FY12 First Half Results Presentation By Chris Sutherland, Managing - - PowerPoint PPT Presentation

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FY12 First Half Results Presentation By Chris Sutherland, Managing - - PowerPoint PPT Presentation

FY12 First Half Results Presentation By Chris Sutherland, Managing Director 23 November 2011 Important notice and disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer to


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FY12 First Half Results Presentation

By Chris Sutherland, Managing Director 23 November 2011

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Important notice and disclaimer

The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial

  • circumstances. Past performance is no guarantee of future performance.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this

  • presentation. To the maximum extent permitted by law, none of Programmed Maintenance

Services Limited, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections, prospects or returns contained in this presentation. Such forecasts, projections, prospects or returns are by their nature subject to significant uncertainties and contingencies. This presentation should be read in conjunction with the Announcements issued to the ASX since the 2011 Annual Report and can be found on the Programmed website at www.programmed.com.au.

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Welcome to the world of Programmed

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Safety is paramount. We will act to ensure the safety and environmental well- being of our customers, the public and ourselves.

Our Vision: To be the leading provider of staffing, maintenance and project services, without injury

SAFETY TEAMWORK

We respect everyone’s contribution by working together to achieve common goals and project outcomes. Our sense of team extends to building long-term customer and community relationships for the benefit of all.

ACCOUNTABILITY

We encourage individuals and teams to take responsibility and ownership of the process, and the

  • utcome, through

decisive leadership and initiative.

HONESTY & INTEGRITY

Our business relationships are based on fair, open, and ethical principles. We take pride in the way we work with our customers and communities, the integrity of our services, and doing what we say we are going to do.

RECOGNITION & ENJOYMENT

We are a people

  • business. We

recognise and reward

  • utstanding

achievement, and provide opportunity for

  • ur employees to

develop and

  • succeed. We create

an environment for every team member to have a positive, enjoyable and rewarding work experience.

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Programmed Today

$1200 million+ revenue 100 offices around Australia and NZ 10,000+ employees

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Our visible commitment, leadership, systems and processes to prevent injury with a goal of Zero Harm Our ability to recruit, deploy and manage a large skilled workforce to support our customers’ operations…5,000+ permanent and 5,000+ casuals…30,000+ people each year Our many long-term contracts…more than 5,000 Our diversity across all industry sectors including the offshore oil and gas sector Our wide network that serves and supports large and small customers alike across Australia and NZ…100+ branches

Our Competitive Advantages

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INTEGRATED WORKFORCE

Staffing Services

Customers contract a complete MANAGEMENT and / or maintenance SOLUTION Customers contract the STAFFING service

PROPERTY & INFRASTRUCTURE

Maintenance, Building and Operational Services PROPERTY SERVICES FACILITY MANAGEMENT KLM ELECTRICAL & COMMUNICATIONS

Customers contract the TASK capability

Our Structure

RESOURCES

Maintenance, Construction and Operational Services TOTAL MARINE SERVICES CONSTRUCTION & MAINTENANCE

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Revenue of $652.3 million, up 8% on pcp1 EBITA of $23.7 million, up 129% on pcp1 Profit of $11.6 million, up 153% on pcp1 Fully franked interim dividend of 5.0 cents per share, up 2c on pcp Net debt lower to $110 million (down from $118 million at 31 March 2011) Debt refinanced to October 2014 WA Water Corporation $785 million contract

1 pcp excluding discontinued operations

Group Performance Highlights

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Group Results

Group Results

1H 2012 30 Sep 2011 1H 2011 30 Sep 2010 % change $m $m

Continuing operations

Revenue 652.3 604.7 8% EBITDA (before restructuring costs) 29.2 22.7 29% Depreciation (5.5) (6.5) 15% EBITA (before restructuring costs) 23.7 16.2 46% Restructuring costs 0.0 (5.9) EBITA 23.7 10.3 129% Amortisation (0.1) (0.2) 38% EBIT 23.6 10.2 132% Net Interest (7.0) (6.8) (3%) Profit Before Tax 16.6 3.4 391% Income Tax Expense1 (5.0) 1.2 Profit From Continuing Operations 11.6 4.6 153% Discontinued operations2 0.0 (7.6) Profit After Tax (statutory basis) 11.6 (3.1) Earnings Per Share 9.8 (2.6) Earnings Per Share (continuing operations) 9.8 3.9 153% Weighted Average Shares on Issue (million) 118.2 118.2

1 1H 2011 includes $1.9m tax benefit from retrospective change in tax consolidation rules to allow

additional deductions for assets acquired after 1 July 2002

2 Discontinued operations comprise the United Kingdom painting business

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Group Revenue by Halves

200 400 600 800 1,000 1,200 1,400 1H 2H Full Year

Group Revenue ($m)

FY2011 FY2012

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Group EBITA by Halves

10 20 30 40 50 60 1H 2H Full Year

Group EBITA ($m)

FY2011 FY2012

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Group Cash Flow

Group Cash Flow

1H 2012 30 Sep 2011 1H 2011 30 Sep 2010 $m $m Gross Operating Cash Flow 33.1 15.9 Interest paid (7.7) (7.0) Income tax paid (8.5) (6.8) Net Operating Cash Flow 16.9 2.1 Net purchases of non current assets (2.1) (2.7) Payment for businesses (0.4) (0.1) Proceeds from sales of businesses 3.2 3.0 Other investing cash flows 0.3 0.5 Net Investing Cash Flow 1.0 0.7 Net borrowings / (repayments) (17.2) (25.1) Proceeds from issue of shares 0.0 0.0 Dividends paid (7.1) (7.1) Net Financing Cash Flow (24.3) (32.2) Net Increase / (Decrease) in Cash (6.4) (29.4) Cash at beginning of year 20.1 46.5 Disposals & Exchange Rate Variances 0.3 (0.1) Cash at End of Period 14.0 17.0

