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Investor Presentation Augus gust t 2019 Agen enda da MBH at a G - - PowerPoint PPT Presentation
Investor Presentation Augus gust t 2019 Agen enda da MBH at a G - - PowerPoint PPT Presentation
Investor Presentation Augus gust t 2019 Agen enda da MBH at a G Glance nce Acqu quisi isiti tion on Strategy tegy & P Portfo tfolio io Overview ew Market et Positi sition on & Indu dust stry Trend nds Finan anci
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MBH at a G Glance nce Acqu quisi isiti tion
- n Strategy
tegy & P Portfo tfolio io Overview ew Market et Positi sition
- n & Indu
dust stry Trend nds Finan anci cials als (pro-for forma) a) Investment stment High ghligh ights ts and d Outloo look IR Se Services ces
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Agen enda da
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Callum um Laing ng Chief ef Exec ecuti utive ve Officer er Victo tor Tan Chief ef Financ ance e Officer cer Davi vid d Hallam am Non – Exec xec Direct ector Toby by Street eet Non – Exec xec Direct ector
- Joined MBH in 2017
- More than two
decades of experience in starting, building, buying, and selling businesses
- Partner at Unity
Group and pioneer of the Agglomeration model
- Published two
business bestsellers and more than 800 business interviews
- Commissioner World
Business Angel Investor Forum, Singapore
- Joined MBH as CFO
and Executive Director in 2017
- Member of the
Institute of Chartered Accountants since 2004
- Over 17 years
finance experience at Big 4 chartered accounting firms, start-ups, SMEs, Top 25 ASX MNC
- Joined MBH as as
Non-Exec Director in 2018
- Business executive,
entrepreneur and investor with over 30 years of experience
- Extensive M&A and
Investor Relations experience
- Development of
small and medium size businesses into large plc
- rganisations
- Consultant for
venture capital investments
- Joined MBH as as
Non-Exec Director in 2018
- Extensive experience
in leading businesses to grow sustainably, structuring joint ventures and strategic collaboration, as well as investing for private equity
- Owner of digital
marketing agency in London
- Worked at renowned
real estate & private equity company Mayfair, London
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Highly committed Management Board with broad M&A and relevant sector experience MBH BOARD RD MBH at a G Glance nce
- Joined MBH in 2018
- Founder of Parenta
Group, UK’s largest provider of vocational training and software systems to the Early Year’s education sector
- Active member of
the Vistage CEO Private advisory.
- Published Amazon
bestseller “Improving the business of Childcare” Allan an Presl esland and Non Non-Exec xecuti utive ve Chai airman man Victo toria a Sylves vester ter Exec xec Direc ecto tor
- Joined MBH as as
Exec Director in 2019
- Extensive experience
in leading businesses and is a Principal of her own company in the Group Acacia Training Limited.
- Owner of vocational
training company in UK
- Principals
representative on the Board.
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INVESTMEN TMENT T CASE With our accretive acquisition growth strategy, we are building a diversified portfolio of excellent companies and talented entrepreneurs, giving investors unprecedented access to profitable businesses in the $1m-$5m EBITDA range. For investors, we provide the opportunity to participate in the sustainable success of these attractive SMEs with promising growth prospects.
Implementing Agglomeration™ 'buy and hold' strategy gives MBH access to deals below market rate driving significant value and accret etive e growth. h.
- 1. Buy and Hold
ld
Encouraging, but not forcing synerg nergies es between each company and each vertical through synergistic growth
- 3. Syner
ergist gistic ic Grow
- wth
Enabling business
- wners to flourish and
grow their business
- rgani
anical cally in a plc environment
- 2. Organic
ganic Grow
- wth
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MBH at a G Glance nce INVES ESTMENT MENT CASE SE MBH builds up a value-enhancing SME portfolio of profitable businesses with excellent growth prospects
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Company mpany Indu dust stry Descr escript iption ion Const struction ruction Services vices Const struction ruction Services vices Const struction ruction Services vices Educa cation ion Educa cation ion Engin ineer erin ing g Ser ervices vices Provides multiple award-winning vocational training services across the UK, specialising in the healthcare sector Based in the UK with a strong reputation for delivering quality fit-outs in the Commercial sector Leading design and implementation company in the commercial interior industry in New Zealand U.K.'s leading provider of business software and vocational training for early years settings
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Strengthened Construction and Education vertical with profitable SMEs from UK, New Zealand and Singapore, and opening a new vertical, Engineering Services MBH will add 15-20 acquisitions per year. MBH at a G Glance nce ACQUI UISITION TION HIGHLI GHLIGH GHTS 2018/ 8/ Q1 2019
Guildprime’s focus is luxury retail fit-outs and refurbishments, high end commercial office spaces and residential across the UK and also overseas Engineering group focused on four core business divisions: Energy & Electrical, Fire & Hydraulics, Building & Construction Services and Power Generation.
