Severfield plc Full year results for 12 months to 31 March 2014 1 - - PowerPoint PPT Presentation

▶
severfield plc
SMART_READER_LITE
LIVE PREVIEW

Severfield plc Full year results for 12 months to 31 March 2014 1 - - PowerPoint PPT Presentation

Oct 27, 2022 128 likes •477 views

Severfield plc Full year results for 12 months to 31 March 2014 1 1 Ian Lawson Chief executive officer 2 Severfield-Rowen Plc March 2011 Overview Margin progression in line with expectations New UK structure delivering operational

slide-1
SLIDE 1

1 1

Severfield plc

Full year results for 12 months to 31 March 2014

slide-2
SLIDE 2

Severfield-Rowen Plc March 2011

Chief executive officer

Ian Lawson

2

slide-3
SLIDE 3

Overview

  • Margin progression in line with expectations
  • New UK structure delivering operational efficiencies
  • Improved management of risk and governance
  • Strong balance sheet and net cash
  • Solid order book
  • Indian JV business disappointing
  • Strategy for future growth now in place
  • Clear vision and new branding

3

3

slide-4
SLIDE 4

Severfield-Rowen Plc March 2011

Finance director

Alan Dunsmore

4

slide-5
SLIDE 5

Severfield-Rowen Plc March 2011

Income statement

(£m)

12 months to

31 Mar 2014

15 months to

31 Mar 2013 Revenue 231.3 318.3 Underlying Group operating profit (Pre-JVs and associates) 7.6

3.3%

(19.2)

(6.0%)

Results of JVs and associates (3.0) (0.3) Net finance charges (0.6) (2.0) Underlying profit/(loss) before tax 4.0 (21.5) Tax (1.4) 3.0 Underlying profit/(loss) after tax 2.6 (18.5)

5

5

slide-6
SLIDE 6

6 6

Revenue and margin

6

Margin recovery on track

6

*

* Pro-forma 12-month numbers

slide-7
SLIDE 7

Severfield-Rowen Plc March 2011

Balance sheet

(£m) 31 Mar 2014 31 Mar 2013 Non-current assets 147.7 154.9 Current assets: Inventories 5.8 8.2 Trade & other receivables 60.8 71.6 Cash & cash equivalents 5.5 0.7 72.1 80.5 Total assets 219.8 235.4 Less: Current liabilities (52.7) (70.9) Borrowings (5.2) (41.9) Retirement benefit obligations (12.5) (11.8) Deferred tax liabilities (5.9) (8.4) Total liabilities (76.4) (133.0) Net assets 143.4 102.4

7

slide-8
SLIDE 8

8 8

Cash flow

8

  • The Group has a £35m banking facility with RBS and National Australia Bank in place until November 2016.

(41.2) 44.8 8.4 7.5 (8.3) (3.5) (5.3) (2.1) 0.3

(45.0) (35.0) (25.0) (15.0) (5.0) 5.0 15.0 Net debt - Mar 13 Rights issue EBITDA Contract debtors Trade creditors Other working capital Capex India equity Net funds - Mar 14 £ million

Net debt bridge – year ended March 2014

Outflow on trade creditors mainly represents reversion to 30 day payment terms for TATA (c£4m). Equipment for construction sites and general replacements. 8

slide-9
SLIDE 9

Severfield-Rowen Plc March 2011

9

Statutory profit reconciliation

(£m)

12 months to

Mar 2014

15 months to

31 Mar 2013 Underlying profit/(loss) after tax 2.6 (18.5) Restructuring and redundancy costs (2.6) (0.8) Amortisation of acquired intangible assets (2.7) (3.4) Retirement of acquired intangible asset (2.4)

  • Impairment of investment in associates

(0.4)

  • All costs associated with amendment of banking facilities
  • (2.1)

Contract legal costs and provision movements

  • (1.1)

Movements in value of derivative financial instruments

  • 0.1

Tax on non-underlying items 2.8 2.7 Statutory loss after tax (2.6) (23.1) Underlying EPS* 0.88p (10.78p) EPS (0.89p) (13.49p) Dividend per share nil 1.5p

*There is no difference between basic and diluted EPS in both years. Comparative EPS has been restated to reflect the new shares issued in the rights issue

