Final Results to 31 March Paul Hamer, Chief Executive Officer Sean Cummins, Finance Director

Transcription

1 Final Results to 31 March 2015 Paul Hamer, Chief Executive Officer Sean Cummins, Finance Director

2 Who we are Strategic definition Preparation Concept design Navigate local regulations and industry practices Supervise implementation Programme Management & Technical Consultancy Specialise in Asset Creation and International Development Operate client-side - Navigate the route to asset creation & change implementation Strategic relationships based on value High Margins / Low Risk Multi-year contracts and long-term framework agreements Delivered by a team of c.1,400 across UK, Europe, Africa & Asia A global consultancy with a leading position in International Development 2

3 Spread of the business MENA 13% Turnover by region for the full year to March 2015 EAA 23% UK 64% Seven core sectors Urban and Commercial Development Social Development and Infrastructure Defence and Justice Turnover by funding sector Energy and Waste Public Sector 35% Private Sector 33% Transportation Environment Mining and Metals International Development Sector 32% 3

4 Highlights Strong profit growth on increased revenues and significant order book momentum Revenue up 3%* to 130.5m; H2 revenue up 6.5% Profit before tax** up 34% to 5.7m Proposed final dividend of 0.7p (2014: 0.5p) giving total dividend for the year of 1.0p (2014: 0.5p) Acquisition of Alliance Planning in September 2014, performing ahead of expectations Order book up 21% to 105.0m prior to post year end wins Strategic review concludes standalone growth strategy will deliver best value for shareholders * including share of Joint Venture revenues ** before separately disclosed items 4

5 Strategic review Strategic review reaffirmed WYG s differentiated business model and growth strategy including strength and quality of future opportunities Concluded that an appropriately funded independent group is the best route to optimising value for all stakeholders New 25m 5 year committed facility with HSBC to enable investments in next phase of growth Acquisition of FMW Consultancy enhancing WYG s leading position in the UK planning and transport planning sector A developing pipeline of identified acquisition opportunities Board seeking to recruit non-executives with skill sets and connections closely aligned to our end markets Board engaging with shareholders to obtain input on proposals for a new incentive scheme to support growth A positive outcome setting out a clear long-term strategic path to growth 5

6 Consolidated income statement 2015 Total 2014 Total Revenue* Operating profit** Finance costs (0.1) (0.6) Profit before tax** Tax credit Profit after tax** Adjusted diluted earnings per share* 8.6p 6.4p 3% growth in revenue 1.0m positive swing in operating profit year on year; 2.1m H1 to 3.7m H2 driven by focus on quality and growth in revenue 0.5m reduction in finance costs reflects the reduction in our legacy bonds coupled with cheaper facilities Tax credit driven by positive tax position in UK Adjusted EPS based on 70.9m shares * including share of Joint Venture revenues ** before separately disclosed items 6

7 Consolidated balance sheet 31 Mar 2015 actual m 31 Mar 2014 actual m Goodwill Fixed assets Debtors and WIP Fees in advance (10.3) (10.6) Net working capital Creditors (34.5) (36.4) Legacy provisions (8.6) (12.0) Net cash unrestricted Net cash restricted Total net cash Shareholders funds Conditional fees in advance stable as we utilise new bonding facilities Debtors and WIP remain well controlled, working capital days at m decrease in legacy provisions Unrestricted cash of 11.4m after 1.5m acquisition related cash outflow and dividend payments, further reductions in restricted cash 7

8 Consolidated cash flow statement 2015 m 2014 m Operating profit (before separately disclosed items) Depreciation and amortisation Movement in working capital (2.1) Interest and tax (0.4) (0.5) Capex (1.7) (1.4) Cash flow before legacy issues & acquisitions Movement in bonded fees in advance 0.4 (4.0) Legacy cash costs (2.6) (3.8) Pensions (0.8) (0.9) Cash flow before acquisitions & dividends 0.4 (1.7) Acquisitions and disposals (inc costs) (1.5) (1.6) Dividends & treasury share purchases (0.9) - Net cash flow (before exchange movements) (2.0) (3.3) Cash generation before investments driven by: - Strong development in operating profit - Capex controlled and running below depreciation - Reduced interest and tax - Reducing legacy cash cost - Controlled investment in working capital 8