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Strong revenue growth through organic growth & portfolio expansion in 2018 and 2019 GROUP UP PRO FORMA MA KPI’S 2018 MBH at a G Glance nce 3
EPS ACCRETIVE ACQUISITIONS
£24.78 8 million ion
IN REVENUE
£3.10 10 million ion
IN EBITDA
£30.30 0 million ion
IN REVENUE
£3.30 million ion
IN EBITDA
2017 2018
Du Boulay Contracts was acquired in Dec 18. APEV was acquired in June 2019. Guildprime Specialist Contracts Ltd was acquired in April 2019.
£6.4 million
- n
IN REVENUE AS OF 31 March 2018 for 12 months
Note: 2018 and 2017 figures only represent the financial results for Cape, Parenta and Acacia
£5.4 million
- n
IN REVENUE for financial year ending 30th September 2018
£54 million ion
IN REVENUE expected financial year ending 31st July 2019
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Acqu quisi isiti tion
- n Strategy
tegy & Portfolio tfolio
Platform for growth with long-term incentivation of key personnel Profitable SME‘s with in depth industry experience MBH owns 100% of the acquired businesses predominately using stock to complete transaction Acquisitions are EPS accretive, offering long-term value creation for shareholders Vertical approach across multiple geographies and sectors that are well established, profitable, debt free and looking to scale
8
Acquisition strategy allowing EPS enhancing, accretive acquisitions AGGLOMERATION™ MODEL
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Acqu quisi isiti tion
- n Strategy
tegy & Portfolio tfolio
EDUCA CATION ON SERVICES CES CONSTRUCT TRUCTION SERVICES CES
5.99 4.21 20.09 6.4* 52 United Kingdom 30 United Kingdom 33 New Zealand 13 United Kingdom 100% 100% 100% 100%
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Excellent companies with talented entrepreneurs
(mil ill/GB l/GBP)
LIKE FOR R LIKE PORTFO FOLI LIO O OVERVIEW RVIEW
Comp mpany ny Reve venu nue 2018 Staff Locatio ion MBH H Shareho hold lding ing Acquir uired in
22nd Aug 2018 22nd Aug 2018 3rd Sep 2018 8th Dec 2018
*du Boulay numbers represents 12 months to 31st March 2018 ** APEV expected numbers for financial year ending 31st July 2019
18th April 2019 5.4
ENGINEE EERI RING G SERVICES CES
27 United Kingdom 100% 17th June 2019 54** 210 Singapore 100%
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Acqu quisi isiti tion
- n Strategy
tegy & Portfolio tfolio
APEV was formed in 2014 and has a headcount of 210 under its two main brands – Twenty20 and Pacific Energy Consulting. The engineering group has four core business divisions: Energy & Electrical, Fire & Hydraulics, Building & Construction Services and Power Generation. In line with MBH’s Agglomeration strategy the acquisition will be Earnings Per Share
- accretive. APEV’s management estimates that the earnings before interest and
income tax (EBIT) for the year ending 31 July 2019 amounts to approximately SGD 10.3 million (GBP 5.8 million). Agglomeration allows APEV to target multiple industry sectors, diversify revenue streams and reduce risk, while achieving economies of scale and a consistent customer experience through shared operations and support functions. APEV are focused on providing government, corporate and industrial clients with improved energy efficiency and cost savings, greater energy generation capacity and system reliability, and improvements in transmission efficiency and network management capabilities.
