Northgate plc. Return to growth. Preliminary results Year ended 30 April June Northgate plc

Transcription

1 Northgate plc Return to growth Interim results for the six months ended 31 October 2013 Northgate plc Preliminary results Year ended 30 April 2013 June 2013

2 Agenda Financial review Operational review UK Spain Outlook Chris Muir Bob Contreras Bob Contreras 2

3 Chris Muir: Group Finance Director Financial Review Northgate plc Preliminary results Year ended 30 April 2013 June 2013

4 Group financial summary Operating profit Profit before tax EPS FY14:H1 38.1m 32.0m 18.3p FY13:H2 38.8m 21.4m 14.1p FY13:H1 47.6m 28.1m 15.1p Interim dividend Net debt ROCE 3.2p FY13 1.3p 370m 10.5% Apr m Apr % 4

5 FY13 Revenue Depreciation Other direct costs Vehicle disposals Payroll Overheads FY m 36.4m UK operating profit Operating profit impacted by reduced vehicles on hire, coupled with upfront investment relating to the start-up of new sites and the strengthening of our commercial and operational teams. m (4.0) 1.6 (1.1) (1.2) (2.2) (2.3) 5

6 FY12 Revenue Depreciation Other direct costs Vehicle disposals Payroll Overheads FY m 15.0m Spain operating profit Trading conditions in Spain remain difficult. Despite this our underlying operating margin decreased only slightly to 16.6% in the period ( %). m (5.0) (0.5) 6

7 Rate Net debt Exchange Non-cash Non-utilisation Interest m FY13 (3.2) (1.2) (9.1) (0.1) 0.2 FY14 6.8%* 2.8%* Non-cash Non-utilisation Cash Reduction 13.4m Total * Closing weighted average borrowing rate inclusive of swaps 7

8 Cash flow and net debt Net debt Oct-13 Apr-13 Oct-12 Gearing Oct-13 Apr m 363m 343m 100% 102% m Opening net debt (1 May-13) Cash flow 6.2 Non-cash movements (0.2) Exchange movements 1.7 Closing net debt (31 Oct-13) Oct-12 94% Facilities headroom

9 Bob Contreras: Chief Executive Operational review Northgate plc Preliminary results Year ended 30 April 2013 June 2013

10 UK Operational Highlights Vehicles on hire Utilisation Revenue p/v +2,800 88% +1% since April 2013 (FY13 88%) compared to FY13 Vehicle sales ROCE Network 7,600 at improved values 12.5% (Apr %) 3 new sites opened since Apr-13 Focus remains on driving growth in the UK 10

11 Driving growth in the UK Growth in VOH of 1,900 from regional customers Growth in VOH from new sites of 900 Commercial Customer numbers increased by 11.4% since Apr-13 Improved residual values Increased retail penetration from 19% to 24% of sales Vehicle Sales Target of 30% 11

12 Network expansion: progress to date Vehicles on hire from new sites Growth of 1,100 (900 in FY14) 1,200 1, FY13 FY14 Slough: opened Jul Basildon: opened Oct-13 12

13 Network expansion: opportunities Initial focus on London area Potential for up to 17 sites in London area (currently 8 open) Opportunities for at least 20 further sites across the remainder of UK to fill regional gaps Potential sites will have to meet minimum 16% ROCE threshold target 13

14 Spain Operational Highlights Vehicles on hire Revenue p/v Utilisation +1,200-1% 93% since April 2013 compared to FY13 (FY13 90%) Vehicle sales Customers ROCE 3,700 +9% 8.6% at improved values since April 2013 (Apr %) Progress against actions taken to improve ROCE 14

15 Progress against actions to improve ROCE Customer numbers increased by 9% through targeting SME business Construction industry reliance 29% (31% at Apr-13) Commercial Improvement in customer profiling to benefit returns Maintain utilisation above 90% (93% achieved in H1) Workshop efficiency programme has contributed to a 10% saving in maintenance costs Operations Age out vehicles subject to suitable customer profile (23.7mths from 22.9mths at Apr-13) Improved residuals: Change in customer profile presents retail quality vehicles to market Retail network expanded from 8% to 17% of sales Retail sales Target to achieve UK levels 15

