Servelec FY 2015 results

Transcription

1 Servelec FY 2015 results Alan Stubbs, Chief Executive Officer Mike Cane, Chief Financial Officer

2 1 Servelec Group Overview Central services 41 employees HQ: Sheffield Health & Social Care 255 employees Offices: Sheffield, Manchester, London, Edinburgh, Sydney, Kochi and Belfast 283 employees Offices: Sheffield, Aberdeen, Glasgow, Warrington, Dorking, Melbourne, Brussels and Delaware Mental, Community and Child Health Adult Social Care Oil & Gas Water Acute Child Social Care Power & Nuclear Broadcast 8.7m (52%) Utilities

3 2 Key Financial Highlights Revenue (000s) m m m Adjusted EBITA (000s) m m m Order Entry (000s) m m m Cash Conversion (%) % % % 63.1m +22% (2014: 51.8m) 16.2m +32% (2014: 12.2m) 66.4m +10% (2014: 60.2m) 115% (2014:141%) Group results in line with market expectations Mix slightly different demonstrating benefits of a diversified business model Health & Social Care performed exceptionally well Automation impacted by well understood tough market conditions Strong order entry with high conversion rate Cash conversion at 115% Net cash at the year end of 9.9m Final dividend to be paid 3.5p Confident in the outlook for 2016 Group results in line with market expectations

4 3 Servelec Health & Social Care '000s % Change Segment Revenue 32,532 16,657 95% Cost of Sales (16,347) (8,029) 104% Adjusted Gross Margin 16,185 8,628 88% Gross Margin % 50% 52% Overheads (4,105) (1,055) 289% Segment Profit 12,080 7,573 60% Net margin % 37% 45% Order Entry Order Bank 28.4m 34.6m 22% 22% 49.1m 5% 6% 51.8m Exceptionally strong performance from Health & Social Care Completion of NPfIT London & South Market leader in Mental Health & Community Health with RiO Increasing market share in Social Care 95% revenue growth (22% organic) Acquisition of Aura in May 2015 fully integrated Increased overheads due to acquisitions Net margin reduction due to the mix effect from the acquired businesses Growth prospects from North New and North Refresh remain but over a longer timeframe Social Care market continues to be growth area Exceptional performance across healthcare and social care

5 4 Servelec Controls '000s % Change Segment Revenue 14,421 14,998 (4)% Cost of Sales (8,694) (9,616) (10)% Adjusted Gross Margin 5,727 5,382 6% Gross Margin % 40% 36% Overheads (2,371) (1,858) 28% Segment Profit 3,356 3,524 (5)% Net margin % 23% 23% Order Entry Order Bank 4.6m 4.0m 13.3m 4% 13.8m -13% Robust performance given headwinds in markets Revenue broadly level Slight decrease in profit due to continued high labour content and low material pass through Diversification into Combined Heat & Power market delivered strong results Investment in Power & Nuclear A business focussed on OPEX reduction for clients Strong pipeline going into 2016 Moving into optimisation and remote operations Greater visibility of addressable market in Power and Nuclear Diversification and greater market awareness delivering results

6 5 Servelec Technologies '000s % Change Segment Revenue 16,142 20,098 (20)% Cost of Sales (7,774) (10,661) (27)% Adjusted Gross Margin 8,368 9,437 (11)% Gross Margin % 52% 47% Overheads (4,897) (5,582) (12)% Segment Profit 3,471 3,855 (10)% Technologies impacted by delayed start in AMP6 Management actions on overheads limited profit impact to 10% Outlook for 2016 looks more promising AMP6 orders placed Pushing RTUs in to new markets Strengthening international distribution channels Net margin % 21% 19% Order Entry Order Book 18.5m -3% 17.9m 8.6m 7% 9.2m Impact of market conditions in 2015 evident but 2016 already showing signs of improvement