Busin siness ess Investm estmen ent case
Deve velo lopme ment nt
£54.00m 4.00m*
Reve venu nue 2019
210
Full l time me Emplo loye yees 10 Proje ject ct Case se Study
CASE STUDIES ES – ENGINEERING INEERING SERVIC VICES ES Asia Pacific Energy Ventures Pte Ltd
* APEV expected numbers for financial year ending 31 July 2019
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Acqu quisi isiti tion
- n Strategy
tegy & Portfolio tfolio
Based in Auckland, New Zealand, Cape has quickly become one of the top three profitable independent property services firms in New Zealand, providing a full suite of services including project management, resource procurement and administration. Revenue expansion plans for Cape are driven through reputation and brand value within the property development industry. Cape’s competitive advantage lies in its efficiency born from its competence in the training and development of its project engagement teams. Recently Cape has engineered organic growth and market share in the New Zealand market and seeks to expand its operations beyond its home market into Australia. One of Cape’s projects showed off their skills in the film and television sector for their Client Maori TV . Maori TV is a New Zealand television station, that broadcasts programmes making a significant contribution to the revitalisation of the Māori language and culture.
Busin siness ess Investm estmen ent case
Deve velo lopme ment nt
£20.0 0.09m 9m
Reve venu nue 2018
33 33
Full l time me Emplo loye yees 11 Proje ject ct Case se Study
CASE STUDIES ES – CONS NSTR TRUCT CTION ION SERVIC VICES Cape Ltd
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Proje ject ct Case se Study
Acqu quisi isiti tion
- n Strategy
tegy & Portfolio tfolio
Acacia Training is an Ofsted rated Good specialist training provider primarily as a health and social care training provider offering training in health and social care for apprenticeships, higher apprenticeships, mandatory training and work- based learning. Acacia is an approved supplier nationally with the NHS and a number of local authorities, holding contracts to deliver in specific areas of the UK under the government’s apprenticeship levy scheme. Being a prime provider, this opens many pipeline opportunities for The Education Group. Acacia is an Ofsted Grade 2 (Good) provider, Skills for Care Endorsed Provider and holds Investors in People and Matrix standards. Acacia is also one of only 103 nationally approved Disability Confident Leaders and the only one in its local area. A number of Acacia’s trainers are also approved to deliver programmes approved by Mental Health England.
Busin siness ess Investm estmen ent case
Deve velo lopme ment nt
£5.99 .99m
Reve venu nue 2018
30 30
Full l time me Emplo loye yees 13
Acacia Training Ltd CASE STUDIES ES – EDUCATION TION SERVIC VICES
Acacia delivers qualifications across England, in the health and social sector, the management sector and in dental nursing. Acacia is a prime provider with the Employment & Skills Funding Agency (“ESFA”) and is registered on both RoATP & ROTO as an approved provider.
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Market et Positi sition
- n &
Indu dust stry Trend nds
EUROPE
SMEs make up 99.8% of total enterprises and 67% of jobs
*European Commission, 2014/2015, Annual Report on European SMEs
SMEs make up 97% of total enterprises and 30% of jobs
*Ministry of business, innovation and employment, 2014, The Small Business Sector Reported
NEW ZEALAND
- Estimated SME market volume of US$35 trillion dollar
- SMEs make-up 99% of companies in most major economies;
- employ 2 out of every 3 people;
- but attract only 10% of business investment
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CURRENT RRENT INDUSTRI TRIES ES SMEs SME market with strong growth prospects
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Market et Positi sition
- n &
Indu dust stry Trend nds
