Harvey Nash Group Plc

Transcription

1 Harvey Nash Group Plc Full Year Results 31 Jan 2010

2 Albert Ellis CEO Richard Ashcroft CFO Simon Wassall MD

3 Prepared for every eventuality

4 Remaining profitable through the recession Revenue Operating Profit * * before non recurring & exceptional items

5 Maintaining strong cash position Financial highlights

6 Shareholder returns Progressive dividend payout Cover of 1.7 times * adjusted eps

7 Diversity by client sector

8 Financial Overview

9 Financial Highlights Tight control of costs Group remained profitable despite global recession Adjusted operating profit of 4.5m in line Cash generation just 20% lower at 5.8m (2009: 7.3m) Balance sheet robust: Net cash up 15% to 5.1m Dividend up 10% overall to 2.2p

10 Income Statement (1) m % Turnover % Gross profit % Operating profit % Net interest paid (0.4) (0.8) -56% Adjusted profit before tax %

11 Gross Profit - by region m % UK % Europe % USA %

12 Operating Profit - by region m % UK % Europe % USA %

13 Income Statement (2) m % Adjusted profit before tax % * Non recurring items (2.8) - n/a Profit before tax % Taxation (0.4) (2.6) -85% Profit after tax % * Cost of headcount reduction and charge for empty property

14 Dividends and earnings m % Eps - basic 1.09p 9.00p -88% Eps - adjusted 3.84p 9.00p -57% Dividend per share - Final dividend July p 1.2p +13% - Full dividend for year 2.2p 2.0p +10%

15 Taxation m Tax charge current year Under accrual prior year Deferred taxation credit Taxation Overall tax rate (1.2) % (0.4) %

16 Foreign Exchange Rate vs GBP % Euro % US Dollar % Swiss Franc % Swedish Kroner %

17 Balance Sheet m % Fixed assets % Intangible assets % Trade Debtors % Other net current liabilities (59.4) (76.3) -22% Net cash % Net assets %

18 Funding growth Total facility: 30m Hedging: Purpose: Facility: Notice period: Main coverage: Covenants: Pricing: Euros and Sterling Working capital funding Invoice discounting & overdraft 12 months UK & Europe No covenants, self regulating (debtors) Competitive

19 Cash Flow m Operating cash inflow Taxation Interest Capex Free cash flow Working Capital Acquisitions Share buy back Dividends Net cash inflow (2.9) (0.4) (2.7) (2.7) 5.4 (0.0) (0.3) (1.5) (2.2) (0.8) (0.4) 8.0 (1.9) (5.0) - (1.4) (0.3)

20 Acquisition Initial 50.1% Max Deferred consideration Target exit PBT in Year 3 2.1m 3.4m 1.4m Valuation: 6 x p/e based on average (Jan 09 to Dec 2013) Earnings enhancing in year to Jan 2012 Year ended Dec 2009 Gross Profit 2.2m & PBT 0.4m

21 Strategic focus

22 Priorities from last year s presentation Headroom secured Maintained marketing Retention of key fee-earners Costs reduced by 4.6m pa Harvey Nash ipad application Additional Alcatel contract Organically expansion Norway acquisition

23 Strategic objectives 1. Investing in marketing & brand - Global CIO survey, client events, marketing and branding 2. Portfolio of services - HR outsourcing, IT outsourcing - Leadership and employee assessment services 3. Prudent approach to investment - Less reduction in headcount and capacity during the downturn - Employer brand equity and stronger client relationships 4. Grow market share Benefit from decline in industry capacity

24 Operational review

25 UK Deep recession Cost and margin reductions Technology sector weakened H Large contract wins; Home Office, Symbian Foundation Public Sector robust; NHS, local government, education Off-shore revenues up 85% Edinburgh office profitable Market outlook Ireland in recession Surprisingly strong recovery in UK

26 Europe Permanent hiring down by 50% Contracting stable but pricing and margin pressure Flight to quality increases market share (Switzerland) Benelux profitable but impacted by recession Scandinavia; countercyclical leadership services Germany; improved profits due to IT outsourcing Outlook Stable, labour over-capacity Much improved outlook in the Nordic region

27 USA Challenging conditions, industry suffers losses Higher margin projects delayed/cancelled Headcount reduction and pay cuts 2009: focus on contracting Key objective: maintained footprint Opened Houston, Texas Market outlook High unemployment persisting Strong GDP growth

28 Acquisition in Norway New market: Norway Strong fundamentals Bjerke & Luther: No 3 in the market Strategic Fit: Alumni, Scandinavia Telecoms, Energy Organic start up: Helsinki, Finland Result: No 1 in the Nordic Region

29 Outlook & Conclusion

30

31 Current Trading Pipeline of activity improving USA: UK: Europe: on track, increased pipeline & improved sentiment risks ahead, recovery in permanent requirements stabilisation, lagging US & UK by 6 months the year has started in line with our expectations and we are now seeing a recovery

32 Thank You