9 Guidance Revenue trend continuation of growth in revenues supported by strong order book Gross margin focus on quality revenues; should improve margin by c.1-2% Operating costs modest growth to support growth of business Interest costs modest increase expected as we utilise our new facilities to support growth Tax still settling down, but c.10% expected with ongoing benefit of UK tax losses Capex similar level to previous year expected, should be below depreciation Debtor & WIP days having reduced to <85 days at 31 March 2015, we are targeting further modest improvement Legacy cash continues to unwind in line with prior year Cash flows we expect to be cash flow positive, before acquisitions and dividends 9

10 UK strong revenue, profitability & order book growth 2015 m 2014 m Revenue growth of 15% Order book growth of 18% ( to 53.0m) Revenue Operating profit/(loss)* Operating margin* 9.2% 7.0% Secured 7 out of 8 key frameworks and confident of further successes ( 15m p.a. growth opportunity) Acquisitions Alliance Planning delivering strongly FMW Consultancy completed Long term demand for our services Major Infrastructure Defence & Energy Residential & Retail Salisbury Plain: Relocating 4,300 troops and their families to the Salisbury Plain Training Area integrating them with the existing military community and civilian population. We set out a Masterplan for the socio-economic framework meeting the Army s desire to create a balanced and sustainable community. *before separately disclosed items 10

11 EAA EU budget delay, strong growth with DfID 2015 m 2014 m Revenue Operating profit* Operating margin* 5.2% 7.4% Europe EU Budget of 960bn for funding cycle delayed but now beginning to generate revenue & strong pipeline Major contracts: - to advise on Poland s first nuclear power station - IPF4 in Western Balkans Diversification into commercial development ongoing major transport studies/defence Market leader in SEE major opportunities Africa and Asia Now established as a trusted supplier to DfID/FCO Delivering challenging programmes for UK plc across fragile states Major programmes & frameworks emerging ( 400m pipeline) - 4 projects - 30m to 100m - FCO Framework fragile states - Secured 1 st project with AfDB (African Development Bank) Intra-ACP (Africa, the Caribbean and the Pacific) Migration Facility: helping ACP countries better understand and manage their migratory flows and the consequences of these flows. *before separately disclosed items 11

12 MENA stable profits; accelerating EU market 2015 m 2014 m Revenue Operating profit* Operating margin* 2.8% 5.6% Successfully closed out major projects in Turkey and Afghanistan UK Plc generating further growth Turkey EU budget approval now unlocking key projects with strong future pipeline ( 100m+) Diversification continues with success in water & waste water (No. 3 in market) Unprecedented levels of bidding activity - 60m over next two months Gulf / MENA Growing support to UK government agencies in Saudi Arabia, Bahrain and Kenya Local partnerships targeting global investment clients to support asset creation Continued prudent approach Technical Assistance for Recruitment of Future Blood Donor Projects: increasing the capacity of government bodies to encourage voluntary blood donation from students across all 81 provinces of Turkey. *before separately disclosed items 12

13 Contractual orderbook summary for FY16 delivery FY 16 Beyond FY March 15 m 31 March 14 m 31 March 15 m 31 March 14 m UK EAA MENA A strong underpin to the year ahead 13

14 m Long-term strategy Key growth themes Fragile states and stabilisation Preserving the global environment Urban development connected cities Significant order book and pipeline of identified work Future Pipeline c 280 m c 85m c 45m c 25m c 435 m Split by client Gilt edged client base UK plc and supra-national institutions Others 13% EU 13% DFID 60% Selective acquisitions with the benefit of new bank facility DIO 15% 14

15 Conclusion and outlook Excellent progress delivering on our reaffirmed strategy with strong profit growth Further substantial uplift in order book and rapidly expanding pipeline Strong focus on cash and working capital management New 25m 5 year committed bank facility enabling accelerated investments UK trading environment improving; emerging pipeline of EU opportunities We are different from our peers: a highly diversified consultancy Enhanced platform enabling focus on growth in asset creation and international development Aspiring to deliver up to 15m PBT by March