APEV EV rela latio ions nship hip with h ADB The Asian Development Bank (“ ADB”) has been working with PNG since 1971 and is the country’s largest multilateral development partner. PNG G as an eme mergin ing marke ket Papua New Guinea is an emerging economy driven by two key sectors; the agricultural, forestry, and fishing sector, where most of the country’s labor force is engaged, and the mining, oil and gas sector, where the majority of export earnings are generated. Incr crease in gove vernm nment t proje jects cts and dema mand nd The ADB is expected to increase total financing for development projects in PNG from USD$743.7 million (2016–2018) to approximately USD$1.67 billion (2017–2019) contributing to construction projects across all Government priority areas of development such as roads, schools and hospitals, rehabilitation projects for fire and police departments, airport upgrades and subsidized housing projects in major centers to provide affordable accommodation. Engine neering ing Strate tegy MBH’s strategy is to acquire and develop companies across the Engineering industry. Papua New Guinea (“PNG”) is currently the sole market for the group, with Pacific Energy Consulting establishing PNG operations in early 2014, and remains central to the Company’s development plans, but this will expand as the Vertical is built. 15
CURRENT RRENT INDUSTRI TRIES ES Engineering
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Market et Positi sition
- n &
Indu dust stry Trend nds
Silo lo nature of current nt eco cosyste system Education providers tend to deliver their services to a single silo Financi cial l Pressu ssures s on Growi wing ng popula lation tion By 2025, the UN estimates that the world population will increase by 1 billion people. The interne net t is opening ing new marke kets ts Learning techniques and technology have developed in line with an ever increasing knowledge economy. Significa ificant nt growth wth in middle le class ss By the end of this century, the number of people with secondary or tertiary education will have increased 10 fold. Education tion Strate tegy MBH’s strategy is to acquire and develop companies within all the silos of education, within the fields of technology, people and the environment, and across the globe. 16
CURRENT RRENT INDUSTRI TRIES ES Education
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Market et Positi sition
- n &
Indu dust stry Trend nds
Real l Estate te Econo nomy Critical to the economy, the total value of all developed real estate globally is estimated at $217 trillion in 2015 New w Zeala land nd Cons nstru truction ction Marke kets ts Construction sector contributed $18.9 billion to New Zealand’s GDP Constru nstructi ction
- n Strateg
tegy The strategy for the property services sector of MBH is to vertically integrate companies in the construction, project management, real estate investments and development sectors. Whilst the UK and Australasia are the first two focus regions, the aim is to become a global property services provider which would include expansion
- ut of the UK, Australia and New Zealand.
New w Zeala land nd Cons nstru truction ction Marke kets ts The value of construction work in Great Britain continued to rise in 2016, reaching its highest level on record at £99,266 million; driven by continued growth in the private sector 17
c CURRENT RRENT INDUSTRI TRIES ES Construction Services
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18
PROFI FIT T AND LOSS SS – ST STATUT UTORY
Education Construction Services Other Consolidated MBH Revenue
4,815 7,695
- 12,511
Cost of sales
(2,263) (6,408)
- (8,672)
Gross profit
2,552 1,287
- 3,839
Gross profit margin
53.0% 16.7% 30.7%
Total Expenses
(833) (759) (585) (2,178)
EBITDA
1,718 528 (585) 1,660
Depreciation and Amortisation
(213) (10)
- (223)
Net finance (expense)/income
(13) (1) (6) (20)
Profit before tax
1,491 517 (591) 1,417
Tax (expense)/income
(43) (128)
- (171)
Profit after tax
1,448 389 (591) 1,245
(GBP ‘000)
Profo
- forma
a EPS bas ased ed on 2017 earni rning ngs*: GBP 0.07 per share EPS based ed on 2018 8 stat atut utor
- ry
y earni rning ngs: GBP 0.11 per share (Growth 58% from 2017) PE Ratio
- bas
ased ed on 2018 earni rning ngs and share are pri rice ce at 30 April ril 2018: 11.2 *EPS 2017 is pro forma numbers
EPS and PE Ratio Finan anci cials als
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Non Curren ent t Assets ets Fixed assets 3.044
- Goodwill
29,700 224 Total Non Curren ent t Assets ts Assets ets 32,7 ,744 44 224 224 Curren ent t Assets ets Trade Debtors, other debtors and assets 8,269
- Cash
1,523 0.002 Total Curren ent t Assets ets 9,793 0.002 Curren ent t liab abiliti ties es Loans and overdrafts (1,218)
- Trade creditors and other creditors
