Results Presentation for the half year ended 30 September 2018 - PowerPoint PPT Presentation

Results Presentation for the half year ended 30 September 2018

Highlights • Earnings per share increased 52% to 1.52p Corporate • Profits up 49.5% to £0.553m • Gross margin up 0.5% • Continued growth in profits from the China Joint Venture • Improved profitability of the Transportation division Transportation • UK rigid hydraulic tube business continues to grow • Further productivity gains through ongoing investment • US market conditions favourable but challenges with recruiting and retaining skilled employees • Good progress in developing new opportunities • Energy Strong operational performance • Revenue, as anticipated, lower due to reduction in demand from power generation rental sector All references to EBITDA, profit before tax and EPS are before intangible asset amortisation, share based payment charges and foreign exchange derivative valuation. 2

Financial Review – Highlights Revenue Profit Before Tax - £m  All businesses 0.6 £11.415m Flat profitable 0.4 0.2 Operational Gearing  Transportation 29.5% Down 1.7% 0.0 division 2015 2016 2017 2018 continues to grow EBITDA return - % EBITDA 10.0% £0.944m Up 26.9% 7.5%  Profitability 5.0% increased 2.5% PBT significantly on 0.0% £0.553m Up 49.5% flat revenues 2015 2016 2017 2018 Earnings per share - pence  Further inload of Earnings per share 2.0 new business 1.52p Up 52% 1.5 1.0 0.5 0.0 2015 2016 2017 2018 3

Financial Review – Balance Sheet Net assets £m Sept 18 Sept 17 Cash generated by operations £14.884m Up 4.8% £0.320m Down 3.6% Cash generated by 0.320 0.332 operations Net debt EBITDA 0.944 0.744 Investment in joint venture £3.288m Down 5.2% £1.066m Up 36.3% Investment in joint venture 1.066 0.782 Net working capital Gearing £4.012m Down 1.0% 48.3% Down 16.0% Capital expenditure 0.327 0.281  Reduction in half year on half year net debt Capex/depreciation ratio 1.18 1.09 despite investment headwinds  Gearing down on previous half year  Increasing value of investment in China Net debt 3.288 3.470  The Group operates without any covenants Gearing % 48.3% 57.5% on its borrowings 4

Financial Review - Change in Net Funds £000’s 31 March Underlying 30 September Net movement Tangible / 2018 Net operating 2018 Finance Other in working intangible Depreciation debt profit Net debt charges movements capital assets Cash generated by operations £320k (2,982) (3,288) 278 (473) 515 (137) (403) (86) 5 5

Business Review - Introduction • Two divisions- Transportation and Energy • Efficient operational base spanning three key geographic regions in the UK, USA and China supporting a global customer base • Footprint has created significant opportunities to expand existing relationships and to develop new business with customers 6

Customer Product Markets Application: Global Engine Markets Gearbox Truck – Lube Medium and Coolant Heavy Duty On Road Truck Coolant Global Application: Markets Hydraulic Construction fluid transfer Agriculture – Actuator Off Road Machines Mining control Application: Global Gas Vacuum Markets Braking Semi-Con. System Medium and Global Application: Other Transmission Heavy Duty Markets Fluid Breathers Truck Agriculture, transfer of Off Road Engines Fuel suction Construction oil , fuel, air Mining water and Oil and Gas coolant Application: Global Fluid Markets Energy Generation Transfer – Power Oil, Air, and Generation Water Construction, Mining 7

8 Distinctive Capabilities • “Superclean“ • Rotary TIG welding • World class fabrication • Welded assemblies • Innovation • Dedicated manufacturing cells • GEMBA • SMED

Business Review - Performance Transportation Energy H1 2018 H1 2017 H1 2018 H1 2017 £’000 Central Central Group Group H1 2018 H1 2017 H1 2018 H1 2017 adjustments adjustments Revenue 8,495 8,097 2,920 3,330 11,415 11,427 PBT 389 156 187 278 (23) (64) 553 370 • UK Transportation – Benefitting from ongoing investment Revenue – Rigid hydraulic tube business continues to grow Up 4.9% – Investment in in-house cutting yielded further productivity gains • USA – Increased profitability PBT – Continued to expand customer base Up 149.3% – Market conditions favourable – Challenges on recruitment and retention of skilled employees Revenue – Strong operational performance Energy Down 12.3 % – Revenue, as anticipated, lower due to reduction in demand from the power generation rental sector PBT Down 32.7 % • Joint Venture – Improved market conditions through H1 – Further improvement in profitability 9

Outlook • Significant progress in the period focusing on growing margins – Significant increase in profit before tax – Earnings per share up 52% • Reflects benefit of an efficient operational base spanning three key geographic regions, a global customer base and successfully developing new business opportunities • Pipeline of new business opportunities remains encouraging • Past two years seen significant growth in end markets but some signs of growth slowing towards the end of the period • Expect second half revenues to be similar to first half • Full year underlying profit before tax expected to be in line with market expectations 10