1 Redefining the future for people and places | Strategic - PDF document

1 Redefining the future for people and places |

Strategic Development Strategic Development  Significantly enhanced Group HY2015 • 2015 Headline EPS 67.9p – +68% vs 2010 (40.3p) • Headline EBIT +72% (c50% of this Attractive growth organic) growth fundamentals & opportunities opportunities  Evolution in business mix  65% • S upport S ervices 32%  8%  8% • Construction 52% Construction 52%  27% • Disciplined Equipment S ervices 16% performance management  St Strategic review of the Equipment t gi i f th E i t Services business Redefining the future for people and places | 2

Tim Haywood Tim Haywood Redefining the future for people and places | 3

I Income statement £ million £ million 2015 2015 2014 2014 +10% Revenue 3,204.6 2,913.0 +12% Total operating profit 131.8 117.2 Interest (16.4) (11.0) +9% Headline profit 115.4 106.2 Amortisation of intangible assets (31.1) (24.5) Exceptional items (4.8) (19.8) +28% +28% Profit before taxation Profit before taxation 79 5 79.5 61 9 61.9 Taxation (9.3) (12.0) Profit after taxation 70.2 49.9 +15% Headline EPS 67.9p 58.8p +6% Dividend per share 24.3p 23.0p Redefining the future for people and places | 4

S Segmental analysis l l i £ million 2015 2014 Revenue TOP* Margin Revenue TOP* Margin %growth in TOP S upport S ervices -UK 1,834.4 92.2 5.0% 1,679.9 81.4 4.8% +13% 4 1% 4.1% 4.8% 4 8% +11% 11% -International I t ti l 170 4 170.4 8 2 8.2 117.5 117 5 7.4 7 4 Construction -UK 1,040.8 0.1 - 970.7 15.4 1.6% 4.3% 4.7% +20% -International - 13.0 - 10.8 Equipment 211.0 41.9 19.9% 195.5 26.6 13.6% +58% S S ervices ervices Group S ervices (52.0) (23.6) (50.6) (24.4) 3,204.6 131.8 4.1% 2,913.0 117.2 4.0% +12% *Total operating profit Redefining the future for people and places | 5

T Taxation i £ million £ million 2015 2015 2014 2014 Profit Tax Rate Profit Tax Rate S ubsidiary companies 92.8 (15.7) 16.9% 89.7 (18.7) 20.8% Joint Ventures and associates 22.6 - - 16.5 - - Headline profit 115.4 (15.7) 13.6% 106.2 (18.7) 17.6% Amortisation of intangible assets (31.1) 5.8 18.6% (24.5) 4.5 18.4% Exceptional items Exceptional items (4.8) (4 8) 0 6 0.6 12 5% 12.5% (19.8) (19 8) 2.2 2 2 11 1% 11.1% Group companies’ effective rate p p 79.5 (9.3) ( ) 11.7% 61.9 ( (12.0) ) 19.4% Redefining the future for people and places | 6

B l Balance Sheet Sh £ million £ million 31 Dec 31 Dec 31 Dec 31 Dec 2015 2014 Goodwill and intangible assets 520.2 544.4 Property, plant and equipment 218.1 194.7 Joint Ventures and associates 131.9 119.9 Working capital (66.0) (121.3) Pension asset / (deficit) Pension asset / (deficit) 17 2 17.2 (4 8) (4.8) Cash / (net debt) (308.8) (268.9) Net assets Net assets 512.6 512.6 464.0 464.0 Redefining the future for people and places | 7

I Investment Portfolio P f li £ million YE 2015 Addiewell Prison Justice 2.9 West Yorkshire Police West Yorkshire Police Justice Justice 4 0 4.0 Haymarket Property 22.8 Scottish National Blood Transfusion Services Health 1.6 Alder Hey Health 3.3 Invested 34.6 Committed 29.3 Committed and invested 63.9 Redefining the future for people and places | 8

IAS19 P IAS19 – Pensions i £ million £ million YE 2015 YE 2015 YE 2014 YE 2014 Gross liabilities G li biliti (880.9) (880 9) (924 9) (924.9) Insurance buy-in asset 336.0 360.7 Obligations net of insurance buy-in Obligations net of insurance buy in (544.9) (544.9) (564.2) (564.2) Other assets 562.1 559.4 Gross asset / (deficit) 17.2 (4.8)  Triennial valuation completed and agreed • • £64m actuarial deficit (Dec 2011: £150 million deficit) £64m actuarial deficit (Dec 2011: £150 million deficit) • Contributions maintained at £12m p.a. until the next triennial Redefining the future for people and places | 9

C Continuing investment i i i Trading +£151.8m Investing -£111.3m Financing -£80.4m Redefining the future for people and places | 10