(5,646) (0.017) Contingent consideration (2,988)
- Total Curren
ent t Liab abiliti ties es (9,8 ,852) (0.0 .017 17) Non Curren ent t Liabiliti ties es Contingent consideration (3,838)
- Loans and overdrafts > 1
(484)
- Deferred tax provision
(9)
- Total Non Curren
ent t Liabiliti ties (4,3 ,331) 1)
- Net Assets
ets 28,35 ,354 4 224 224 Equity ty Share Capital 27,039 250 Retained Earnings 1,245 (0.017) Translation 6
- Total Equity
ty 28,3 ,354 4 224 224
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CASH SH FLOW W & BALANCE ANCE SH SHEET ET – ST STATU TUTORY RY
This is a cashflow statement which only includes the companies from September 2018 onwards
Cashf hflow Figures
2018 (£‘000)
Balance ance Sheet t Figures
2018 (£‘000) 2017 (£‘000)
Finan anci cials als
Cash flows from operating activities Net profit 1,246 Adjustments for non cash items 875 Change in working capital, net of effects from acquisitions (1,291) Income tax paid (53) Net cash provided by operating activities 777 Cash flows from investing activities Acquisition of subsidiary corporation, net of cash acquired (2) Additions to intangible assets (384) Additions to property, plant and equipment (51) Net cash used in investing activities (437) Cash flows from financing activities Interest paid (21) Repayments of bank borrowings (44) Proceeds from issue of convertible notes 976 Commission (89) Net cash provided by financing activities 822 Net (decrease)/increase in cash and cash equivalents 1,162 Beginning of financial year
- Effects of currency translation on cash and cash equivalents
13 Cash Balance at the End of the Financial Year (including overdraft) 1,175
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11,923,970 2,527,643 2,454,742 2,948,695 5,298,411 5,710,874 Allan Presland 39% Unity Group 8% David Howes 8% Grandose Ltd 10% SME Principals 17% Other shareholders 19% Name ISIN Incorporated Number of shares Additional Shares to be issued for signed acquisitions Stock Exchanges Designated Sponsors Listing Date & Place Lock up period MBH Corporation plc GB00BF1GH114 20 June 2016 30,864,335 In the range of 22-30 million shares. XETRA, FRA, DUS Renell Bank, First Berlin Equity Research, Public eye Consulting 15th November 2018 uplisted to the Frankfurt Quotation Board 360 day lock ups for SME principals joining the group. SHARE RE HOLDINGS GS (%) AS OF 12 JULY 2019 SHARE RE DATA A AS OF AUGUST GUST 2019 20
MBH Sh Share e Capit ital al Stable shareholder base with 360 day lock-ups for joining SME principals Investment stment High ghligh ights ts & Outloo look
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Investment stment High ghligh ights ts & Outloo look
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GROUP 2018 (Proforma) 2019 (Forecast)
Revenue EBITDA Acquisitions £30.3m £3.3m 4
2019 Forecasts are based on the groups current portfolio projections. MBH Outl tlook
- ok 2019
Organ ganic ic Grow
- wth
th Accretive etive Growth wth Based on both accretive growth through acquisitions, and organic growth through the existing subsidiaries.
By 7% Up by 3% Driven by a positive market
- utlook in geographies
subsidiaries are operating in 15-20
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Investment stment High ghligh ights ts & Outloo look
ACCE CESS TO SMEs Unique investment solution providing an innovative answer to investing in scale up businesses around the world, previously unavailable to the sophisticated investor. CORPORA ORATE TE GOVERN RNAN ANCE CE Independent board committed to a high standard of corporate governance. DIVERS RSIFIED FIED RISK K Diverse portfolio approach across industry verticals and different geographies. LIQUIDI DITY Comprehensive liquidity strategy utilizing frequent material news flow. ACCR CRETIV ETIVE E STRATEG TEGY Steady accretive growth through Agglomeration™, targeting 15-20 EPS accretive acquisitions per annum. FRANKFUR KFURT T AND XETRA RA The Frankfurt Stock Exchange is one of the top 10 largest stock exchanges by market capitalization globally, with more than 90 per cent of all trading in shares at all German exchanges are transacted through Xetra. 22
MBH Corporation plc provides a unique investment solution for sophisticated investors and provides an innovative answer to investing in SME’s Why Invest st?
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