7 6 Income Statement FY FY % Change '000 '000 Group Revenue 63,095 51,753 22% Cost of Sales (32,815) (28,306) (16)% Gross Profit 30,280 23,447 29% 48% 45% Segment Overheads (11,373) (8,495) 34% Central Overheads (2,756) (2,727) 1% Adjusted EBITA 16,151 12,225 32% 26% 24% Exceptionals - (410) (100)% Share based payments (626) (434) 44% EBITA 15,525 11,381 36% Amortisation (2,130) (874) 144% Operating Profit from Continuing Operations 13,395 10,507 28% Net Finance Income (31) 83 (137)% Profit Before Tax 13,364 10,590 26% Tax (1,466) (1,897) (23)% 11% 18% Profit After Tax from Continuing Operations 11,898 8,693 44% Revenue growth of 22% includes strong growth in Health & Social Care offset by lower result in Automation EBITA up 32% against prior year driven by strong performance in Health & Social Care Adjusted earnings per share increased to 19.8p R&D fully expensed Full year of amortisation of Corelogic 11% tax charge driven by temporary switch to small company R&D rate Adjusted EPS (Diluted) 19.8p 14.4p 38% Unadjusted EPS (Basic) 17.1p 12.7p 35%

8 7 Group Cashflow '000 '000 Adjusted EBITA 16,151 12,225 Depreciation Non acquired amortisation Exceptionals - (410) 17,080 12,275 Working Capital Movements 2,646 5,291 Good cash conversion as final cash unwinds on BT contract Capex reflects investment in hosting Further spend in Q Loan repayment from acquisitions Movement in provisions (135) (205) Operating Cash Flow 19,591 17,361 Cash conversion 115% 141% Net Interest Received (31) 83 Tax Paid (3,814) (2,699) Net Operating Cash Flow 15,746 14,745 Capex (inc Intangibles) (1,382) (1,316) - - Acquisition of Subsidiaries (84) (13,322) 14, Loans Paid (6,901) - Dividends Paid (3,227) (1,024) Foreign Exchange (216) (661) Net Cash Movement 3,936 (1,578) Opening Cash 5,960 7,538 Closing Cash 9,896 5,960

9 8 Group Balance Sheet '000 '000 Fixed Assets & Intangibles 51,057 50,003 Inventories 1,482 1,280 Receivables 22,151 27,674 Cash 9,896 5,960 33,529 34,914 Strong balance sheet Goodwill 35.1m ( m) No R&D capitalised Cash balance of 9.9m Payables (17,372) (24,514) Corporation Tax (285) (2,053) Provisions (189) (324) Deferred Tax (2,383) (2,734) (20,229) (29,625) Net Assets 64,357 55,292 Share Capital 16,054 16,054 Other Reserves 104 (290) Retained Earnings 48,199 39,528 Total Equity 64,357 55,292

10 Health & Social Care: Strategy, Market and Outlook Alan Stubbs, CEO

11 9 Latest News Acquisition of Synergy 1 March 2016 Servelec Corelogic announced the intended acquisition of Synergy from Tribal Group PLC, subject to Tribal shareholder agreement Details of the acquisition Cash consideration of million on a debtfree cash-free basis for the business and assets of Synergy Financed through new bank facility from Lloyds Banking Group as well as existing cash reserves Strategic fit: Prominent supplier in Education and Children s Services Significant shared client base with Servelec Corelogic Enables single view of the child and facilitates early and coordinated intervention Combined Synergy and Servelec Corelogic offering has the immediate ability to become the market leader in the changing landscape in Local Authorities Outlook Acquisition expected to be earnings enhancing in the first full year of ownership. Servelec Board confident in the market growth opportunities for the combined business going forward. Timeframe Completion is expected to occur during March Combined offering has immediate ability to become the market leader in the changing landscape

12 10 The Single View of a Child Education Health Social Care Bringing together information Transforming partnership working Promoting improved outcomes for children and families

13 11 Servelec Health & Social Care: Product Offerings Secondary Care Social Care Solid base of customers, recurring revenues and proven ability to deliver

14 Taget Number of Organisations / Trusts 12 Servelec Healthcare: Targets for Expansion of Secondary Care Client Base Acute North New Oceano 3 Acute wins to date (3 Acute hospitals & 16 Walk in Centres) Target of 9 further Acute wins in next five years North New / North Refresh North Refresh - RiO 3 North Refresh wins to date 22 Future opportunities, Target of 11 North New - RiO 14 North New wins to date 12 Future opportunities, Target of RiO Solid base 21 RiO implementations from London Refresh Indicative time frame Not NPfIT 18 Projects won outside of NPfIT Strong pipeline due to market leading position and churning market

15 13 Social Care Client Base: Drive Market Share from Market Churn Current Position Strong position in the market place 22% Market Share = 53 existing clients Future Position c100 clients to churn over next 21% five years Targeting 50 to give us 50% Market Share Rest of market 26% 22% Rest of market 18% 21% 13% 50% 50% Opportunities for additional market share: - Data Analytics - Hosting - Portals Market churn will deliver further growth in 2016