G Gross operating cashflow i hfl £ million 2015 2014 Group JVs and Total Total Associates Headline total operating profit 109.2 22.6 131.8 117.2 Depreciation & amortisation 36.1 - 36.1 39.3 Net capital expenditure Net capital expenditure (51 2) (51.2) - (51.2) (51 2) (54 3) (54.3) Other (12.4) - (12.4) (8.9) Working capital investment (53.5) (9.0)* (62.5) (52.0) Gross operating cash flow G ti h fl 28 2 28.2 13 6 13.6 41 8 41.8 41 3 41.3 Closing net debt 308.8 268.9 *JVA dividends in deficit of profit Redefining the future for people and places | 11

G Gross operating cashflow i hfl £ million 2015 2014 Net capital expenditure Group JVs and Total Total Associates  £14.2m UK S £14 2 UK S upport S t S ervices (vs £11.9m depreciation) i ( £11 9 d i ti ) Headline total operating profit 109.3 22.5 131.8 117.2 IT & S ystem investments, growth in the business Depreciation & amortisation 36.1 - 36.1 39.3  £20.1m Equipment S ervices (vs £16.9m depreciation) Net capital expenditure Net capital expenditure (51 2) (51.2) - (51 2) (51.2) (54 3) (54.3) further investment in the Hire Fleet Other (12.5) - (12.5) (8.9)  £9.4m Group S ervices (vs £1.0m depreciation) Working capital investment (53.5) (8.9)* (62.4) (52.0) Investment in our Midland Hub, expected funding & G Gross operating cash flow ti h fl 28 2 28.2 13 6 13.6 41.8 41 8 41 3 41.3 reimbursement Q1 2016  Remaining Group £7.5m (vs £6.3m depreciation) Closing net debt 308.8 268.9 *JVA dividends in deficit of profit Redefining the future for people and places | 12

G Gross operating cashflow i hfl £ million 2015 2014 Working Capital investment Group JVs and Total Total Associates  Middle East investment (Equipment S ervices net Headline total operating profit 109.3 22.5 131.8 117.2 investment, other operations cash received > profit) Depreciation & amortisation 36.1 - 36.1 39.3  S upport S pp ervices UK investment (change in mix with ( g Net capital expenditure Net capital expenditure (51 2) (51.2) - (51.2) (51 2) (54.3) (54 3) reduced Defence work, business growth) Other (12.5) - (12.5) (8.9)  Construction UK investment (supply chain payment Working capital investment (53.5) (8.9)* (62.4) (52.0) demands, close out of problematic EfW contracts) demands, close out of problematic EfW contracts) Gross operating cash flow G ti h fl 28 2 28.2 13 6 13.6 41 8 41.8 41 3 41.3 Closing net debt 308.8 268.9 *JVA dividends in deficit of profit Redefining the future for people and places | 13

D i i Driving Shareholder value Sh h ld l  12% growth in operating profit  15% 15% growth in Headline EPS th i H dli EPS  6% growth in DPS Redefining the future for people and places | 14

Adrian Ringrose Adrian Ringrose Redefining the future for people and places | 15

S Support Services S i MoD - Gibraltar London Underground Interserve Learning & Employment Interserve Healthcare Redefining the future for people and places | 16

Strong growth, broader offering St g g th b d ff i g  S Strong growth, broader offering h b d ff i • Revenue +9% • Total operating profit +13% Total operating profit +13% • Further margin development to 5.0% (2014: 4.8% ) • • Workload £5 6bn (YE2014 £6 2bn) Workload £5.6bn (YE2014 £6.2bn)  Highlights • Mobilisation of Probation • Further Frontline S ervices opportunities opportunities • Building the private sector business Redefining the future for people and places | 17

O Our customers Redefining the future for people and places | 18

Support Services International S S i I i l King Abdullah Financial District, S audi Arabia Abu Dhabi Equestrian Club, UAE Adyard, UAE S afah Wadi Latham, Oman Redefining the future for people and places | 19

V l Volume growth h  Volume growth • Revenues* increased to £224.3m (YE 2014: £157.2m) • Total operating profit increased to £8.2m (YE2014: £7.4m) • Future workload* increased at £304m (YE2014: £286m) £304 (YE2014 £286 )  Outlook Outlook • Resilient demand • Further integration of offering Further integration of offering • Growing FM presence * Incl share of associates results Redefining the future for people and places | 20

O Our customers Redefining the future for people and places | 21

C Construction UK i UK Torbay Hospital Solent University Paragon Factory 2050 Redefining the future for people and places | 22

Growing orderbook G i d b k  Growing orderbook Growing orderbook • Good revenue growth (+7% ) • Full order books with workload Full order books with workload +14% to £1.6bn (YE2014: £1.4bn) • Issues on 3 Energy from Waste Issues on 3 Energy from Waste contracts  Hi hli ht Highlights • Demand continuing to improve • F Focus on technology (BIM) t h l (BIM) • S trong fit out performance Redefining the future for people and places | 23

O Our customers Redefining the future for people and places | 24