3.5 of the Disclosure Guidance and Transparency Rules which is required to be communicated to the media in full unedited text through a Regulatory Information Service.  This announcement is not a substitute for reading the full Annual Report and Financial Statements 2018.  Page and note references in the text below refer to page numbers and note references in the Annual Report and Financial Statements 2018.  To view the results announcement, slides of the results presentation and the results webcast please visit www.gallifordtry.co.uk/investors.

Principal risks

Managing risk and uncertainty to deliver business performance

The ability to identify, assess and manage risks and uncertainties is critical to achieving our strategy of sustainable growth and is an integral element of our management processes.

Our approach to risk and internal controls

Risks and uncertainties are inherent to the markets in which we compete, the regulatory environment in which we operate and the operational activities we perform in pursuit of our strategy. Our risk appetite, defined as the nature and level of risks that we are prepared to be exposed to, is discussed and agreed by the Board and is expressed in our Group strategy. This attitude to risk is then applied by the businesses and business units in their annual business plans and day-to-day operations. For example, at Group level, we have stated that we will not bid for large, fixed-price construction contracts that carry an unacceptable level of risk. At the business unit level, this appetite informs how opportunities are assessed and is enforced through the governance and review controls over bidding.

The Board also has overall responsibility for maintaining oversight of the Group's processes for identifying, assessing, managing and reporting on principal risks and the system of internal controls designed to manage them. The Board has reviewed the principal risks and uncertainties, including those that would threaten its business model, future performance, solvency or liquidity, together with the key mitigations in place, and the most significant risks are presented on pages 24 and 25. There may be other risks and uncertainties besides those listed which may also adversely affect the Group and its performance. In addition to the ongoing processes for monitoring our principal risks, during the year, the Board also carried out a comprehensive assessment of the general risk factors relating to the Group, which were included in the rights issue prospectus.

The Audit Committee has reviewed the risk management process and internal control framework, together with the findings of the Internal Audit function over the past year, which may indicate weaknesses that have had, could have had, or may have in the future, a material impact on the results, and remedial actions taken. Based on these assessments, the Board is satisfied with the effectiveness of the Group's systems of risk management and internal control.

Risk management governance structure and process

The Group's risk management and governance structure, as shown below, highlights the way in which risks are identified, reported and managed within the frameworks set out by the Board. It is designed to facilitate both a bottom-up and top-down view of risk. The Board has delegated implementation of risk management and internal control, together with their day-to-day operation, to the Group's Executive management. The process is overseen by the Executive Risk Committee, which is chaired by the General Counsel and Company Secretary, and is managed on a day-to-day basis by the Director of Risk and Internal Audit. The Risk and Internal Audit function plays an integral role in facilitating the identification, reporting and management of risk throughout the governance structure.

Each business unit maintains a risk register, which captures the principal risks applicable to that business, the key mitigations in place and what further action is required to manage the risk. The business unit Board reviews the risk register twice a year. One of these reviews is facilitated by the Group Risk and Internal Audit function and includes an assessment of the likelihood and impact of each risk using defined risk assessment criteria and interactive voting software. The same methodology and review process is used to identify and assess the key risks at a business level.

The Executive Risk Committee meets three times a year and reviews the latest versions of each of the three business risk registers. Following each Risk Committee, the Group risk register is updated by the Director of Risk and Internal Audit and reviewed by the Executive Board and plc Board.

The Audit Committee is responsible for keeping under review the adequacy and effectiveness of the Group's risk management processes and systems of internal control, and for reviewing and approving statements included in the Annual Report concerning internal controls, risk management and the Viability statement.

Internal control framework

The day-to-day management of our principal risks is supported by an internal control framework which is embedded in our management and operational processes. The most significant elements of the Group's internal control framework include the following:

Organisational structure: each business unit is led by a managing director and management team providing a clear hierarchy and accountabilities.

Code of Conduct: the Group promotes a culture of acting ethically and with demonstrable integrity. Group standards are set out in a Code of Conduct which is communicated to all employees and supported by specific training modules in key areas.

Contractual review and commitments: the Group has clearly defined policies and procedures for entering into contractual commitments which apply across its business units and operations and are enforced through the Group's legal authorities matrix.