16 14 Servelec Health & Social Care: Converged Care Servelec s Converged Care approach gaining traction Oceano and Flow products now integrated RiO and Mosaic working alongside each other in many regions already Positioned well to lead the Converged Care agenda Servelec is positioned well to lead the charge in Converged Care

17 Automation: Strategy, Market and Outlook Alan Stubbs, CEO

18 15 Servelec Controls: Bespoke solutions Developing tailored hardware and software solutions by integrating best in class products Providing Integrated Control & Safety Systems (ICSS) such as: Process Control Systems (PCS) Emergency Shutdown Systems (ESD) Fire and Gas Detection Systems (F&G) Material pass through Expanding client base in Oil & Gas market System Life Cycle Engineering Consultancy Engineering Design Solutions Manufacturing & Testing Delivery & Implementation Lifetime Support 24/7/365 Feed T&M Fixed Price in-house work Site T&M Recurring revenues Solutions built around specific customer requirements

19 16 Servelec Controls: Power & Nuclear Addressable Market Pre-2015: Focus on decommissioning. Total market value ~ 2bn 2016: realising full potential of new & existing clients and new markets Focus on nuclear, energy and defence. Total market value ~ 10bn Nuclear Nuclear Addressable market 75m p.a. Defence Defence Addressable market 75m p.a. Energy Energy Addressable market 50m p.a. Addressable market: 75m per annum Energy from Waste and other renewables Addressable market: 200m per annum Significant untapped potential targeting 10% of addressable market for new business by 2018

20 17 Servelec Controls: Market Opportunities Oil & Gas Market even softer than expected Helping customers develop business case for OPEX reduction in the North Sea Up to 15 Gas Turbine opportunities over next five years Contracts around remote operations of platforms starting now, fruition in 2-3 years Outlook Identifying new opportunities to fill the gap Better visibility of key contracts in Oil & Gas Power & Nuclear New senior team is reaping rewards of readdressing available market Gaining traction in Nuclear New contract wins with Drax Power On Sellafield Controls Systems Framework All major industry accreditations achieved Outlook Positioned well on key frameworks Right team in place to deliver New clients being developed Growing pipeline of contracts Focused on refurbishment and nuclear decommissioning Strong products and effective routes to market give confidence

21 18 Servelec Technologies: Product Portfolio Unique full product suite from data collection to analytics and optimisation

22 19 Servelec Technologies: Increasing our Addressable Market Addressable global market for Technologies products estimated to be worth 21bn by 2020 Our emphasis on: AMP 6 UK Water Loggers, RTUs, Scada, Telemetry and Business Optimisation RTU replacement schemes - typical 4,000 RTUs per Water Company Loggers 85,000 Unadopted sites 25,000 Business Optimisation growing opportunities Non UK Water opportunities; broadcast, other infrastructure Global Markets: via scalable distribution channel USA moving from Oil & Gas to Water & Infrastructure Europe Rail and General Infrastructure AsiaPac - Water and Infrastructure Reducing reliance on UK Water industry to even out growth trajectory

23 20 Group strategy and performance in FY Drive organic growth 22% organic growth in Healthcare Products aligned with opportunities to deliver value in 2016 New markets identified 2 Continue to enhance our product capability Investment in R&D and new products during 2015 Flow, Nano logger, Social Care Portal, Oceano Launch of Hosting service to Health & Social Care customers 3 Develop our distribution channels to market Pushing proven Technology products through UK and international distribution channels Investing and driving sales in business optimisation 4 Acquire where beneficial to the business Acquisition and integration of Corelogic is delivering value Acquisition of Aura opening up new markets and integrating with existing products Growth achieved organically, and by acquisition, positioned for further growth in 2016

24 21 Outlook Positive outlook Strong order book as Health and Social Care markets continue to churn Well placed to lead the Converged Care agenda Oil price shows no signs of recovery but market recognises the need to save OPEX and we are well placed to take advantage of this opportunity Further opportunities with the addressable market in Power and Nuclear Technologies on track to deliver in 2016 as UK water market recovers and the business diversifies into new markets Expect to capitalise on market opportunities enabling us to meet growth expectations

25 Additional Slides

26 Key Milestones