COFFEY INTERNATIONAL LIMITED Results - 12 months ended 30 June 2008 28 August 2008
Agenda • Key highlights • Financial performance • Operational review • Strategy & outlook • Q&A 2
Key highlights Roger Olds, Managing Director Roger Olds, Managing Director
Business highlights • Strong organic and acquisition growth • Strong operating cash flow • Grown our specialist business model – size, geographies, markets, client base – successfully acquired & integrated businesses in Brazil (Geoexplore), USA (MSI) and Canada (Shaheen & Peaker) (Geoexplore), USA (MSI) and Canada (Shaheen & Peaker) – expanded into rail, infrastructure transaction advisory, sporting infrastructure and mining • Finance system and controls resolved • Strong balance sheet and new debt facility • Current operating performance in line with 3 year plan from 2005 4
Results highlights • Total revenue up 54.0% to $558.6m • Fee revenue up 33.6% to $376.6m • Operating EBITA* up 70.1% to $43.2m • NPAT* up 59.0% to $22.9m • • EPS* up 30.0% to 20.8 cents per share EPS* up 30.0% to 20.8 cents per share • DPS up from 15cps to 16cps fully franked • Operating cashflow up from $6.2m to $58.6m * Pre vendor earn-out & share-based payment expense (“pre VEO & SBP”) 5
Financial performance Debbie Goodin, Acting Chief Financial Officer Debbie Goodin, Acting Chief Financial Officer
Financial management overview • Finance system and controls resolved • The accounts are fully reconciled – FY07 and 1HFY08 accounts restated as outlined in appendix • Improved financial management – Working capital improvement – Strengthened finance team; corporate and in businesses – Strengthened finance team; corporate and in businesses – Continued finance training in the businesses • New auditor appointed: – Tender process to appoint auditor undertaken September 2007 – KPMG appointed in November 2007 – Extended audit scope this year to increase level of assurance 7
Financial results overview 12 months to 30 June 2008 2007 change ($m) Revenue from continuing operations 558.6 362.7 ↑ 54.0% ↑ 33.6% Fee revenue 376.6 281.9 Operating EBITA (pre VEO & SBP) 43.2 25.4 ↑ 70.1% ↑ 28.9% Vendor earn-out & share-based payment expense 4.9 3.8 Operating EBITA (post VEO & SBP) Operating EBITA (post VEO & SBP) 38.3 38.3 21.6 21.6 ↑ 78.6% ↑ 78.6% ↑ 61.2% Net interest 7.9 4.9 ↑ 3.1% Amortisation 3.3 3.2 PBT 27.2 13.5 ↑ 101.5% ↑ 133.3% Income tax expense & minority interests 11.9 5.1 NPAT (post VEO & SBP) 15.3 8.4 ↑ 82.1% NPAT (pre VEO & SBP) 22.9 14.4 ↑ 59.0% Earnings per share (basic) (NPAT (pre Amort, VEO & SBP)) 20.8 16.0 ↑ 30.0% 8
Change in NPAT 11.2 (5.1) 40 35 (3.0) (6.8) 30 12.2 22.9 (7.6) 25 $m 20 15.3 6.0 14.4 15 8.4 10 5 0 e ) h h x ) T s * T . p P P t t s a . e A w w p A x n B t B s x P e o e P o e S n S e r r p N e m N P g g & x & p P B o 7 A e 8 A x B . c . 0 S 0 t T e t T t S r n r Y s Y o I o I / p I B B e F / F m m n u E r E n e o A o A o t i c r t c n i a e G e i t i I n n a s r r t p a a p s i e t g i ( g ( r N t o r T r r T O O o m A A m A P n P A o N N N 7 8 0 0 Y Y F F *Less minority interest in Duncan Rhodes $0.6m 9
Revenue up 54.0% to $558.6m Total revenue • 54.0% revenue growth – 27.7% organic growth 600 558.6 – 26.3% acquisition growth 96.1 500 • Strong growth in all divisions CAGR 48.7% 100.5 362.0 • • CAGR over past 3 years of CAGR over past 3 years of 400 48.7% $m 300 251.9 170.0 362.0 200 131.3 100 0 FY04 FY05 FY06 FY07 FY08 Organic Growth Non Organic Growth 10
Operating EBITA* up 70.1% to $43.2m Operating EBITA* • 70.1% EBITA* growth – 36.4% organic growth 43.2 50 – 33.7% acquisition growth 45 CAGR 38.3% 40 8.5 • Growth in margins achieved by: 35 – Improved contribution from 25.4 30 9.3 22.4 22.4 $m $m 25 25 Coffey International 16.3 20 Development 11.5 15 25.4 10 – Improved pricing 5 – Increased efficiency 0 FY04 FY05 FY06 FY07 FY08 • CAGR over past 3 years of 38.3% Organic Growth Non Organic Growth * Pre VEO & SBP 11