9

slide-10
SLIDE 10

Severfield-Rowen Plc March 2011

Contract costs

Individual Cost Breakdown % Fixed / Variable Costs Comment Steel and Other Materials 35% FIXED Pricing fixed for the duration of contracts Factory Direct Labour 15% FIXED Pay awards annually in July Overheads 20% FIXED Tightly controlled – any inflation currently offset by efficiency improvements, pay awards annually in July Transport 3% VARIABLE 3 year fixed contract now in place with Stobart, fuel surcharge only variable Sub-contractors 12% VARIABLE Negotiated for each contract – back-to-back with tenders Site Construction Labour 15% FIXED Mainly directly employed, pay awards annually in July

10

slide-11
SLIDE 11

Severfield-Rowen Plc March 2011

(£m) (£m) Equity invested by Severfield since 2009

  • 12.0

Severfield share of losses at 31 March 2013

(5.7)

  • Severfield share of losses for 2013/14

(3.0) (8.7)

Severfield net investment at 31 March 2014

3.3

India - Summary of investment and results to date

  • Equity invested has financed one third of factory cost and trading losses to date
  • Factory cost : £26m
  • Debt within JV : £22m, including £15m term debt for factory build and £7m of

working capital debt

(Matched by JSW)

11

slide-12
SLIDE 12

Severfield-Rowen Plc March 2011

Chief executive officer

Ian Lawson

12

slide-13
SLIDE 13

The UK market (2013)

  • Current estimated UK capacity – 1,000,000 tonnes
  • Total UK production of constructional steelwork – 848,000 tonnes
  • Our current addressable market – 500,000 tonnes
  • Our current share of UK market – 90,000 tonnes
  • Our potential capacity – 150,000 tonnes

Source: BCSA

13

slide-14
SLIDE 14

Current tonnage outputs (2013) Top 12 companies

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Output (tonnes) BCSA Member

Top 12 BCSA Membership – current UK market outputs

Source: BCSA

# William Hare includes output from UAE factory 14

slide-15
SLIDE 15

Consistent and quality order book

209 197 178 172 168 50 100 150 200 250 Dec-12 May-13 Aug-13 Nov-13 May-14

Order book values (£m)

15

slide-16
SLIDE 16

Severfield-Rowen Plc March 2011

UK order book

Sector November 2013 £172m May 2014 £168m Future Trend Commercial Offices 27% 31% Transport 22% 18% Stadia & Leisure 5% 18% Industrial 16% 11% Power & Energy 12% 7% Data Centres & Other 5% 6% Retail 6% 4% Bridges 3% 3% Health 3% 2% Education 1%

  • 16
slide-17
SLIDE 17

17 17

  • London Bridge Station Canopies
  • Glasgow Smartbridge
  • Data Centre, Amsterdam
  • Manchester Victoria Station
  • Nova, Victoria
  • Essex Waste Handling Plant
  • Birmingham New Street Station
  • Smurfitt Kappa Paper Mill, Snodland
  • 5 Broadgate
  • Old Livestock Market, Hereford

Current major projects

5 Broadgate, London Essex Waste London Bridge Station Canopies Smurfitt Kappa Paper Mill, Snodland

17

Manchester Victoria Station

slide-18
SLIDE 18

18 18

Pipeline/prospects

18

Data Centres

  • Here East, London 1
  • Telehouse North2, London

Commercial Offices

  • One Lime Street, London
  • London Wall Place 3
  • One Angel Court, London

Stadia

  • Liverpool FC 2
  • Tottenham Hotspur FC

Transport / Warehousing

  • Ordsall CT, Manchester
  • Project Thunderbird, Kettering
  • Distribution Centres for Gazeley

1 2 3

slide-19
SLIDE 19

Sector Market tonnage in 2013 (000s) SFR market share (estimated) Industrial & Warehousing 350 42% 5-10% Commercial Offices 88 10% 30-40% Education 88 10% <5% Power & Energy 37 4% 20-30% Agriculture 35 4% 0% Healthcare 31 4% 5-10% Leisure 31 4% 20-30% Bridges 25 3% <5% Retail 20 2% 40-50% Other 53 6% 5-10% Exports 90 11% <5% 848 100%

