Preliminary Results 2006

Transcription

1 Preliminary Results 2006

2 Overview Highlights Continuing to deliver against consistent strategy of achieving market leadership in four chosen sectors Record interim results with profit before tax up 14% to 47.6m Margin steady at 3.2% (2005: 3.2%) Earnings up 11% to 78.2p, dividend increased by 12% to 28.0p Strong operating cash generation: year end cash of 95m (2005: 72m) Order book increased by 19% to 3.3bn (2005: 2.8bn) 2

3 Overview Financial History m Revenue Profit before tax 1,219 1,297 1, % 3.2% % % % * 2000* 1995* 2000* * 1995 and 2000 figures on UK GAAP basis 3

4 Overview Segmental Profit Analysis m December 2006 December 2005 Fit Out % Construction % Infrastructure Services % Affordable Housing % % Group Activities (8.1) (4.8) Joint Ventures (0.8) 0.4 OPERATING PROFIT % Interest PBT % 4

5 Overview Corporate Structure Fit Out UK s leading office fit out business comprising Overbury, Morgan Lovell and Vivid Interiors. Construction National business with strong track record in healthcare, education, light industrial and property services sectors. Infrastructure Services Core activities in water, electricity, gas and transportation sectors. Specialises in tunnelling, civil engineering and utilities work. Affordable Housing UK s leading provider of affordable housing. Specialises in mixed tenure developments. 5

6 Overview Order Book Profile m 6

7 Fit Out 7

8 Fit Out Market & Trading Highlights 2.3bn market: buoyant market conditions Fit Out market leader with key competitors ISG, Wates, Mace, Structuretone Fit Out consolidating market leadership position Operating profit increased 38% to 22.6m Margin improved to 5.3% (2005: 5.1%) Growth driven by Financial and professional services sectors Technology sector in Thames Valley Success in delivering large projects 8

9 Fit Out Financial History m Revenue Operating Profit % % %

10 Fit Out Projects Client: Birmingham School of Acting Project: 15 week relocation, design & fit out of 25,000 sq ft Contract value: 2.8m Location: Birmingham Client: Research in Motion Project: 90,000 sq ft fit out over four floors Contract value: 9.7m Location: Slough Other key projects: Deloitte & Touche ( 33m), SJ Berwin ( 24m), BBC framework ( 15m pa) 10

11 Fit Out Work Profile m Work type Framework Large Projects "Core" Sector Financial Professional Technology Public Leisure & Entertainment Property Other Total 193m 426m

12 Fit Out Prospects Continued strong market anticipated through 2007 Larger projects making significant impact and targeting further opportunities Continuing geographic and sector expansion Order book lengthened to 187m (2005: 134m) 12

13 Construction 13

14 Construction Market & Trading Highlights Large market at approximately 26bn with fragmented competition Key competitors Kier, ROK, Wates, Galliford Try Bluestone focused on leadership in chosen sectors: health, education, light industrial, property services Operating profit of 3.4m (2005: 3.2m) Success in securing new framework agreements 14

15 Construction Financial History m Revenue Operating Profit % % %

16 Construction Projects Client: NPS Property Consultants Project: Design and construction of North Earlham fire station Contract value: 2m Location: Norwich Client: Solent Community Solutions Project: Construction of a community-based health and social care centre (NHS LIFT scheme) Contract value: 2m Location: Rowner, Hampshire Other key projects: South East Centres of Excellence framework ( 20m pa), Trafford Park ( 17m), Dorset County Council framework ( 5m pa) 16

17 Construction Prospects Outlook positive with further market growth Expansion of Perfect Delivery quality programme Additional workload from NHS LIFT schemes Continuing public sector spending on health and education Order book of 491m (2005: 504m) 17

18 Infrastructure Services 18

19 Infrastructure Services Market & Trading Highlights Infrastructure market 6.3bn pa with strong current growth Morgan Est has leading positions in bridges, tunnelling and utilities Key competitors: Balfour Beatty, Carillion, Amec, Costain, Skanska Operating profit down to 5.1m due to restructuring and mobilisation costs 1.0m profit contribution from rail acquisition 800m of new work secured split evenly between civils and utilities 19