Operating EBITA to cash flow reconciliation 100 7.2 (4.6) (27.5) 29.8 90 80 70 58.6 0.9 60 9.6 43.2 $m 50 40 40 30 20 10 0 Operating Increased Improvement WIP + Debtor Increased Increased Increased Operating EBITA Creditors from in creditor improvement Creditors from WIP+Debtors WIP+Debtors cash flow $100.5m days 34.9 to ex acquisitions from from $100.5m organic 35.8 days acquisitions acquisiitons organic revenue from 100 to 79 revenue growth @34.9 days (Jun 07 - growth at 100 days Jun 08) days (Jun 07) 12
Strong growth in operating cash flows • Significant increase in 12 months to 30 June 2008 2007 change operating cash flow ($m) Cash flow from operating activities: • Improvement in working ↑ 52.4 Operating cash flow 58.6 6.2 capital by 21.9 days ↑ 9.3 Interest and tax (22.9) (13.6) • Increase in debt due to Net cash (outflow) inflow from operating activities 35.7 (7.4) ↑ 43.1 acquisition funding Cash flow from investing activities: • • Net cash of $2.6 million Net cash of $2.6 million ↑ 12.3 Acquisitions (53.0) (40.7) returned from acquired ↑ 4.1 Property, plant & equipment / other (13.2) (9.1) balance sheet due to Net cash (outflow) from investing activities (66.2) (49.8) ↑ 16.4 improved cash management Cash flow from financing activities: ↓ 75.7 Share issues 1.2 76.9 ↑ 5.3 Dividends (15.6) (10.3) ↑ 90.4 Net change in debt 84.8 (5.6) Net cash inflow (outflow) from financing activities 70.4 61.0 ↑ 9.4 Net increase in cash held 40.0 3.7 ↑ 36.3 13
Strong balance sheet • Gearing remains at conservative As at 30 June 2008 2007 ($m) levels Total Cash 52.4 14.6 • New debt facilities put in place in Foreign currency denominated debt (A$ 35.2 - February 2008 increased facility equivalent) A$ denominated debt 111.1 60.7 size from $115m to $200m Total Debt 146.3 60.7 Net Debt Net Debt 93.9 93.9 46.1 46.1 Debt Facilities undrawn 44.5 54.3 Equity 196.1 177.6 Debt Facilities: % of debt at fixed rate 70% - % of debt at floating rate 30% 100% Net Debt to Equity 47.9% 26.0% Net Debt to Capital 32.4% 20.6% Interest Cover (EBITA pre VEO & SBP) 5.5 5.2 14
Dividends Dividends per share • Total dividend paid has 16.0 18 15.0 16 consistently grown over the past 5 13.0 9.0 14 8.0 10.5 years to $19.1m 12 8.0 8.8 10 7.0 cps • Average dividend payout ratio 8 6.2 6 7.0 7.0 FY07 to FY08 – 85.3% 4 5.0 3.5 2 • Average dividend payout ratio 2.6 0 FY04 to FY06 – 65.3% FY04 to FY06 – 65.3% 04 FY04 FY05 05 06 FY06 FY07 07 FY08 08 Interim Dividend Final Dividend FY04 FY05 FY06 FY07 FY08 Total annual dividend paid ($m)*** 9.0 9.0 9.9 16.5 19.1 Dividend payout ratio* (interim + final)** 67.2% 60.5% 68.3% 93.7% 77.0% Average payout ratio or period 65.3% 85.3% *60-80% of NPAT (pre amortisation, vendor earn-out and share-based payment expense) **Special dividends which have not been included in the above were paid in FY04 (6 cps) & FY05 (2 cps) *** The dividend reinvestment plan was activated for FY04, FY05, FY06 & FY07 15
Summary – financial performance • Finance system and controls resolved • Improved fee margins with EBITA/fee revenue up from 9.0% to 11.5% Strong growth in operating EBITA, up 70.1% • – (CAGR 38.3% over past 3 years) • Strong operating cash flow Strong growth in NPAT (pre amortisation, VEO & SBP), up 59.0% 59.0% • – (CAGR 27.1% over past 3 years) • Strong balance sheet • Final dividend 9cps; full year 16cps (100% franked) – Payout ratio over the past 2 years of 85.3% of operating NPAT (pre amortisation & SBP) 16
Operational review Roger Olds, Managing Director Roger Olds, Managing Director
Divisional analysis Operating EBITA (pre vendor earn-out Fee Revenue Fee Margin & share based payments) 12 months to 30 June 2008 2007 change 2008 2007 2008 2007 ($m) ↑ 50.8% Consulting 45.7 30.3 251.3 159.1 18.2% 19.0% ↑ 440% International Development 8.1 1.5 65.5 68.7 12.3% 2.2% ↑ 25.0% Projects 10.0 8.0 59.8 54.1 16.7% 14.8% ↑ 43.1% Corporate (20.6) (14.4) - - - - ↑ 70.1% Total 43.2 25.4 376.6 281.9 11.5% 9.0% 18
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