Our sectors

19

slide-20
SLIDE 20

India – Work in progress

  • Factory capacity 60,000 tonnes
  • Current order book - £41m
  • Challenging market
  • Election outcomes
  • Views in the market
  • Our partner JSW
  • Current strategy:
  • 1. Self help
  • 2. Business development
  • 3. Debt reduction / interest mitigation

20

OPG Power Station JSSL Facility, Bellary

slide-21
SLIDE 21

Proud of our past: Positioning for our future

Our Vision: To be leaders in structural steel, creating a legacy for future generations through world class engineering and design excellence

  • Simpler, market-facing structure
  • Clearer differentiation of the company in our market
  • A dynamic brand and new website

Our Values:

  • Safety
  • Integrity
  • Customer Focus
  • Commitment

21

slide-22
SLIDE 22

Our strategy

Strategy

Margin improvement (0-3 yrs) Prove India is a sustainable business (0-1yr) Increase UK market share (1-3yrs) Enter new market sectors (1-3yrs) Build from existing European

  • pportunities (1-5yrs)

Improved technology (0-5yrs) Capitalise on improving economy

Results

Operating margin 5-6% (0-2yrs) Profit growth Increased revenue (1-5yrs) Positive cash flow Net capital investment £4-5m/pa Return to dividend

22

slide-23
SLIDE 23

A strong platform for growth

  • The business is in a much improved state from 12 months ago
  • We have unrivalled capabilities which puts us in prime position as the economy starts to

improve

  • Our facilities are the best in the UK and possibly Europe
  • In the UK there are areas and sectors of the market where our market share can possibly

be improved

  • There are potential opportunities for growth in Europe
  • We have a very skilled and dedicated workforce
  • We have appointed a new SHE director
  • We have appointed new NEDs to make us both compliant and to inject fresh ideas and

support into the business

  • Strong differentiating brand and clear purpose and direction for the company
  • UK markets showing signs of growth

A Clear Strategy

23

slide-24
SLIDE 24

Thank you.

Questions

For more information: Ian Lawson – Chief executive officer Alan Dunsmore – Finance director +44 (0) 1845 577 896 Dalton Airfield Industrial Estate, Dalton, Thirsk, North Yorkshire, YO7 3JN, UK www.severfield.com

24

slide-25
SLIDE 25

Appendices

25

slide-26
SLIDE 26

What we are

  • Severfield is the UK's premier structural steel

company

  • We are the largest structural steel business in the

UK and one of the biggest in Europe

  • We are a business built on the pride, passion, and

quality of our people

  • We have an enviable track record in designing,

fabricating and erecting steel structures

26

slide-27
SLIDE 27

Where we are

Dalton, Thirsk Lostock, Bolton Sherburn, Scarborough Enniskillen, N. Ireland Bellary, India

27

slide-28
SLIDE 28

What sets us apart?

  • What we do
  • Our markets and our position within them
  • Our capability and people
  • Our stability and capacity
  • International operation
  • A strong platform for growth

28

slide-29
SLIDE 29

What we do

Design Fabrication Construction

29

slide-30
SLIDE 30

UK consumption of constructional steelwork

  • historical and projected 2009-2017

Source: BCSA (historical data)

30

slide-31
SLIDE 31

31

  • 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 FY'51 FY'61 FY'71 FY'81 FY'91 FY'01 FY'13 FY'20 FY'26 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%

Indian economic growth

6.9% 9% 11.5% 2.0%

Manufacturing and infrastructure development to drive Indian economic growth

  • Ref. : Planning Commission – December, 2013 // Derived

GDP at MP // US$-Billion GDP Proj. @ +7%

Agriculture Manufacturing Services Industry

31

slide-32
SLIDE 32

Source : Joint Plant Committee 25 27 27 31 33 36 41 47 52 52 59 66 71 73 74 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

CAGR : + 8.6%

Indian steel demand

32

mt

slide-33
SLIDE 33

Particulars %-Pvt. Share %-GDP Share 10th Plan

(2002-03 to 2006-07)

20% 5.1% 11th Plan

(2007-08 to 2011-12)

38% 7.1% 12th Plan-Projected

(2012-13 to 2016-17)

48% 8.3% FY 2016-17-Projected

(Terminal year of 12th Plan)

54% 9.0%

12th Five year plan - Investment for infrastructure development projected to increase two-fold to US$ 1-Trillion

Reference : Planning Commission of India

Indian infrastructure investment plan

33