Investment in land and development: land expenditure approval is subject to clearly defined policies and procedures, with significant investments approved at Executive Board and Board levels under Group policies and procedures.

Operational activity: site operations are performed in line with established business management systems and processes that incorporate all operational activities, including health, safety and environmental procedures, regular performance monitoring, quality management and external accountability to stakeholders.

Financial planning framework: a detailed annual budget is prepared for each financial year, which is approved by the Board.

Operational and financial reporting: an exacting profit and cash reporting and forecasting regime is in place across the Group. As well as the emphasis placed on cash flow, income and balance sheet reporting, health, safety and environmental matters are prioritised within monthly operational reports.

Internal Audit: the Group Internal Audit function develops and delivers an annual programme of internal audits, which includes business unit key controls reviews, audits of business and Group processes and targeted risk reviews.

Assurance provided by non-audit functions: a number of other Group functions provide assurance in areas including, but not limited to, health, safety and environment, legal contract reviews and compliance, and construction industry regulation.

Pension plan administration: review of the funding position of the Group's defined benefit pension scheme and consideration of cash contributions by the Group are the responsibility of the Board. The administration of the Group's fully closed final salary and ongoing defined contribution pension plan is outsourced to professional service providers. Each of the final salary schemes has an independent scheme secretary and a proportion of independent trustees to provide additional layers of external scrutiny.

Viability statement

In accordance with provision C.2.2 of the UK Corporate Governance Code, the Board has assessed the prospects of the Group over a period of three years in line with its typical business planning and risk management review period.

The Group's budget includes information in relation to the Group's revenues, profits, cash flows, dividends, net debt and other key financial and non-financial metrics. The plan considers the potential impact of the principal risks to the business as described overleaf, the cyclical nature of the markets in which the Group operates, and incorporates an appropriate level of flexibility to mitigate against these risks. This is achieved through the preparation of sensitivity analyses on a range of scenarios, including variations in revenue, house prices, sales rates, build costs, cash generation and access to financing.

Based on the results of its review and analysis, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period of its assessment.

Strategic priority 1

Drive operating efficiencies, so we increase margins, respond faster to changing market conditions and have strong foundations for delivering further top-line growth.

Strategic priority 2

Maintain capital discipline, so we appropriately invest in growth opportunities, maintain a robust balance sheet and continue to pay strong dividends.

Strategic priority 3

Operate sustainably, so we create longer-term value by balancing financial performance with our obligations to all our stakeholders.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under company law the directors have prepared the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. Under company law, the directors must not approve the financial statements, unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group and Parent Company for that period.

In preparing the financial statements, the directors are required to:

*  select suitable accounting policies and then apply them consistently;

*  make judgments and accounting estimates that are reasonable and prudent;

*  state whether applicable IFRSs as adopted by the EU have been followed, subject to any material departures disclosed and explained in the financial statements; and

*  prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Group and Parent Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Parent Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and the Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the Group and Parent Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors consider that the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group and Parent Company's performance, position, business model and strategy.

Each of the directors, whose names and functions are listed on pages 50 and 51, confirms that to the best of their knowledge:

*  the Parent Company financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Parent Company;

*  the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

*  the Strategic Report contained in pages 1 to 49 includes a fair review of the development and performance of the business and the position of the Group and Parent Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each director in office at the date the Directors' report is approved:

*  so far as the director is aware, there is no relevant audit information of which the Group and Company's auditors are unaware; and

*  they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Group and Company's auditors are aware of that information.

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Notes to Editors

Galliford Try plc is a leading UK housebuilding, regeneration and construction group. It is listed on the London Stock Exchange and a member of the FTSE 250.  Housebuilding - through our Linden Homes business - develops private and affordable homes in prime locations. Galliford Try Partnerships - our regeneration business - delivers mixed-tenure solutions working with housing association, local authority and private sector partners.  Operating as Galliford Try and Morrison Construction, our Construction business carries out building and infrastructure with clients in the public, private and regulated sectors. At the end of the last financial year to 30 June 2018, the Group generated revenue of £2.9 billion.