20 Infrastructure Services Financial History m Revenue Operating Profit % % %

21 Infrastructure Services Projects Client: Transport Scotland Project: Kincardine Bridge Contract value: 50m Location: Fife No picture available Client: Westfield and London Underground Project: Remodelling of underground station Contract value: 48m Location: Shepherds Bush Other key projects: Belfast Sewer ( 62m), M1 Widening J25-28 ( 110m), Thames Water Ring Main ( 38m) 21

22 Infrastructure Services Prospects Market outlook positive Delivery of infrastructure projects secured in 2006 Belfast sewers Central Networks framework Croydon cable tunnel Northern Gas Partnership framework Kincardine bridge Scottish Water Solutions framework M1 widening J25-28 Thames Water ring main Shepherds Bush underground station Opportunities in water, electricity, gas and transportation sectors for further major infrastructure projects Growth of rail business: increased expenditure on the London underground network and national expansion Record order book at 1.2bn (2005: 824m) 22

23 Affordable Housing 23

24 Affordable Housing Market & Trading Highlights Affordable housing market 15bn pa Lovell market leader: key competitors Keepmoat, Connaught, Mears, Kier Record result with operating profit up 29% at 24.0m (2005: 18.7m) Improvement in margin to 5.9% (2005: 4.8%) Further success in securing mixed tenure opportunities Decent Homes refurbishment programmes continue to be a key element of the division s activity 24

25 Affordable Housing Financial History m Revenue Operating Profit % 4.8% %

26 Affordable Housing Projects Client: Cheltenham Borough Homes Project: Improvements to 2,400 homes Contract value: 30m Location: Cheltenham Client: Tower Hamlets Housing Action Trust, the Guinness Trust Project: Mixed tenure scheme in Bow Contract value: 64m Location: East London, near site of 2012 Olympic Stadium Other key projects: Hammersmith & Fulham Decent Homes framework ( 76m), Garston-under-Bridge ( 36m), New East Manchester Phase 2 ( 36m) 26

27 Affordable Housing Work Profile m Total 224m 404m Social Housing Refurbishment Mixed Tenure Open Market New Build Social Housing New Build 27

28 Affordable Housing Prospects Market leading position in long term growth market Final round of Decent Homes frameworks Future growth increasingly driven by mixed tenure urban regeneration schemes Order book progressed to 1.4bn (2005: 1.3bn) 28

29 Financials Summary m December December Revenue 1,497 1,297 Profit before tax Effective tax rate 31% 29% Tax charge Profit after tax Net assets EPS 78.2p 70.7p Dividend per share 28.0p 25.0p 29

30 Financials Balance Sheet and Cash Flow Balance sheet 16m increase in goodwill relating to rail acquisition Inventories at similar level to last year at 87m (2005: 88m) Cash flow Cash generated of 23m, giving 95m at year end (2005: 72m) Average cash during the year of 22m (2005: 30m) 11m generated from working capital improvements 18m spent on acquisition Joint venture dividend received of 7m 30

31 Future Prospects Fit Out and Affordable Housing main drivers with market leading positions Infrastructure Services increasing in scale to deliver recently secured projects Positive outlook with all sectors looking healthy Forward order book at 3.3bn The Group continues to make excellent progress and we enter 2007 with a positive outlook across all our markets. 31

32 Financial Appendices Income Statement Balance Sheet Cash Flow 32

33 Financials Income Statement m December December Revenue 1, ,296.7 Cost of sales (1,331.4) (1,154.1) Gross profit Administrative expenses (118.4) (103.1) Share of results of joint ventures (0.8) 0.4 Operating profit Net interest Profit before tax Tax (14.8) (12.1) Profit after tax

34 Financials Balance Sheet m December December Non current assets Intangible Tangible Interest in JVs & investments Current assets Inventories Trade and other receivables Cash and cash equivalents Current liabilities (414.5) (359.2) Net current assets Non current liabilities (5.0) (5.4) Net assets

35 Financials Cash Flow m December December Operating profit Depreciation Non cash adjustments 1.5 (1.4) Movement in working capital 11.6 (15.8) Net interest Tax (13.9) (11.7) Acquisition of subsidiary (18.2) - Net investment in fixed assets (2.3) (3.2) Investments (2.6) (6.4) Dividends (10.9) (7.1) JV dividend Finance leases (1.8) (1.3) Share capital Net cash flow 23.4 (1.4) Net cash balances JVs, share options, profit on disposals, pension cost 35