16 Bob Contreras: Chief Executive Outlook Northgate plc Preliminary results Year ended 30 April 2013 June 2013

17 Outlook UK Continue to build on commercial improvement and branch expansion Spain Continue to take actions to increase ROCE Dividend Maintain normalised cover whilst growth opportunities exist Outlook UK provides medium term growth opportunity whilst ROCE in Spain remains a priority 17

18 Questions 18

19 Financial summary Appendix 1 m October 2013 Oct 2012 UK Spain Total Total Operating profit (excluding vehicle disposals) Vehicle disposals Total operating profit Corporate (1.9) (1.5) Group operating profit Cash interest (6.1) (19.5) Profit before tax

20 Exceptional items Appendix 2 m Oct 2013 Oct 2012 Restructuring costs UK Restructuring costs Spain Pension settlement Total exceptional items

21 Capital employed (October 13) Appendix 3 m UK Spain Group Vehicles (hire and used) Property Other fixed assets Trade and other debtors Trade and other creditors (50) (12) (62) Capital employed Net debt (239) (131) (370) Net assets ROCE 12.5% 8.6% 10.5% Capital employed (April 2013)

22 Facilities and borrowing cost Appendix 4 m Oct 2013 Syndicated bank facilities 430 Other facilities rate* Fixed rate borrowings % Floating rate borrowings % Net debt % Headroom 75 * Weighted average borrowing rate inclusive of swaps 22

23 Financial covenants Appendix 5 Interest cover Leverage Loan to value % % 50% % % x 3.7x x 1.5x 20% 10% 50% 49% 0.00 Apr-13 Oct Apr-13 Oct-13 0% Apr-13 Oct-13 EBIT headroom 33m Threshold 2.0x Increases to 3.0x in Apr-14 EBITDA headroom 54m Threshold 2.0x Loan headroom 156m Threshold 70% 23

24 Operating cash flows Appendix 6 m Oct 2013 Oct 2012 Operating profit (statutory) Depreciation and amortisation Working capital and other movements (9.4) (0.6) Cash generated from operations Net interest paid (4.9) (16.4) Corporation tax received/(paid) 4.4 (3.4) Cash flow after interest and tax Vehicle purchases (158.1) (149.3) Vehicle disposals Other net capex (2.9) (4.3) Cash flow before equity and financing costs Equity and financing costs, dividends and other items (10.1) (5.0) Net cash flow (6.2)

25 Group fleet capital expenditure Appendix 7 m FY14 (H1) FY13 (H1) FY13 (H2) Purchases UK Spain Disposals UK (48.6) (69.3) (55.3) Spain (18.2) (20.3) (23.1) Net fleet capex Vehicles: Purchases UK 9,400 9,600 6,900 Spain 5,100 4,500 2,800 14,500 14,100 9,700 Disposals UK 7,600 12,000 8,700 Spain 3,700 5,600 5,600 11,300 17,600 14,300 Purchases and disposals stated on an accruals basis and exclude direct selling costs. 25

26 UK KPIs Appendix 8 FY14:H1 FY13:H1 FY13:H2 Fleet size (closing) 52,800 51,000 49,900 Utilisation (average) 88% 89% 88% Closing vehicles on hire 45,900 45,000 43,100 Revenue per vehicle (annualised) 6,238 6,141 5,984 Operating margin 18.7% 24.4% 19.6% Headcount (closing) 1,862 1,852 1,835 PPU 1, ,076 ROCE 12.5% 16.4% 14.8% 26

27 Spain KPIs Appendix 9 FY14:H1 FY13:H1 FY13:H2 Fleet size (closing) 36,500 37,700 35,100 Utilisation (average) 93% 90% 90% Closing vehicles on hire 33,300 32,700 32,100 Revenue per vehicle (annualised) 5,438 5,585 5,536 Operating margin 16.6% 16.8% 16.6% Headcount (closing) PPU ROCE 8.6% 8.5% 8.4% 27