16 Appendices

17 Current and Recent Projects Basing Optimisation Programme UK Region MOD Army Basing Plan: 1.6bn programme to support the return of 16,000 soldiers, their families and equipment from Germany to the UK by 2020 MOD Defence Technical Training Change Programme - November 2013 construction management on 150m major base redevelopment RAF Lyneham Hinkley Point C: First new nuclear power station in the UK for 20 years. From 2023 it will provide sufficient power for almost 6 million homes Liverpool Waters: Regeneration of sixty hectares of historic docklands to bring 5.5bn of inward investment and up to 20,000 jobs to the area Wadi Al Asla International IPF (Infrastructure Projects Facility) Western Balkans: 130 projects leveraging 4.5bn of infrastructure investment. November m extension to 2018 CRIDF (Climate Resilient Infrastructure Development Facility) Southern Africa: 18.2m programme to improve access to water for many of the 95 million population of the region Murooj, Jeddah, Saudi Arabia: Masterplanning and infrastructure design for a new city of 170,000 residents, 41,000 houses and associated infrastructure Covasna Romania: Integrated waste management system to benefit a population of over 200,000 17

18 Shareholders As at 15 May 2015 Shareholder % Cumulative % Robert Keith Henderson Global Investors Hargreave Hale Artemis Investment Management Soros Fund Management River and Mercantile Asset Management Majedie Asset Management Franklin Templeton Fund Management GoldenPeaks Capital Henderson Volantis Capital Fidelity Worldwide Investment Others

19 The team Paul Hamer, Chief Executive Officer Appointed Chief Executive in March 2009 Previously Managing Director of VT Nuclear Services, part of Babcock International, and brings with him over 20 years experience in business management, leadership and project delivery Held several senior executive positions in the contracting, nuclear, oil, chemical and petrochemical sectors Chairman of Green Economy Panel Leeds City Region LEP Sean Cummins, Group Finance Director Joined WYG in Dec 2011 as Group Finance Director Previously Group Finance Director at Scott Wilson Group plc and Yule Catto & Co plc 25 years' experience of commercial and operational financial management, including the last 13 years as Finance Director of a plc Graham Olver, Chief Operating Officer Joined WYG in August years UK and International experience as a contractor, developer, investor and COO of a portfolio of high profile innovative infrastructure projects around the world including PPP, Concessions and project finance projects in Energy, Transport, Water, Schools and Hospitals and related international mergers and acquisitions, joint ventures and partnerships Held senior director positions at ALSTOM, RWE Thames Water, Skanska Infrastructure Development Chairman of British Expertise the leading UK private sector organisation for British companies offering professional services internationally 19

20 Management incentive scheme WYG Transformation Incentive Plan ( TIP ) established following the placing Participation extended to c. 60 senior leaders of the Group Options are exercisable at nil or nominal amount only when stretching share price targets are met Share price targets are: % vested in August % vests % vests Shares released 12 months after vesting 50% of future bonus payments to be reinvested in additional shares TIP Scheme Shares Paul Hamer 4,313,720 Graham Olver 1,941,174 Sean Cummins 1,941,174 Group Leadership Team 13,372,531 21,568,599 20

21 Strong acquisition track record FMW Consultancy acquired June m consideration Y/E 31 May 2014: FY15 revenue 1.6m Adjusted PBT 0.3m Cemented strong market position in transport and infrastructure planning Immediately earnings enhancing Focussed on integrating Alliance Planning acquired Sept m consideration - Delta Partnership acquired March m consideration Upper Quartile (75%) acquired May m consideration Contribution since acquisition: FY15 revenue 2.0m Operating profit of 0.4m FY15 revenue 1.2m FY15 revenue 4.8m Created one of the largest planning businesses in the UK Performing ahead of expectations Earnings enhancing in year one Extended aid agency relationships and provided strong presence in Africa Allows greater access to international funders investments in the region Strengthened specialism in fragile states and stabilisation Secured several large contracts with DfID 21

22 Key financial metrics Area Comment Revenue growth +3% +1% Strong performance in the UK offset by slower than anticipated ramp-up of EU funding cycle Profit before tax 5.7m 4.2m 34% increase in PBT, ahead of expectations. Reflecting increase in revenues, improvement in operating margins and lower finance costs Earnings per share (Adjusted and diluted) 8.6p 6.4p 34% growth in diluted EPS, driven by strong profit growth, lower finance costs and UK tax credits Working capital days Continued reduction in working capital days; cash impact offset by unwind of certain end of project accruals. Cash flow before investments 0.3m ( 1.7m) Cash generative prior to investment in acquisitions and dividends. New facility will support future growth Order book 105m 87m 20% increase in order book reflects strong UK pipeline and growth in international work 22