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Group Balance Sheet

Balance Sheet

30 Sep 2011 31 Mar 2011 % change $m $m Cash 14.0 20.1 (30%) Trade and other receivables 199.4 189.5 5% Contract Recoverables 132.1 133.8 (1%) Inventories 70.7 73.8 (4%) Property, plant & equipment 23.1 24.4 (5%) Goodwill & other intangible assets 252.1 251.0 0% Other assets 23.7 25.0 (5%) Total Assets 715.1 717.6 (0%) Trade and other payables 132.2 134.3 (2%) Borrowings 124.0 138.5 (10%) Provisions and other liabilities 98.8 93.4 6% Total Liabilities 355.0 366.2 (3%) Total Equity 360.1 351.5 2% Net Debt 110.0 118.4 (7%) Net Debt / Equity 30.5% 33.7% (9%)

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Debt Refinancing

New bank syndicated lending facility until October 2014 The facility includes three financing tranches aggregating $250 million comprising

  • Working capital and overdraft facility of $70 million (rolling 1 year

term)

  • A revolving debt facility of $120 million (3 year term)
  • A bank guarantee facility of $60 million (rolling 1 year term)

Other arrangements remain for ongoing support of asset finance requirements ($17 million)

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Property & Infrastructure

Property Services margin improved on pcp Facility Management revenue and earnings higher on pcp KLM Electrical and Communication earnings lower than pcp but expect similar result to last year for full year

100 200 300 400 500 600 700 1H 2H Full Year

Property & Infrastructure Revenue ($m)

FY2011 FY2012

5 10 15 20 25 30 35 1H 2H Full Year

Property & Infrastructure EBITA($m)

FY2011 FY2012

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New Maintenance Programmes

Property Services improvement projects being delivered well Three new maintenance programmmes offered this year

  • giving customers greater choice
  • lower capital requirements
  • approx. 25% of new programmes sold YTD are non classic

Classic Programme ™

An upfront work schedule with periodic payment

Choices Programme ™

You decide when, where and how often, and pay as you go

Multiform Programme ™

A uniform solution for multiple facilities

  • r multiple locations

Safeguard Programme ™

Ongoing preservation programme to keep your coating as new

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WA Water Corporation

Perth Region Alliance

Programmed Facility Management successful tenderer Estimated revenue over 10 years $785m Work commences 1 Feb 2012 In partnership with the Water Corporation; scope is for supply of operation and maintenance services covering water, sewerage, and storm water network across north & south metropolitan Perth and Mandurah / Peel region

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Resources

Strong growth in offshore oil and gas projects driving increased revenue and earnings from Total Marine Services Major Gorgon contract to commence in December 2011 Onshore Construction & Maintenance business delivered maintenance and construction support services to a range of clients in the North and South WA

50 100 150 200 250 1H 2H Full Year

Resources Revenue ($m)

FY2011 FY2012

2 4 6 8 10 12 14 16 1H 2H Full Year

Resources EBITA($m)

FY2011 FY2012

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Integrated Workforce

Demand was flat through first quarter and weakened in second quarter across general manufacturing, transport and industrial client base Demand was strong across mining and heavy construction markets Result shows slight revenue decline overall but improved margin

50 100 150 200 250 300 350 400 450 1H 2H Full Year

Workforce Revenue ($m)

FY2011 FY2012

2 4 6 8 10 12 1H 2H Full Year

Workforce EBITA($m)

FY2011 FY2012

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‘With more than 7,000 customers and 100 branches throughout Australia and New Zealand, Programmed is well placed to continue to expand our

  • perations and increase the range of services we provide to each

customer,’ said Mr Sutherland. ‘While the external business environment remains challenging and demand from some sectors has weakened, this is balanced by Programmed’s increasing exposure to the resources, infrastructure and government sectors.’ ‘Overall, the group continues to project for FY2012 growth in the Property & Infrastructure division’s earnings supported by the cost reductions in FY2011; growth in the Resources division’s revenue and earnings due to strong demand; and growth in the Integrated Workforce division’s earnings as a result of tight control of margins and costs.’

Outlook

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Key growth strategy .....mine the customer base

Common Customer Relationship Management System (CRM)

  • being installed across Property & Infrastructure operations initially

Align Incentives

  • common group-wide customer referral incentive scheme running

since April 2011

  • 215 opportunities registered in first half
  • 15 converted for contract revenue of approx $3m so far

Brand refresh

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We have the power to build your business

  • Reposition Programmed.
  • Staff think and act as one business.
  • Customers know our full offer
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A fresh new and consistent look in 2011

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Appendix

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Segment Revenue

Revenue by division

1H 2012 30 Sep 2011 1H 2011 30 Sep 2010 % change $m $m Continuing Operations Property & Infrastructure 321.5 298.1 8% Resources 138.6 103.5 34% Workforce 190.6 201.5 (5%) Total Continuing Operations 650.7 603.1 8% Other Revenue 1.5 1.6 Discontinued Operations1 0.0 6.7 Total Consolidated Revenue 652.2 611.4 7%

1 Discontinued operations comprise the United Kingdom painting business

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Segment EBITA

EBITA by division

1H 2012 30 Sep 2011 1H 2011 30 Sep 2010 % change $m $m Continuing Operations Property & Infrastructure 12.3 10.5 17% Resources 10.8 4.3 151% Workforce 6.0 5.3 13% Unallocated (5.4) (3.9) 38% Total Continuing Operations 23.7 16.2 46% Restructuring Costs 0.0 (5.9) Discontinued Operations1 0.0 (8.9) Total Consolidated EBITA 23.7 1.4 1593%

1 Discontinued operations comprise the United Kingdom painting business