Half Year Results to September 2013 Paul Hamer, Chief Executive Officer Sean Cummins, Finance Director

Transcription

1 Half Year Results to September 2013 Paul Hamer, Chief Executive Officer Sean Cummins, Finance Director Crown Copyright

2 Who we are Strategic definition Preparation Concept design Navigate local regulations and industry practices Supervise implementation Project management & technical consultancy Specialising in front-end enabling services Working on the client-side: higher margin, lower risk Helping navigating the route to asset creation & change implementation Multi-year contracts & long-term framework agreements For private, public & donor-funded sector clients Delivered by a team of 1,300 across UK, Europe, Southern Africa & Asia A global consultancy and a market leader 2

3 Spread of the business Turnover by region for the 6 months to 30 September 2013 Seven core sectors EAA 31% UK 55% Defence and Justice MENA 14% Environment Energy and Waste Turnover by funding sector* Urban and Commercial Development Other Public Sector Funded 34% Private Sector 34% Transportation Mining, Metals and Minerals Social Development and Infrastructure Donor funded 32% 3

4 Recent achievements New management team appointed in 2009 to restructure the Group Transformed the Group: reduced headcount by c.60%; closed 40 offices introduced critical risk management and governance processes Capital restructuring and refinancing Returned to profitability Improving efficiency by focussing on key regions and sectors Organic and acquisitive growth of the business 4

5 Highlights Revenue growth, significant improvement in profitability increased order book and improved cash flow Strong performance with significant improvement across all key metrics Revenue showing modest increase Significant improvement in profitability Positive operating cash flow over a 12 month period Investments in growth enabled by strong cash and good working capital management Major contract win momentum underpinned growth in the order book 5

6 Consolidated income statement H1 6 months to Sep 2013 H1 6 months to Sep 2012 Revenue Operating profit Finance costs (0.3) (0.5) Profit/(loss) before tax* 1.4 (0.4) Tax charge (0.2) (0.1) Profit/(loss) after tax* 1.2 (0.5) Adjusted earning / (loss) per share* 1.8p (0.8p) 3.4% revenue increase stronger underlying growth excluding 1.5m RoI sales in prior period 1.6m positive swing in operating profit driven by revenue increase (one third) and focus on quality margin revenue primarily 0.2m reduction in finance costs reflects tapering cost of legacy bonds * Before separately disclosed items 6

7 Consolidated balance sheet 30 Sep 2013 actual 30 Sep 2012 actual Goodwill Fixed assets Debtors and WIP Fees in advance (13.8) (16.9) Net working capital Creditors (37.2) (34.5) Legacy provisions (16.0) (18.1) Net cash unrestricted Net cash restricted Shareholders funds Conditional fees in advance reduced as expected Debtors and WIP reductions fund fees in advance unwind over 2 years 2.1m decrease in legacy provisions; reducing lease terms and redundancies effected Unrestricted cash of 12.5m after investments 7

8 Consolidated cash flow statement 12 months to September months to September 2012 Operating profit (before separately disclosed items) Depreciation and amortisation Movement in working capital Interest and tax (0.7) (1.6) Capex (0.9) (2.2) Cash flow before legacy issues & acquisitions Movement in bonded fees in advance (2.9) (4.3) Legacy cash costs (4.5) (9.1) Cash flow before acquisitions 0.3 (11.3) Acquisitions (inc costs) (0.6) - Net cash flow (0.3) (11.3) Opening unrestricted cash Closing unrestricted cash Modest but positive cashflow before acquisitions, driven by: Improving operating profit Capex halved and running below depreciation Reduced interest and tax A good working capital position 8

9 Full year guidance Revenue trend continuation of modest growth in revenues Gross margin focus on quality revenues; should improve margin by c.1-2% Operating costs very modest reduction Pension accounting c. 200k impact on operating profit in full year; interest charge reduced by the same Interest costs continued reduction as EU bonds mature Tax still settling down, but c.10-15% expected with benefit of UK tax losses Capex slight increase from first half as we upgrade our IT software Debtor & WIP days having reduced through 100 days at 31 March 2013 now target <90 for this year end Legacy cash continues to unwind in line with first half Cash flows underlying cash flows continue to strengthen H2 should be positive, subject to any investments in acquisitions etc 9

10 UK improving market, improving margins H H Revenue UK 61% Operating profit/(loss)* 0.3 (0.8) Operating margin* 1% -1% Defence Market-leading position driving growth and further opportunity Energy Increased activity in nuclear with Sellafield decommissioning and confirmation of new build programme Urban Development - House building stimulus accelerating activity for our multidisciplinary teams Education and Health Top 3 position with upturn in spending across higher education institutions and specialist laboratories. Basing Optimisation Programme, UK: optimising the British Army s estate so personnel and their families have a stable base from which to live and work, while Britain as a whole benefits from the economic savings delivered by the project. *before separately disclosed items 10

11 EAA strong performance, engine for growth H H Western Balkans Market leader with major pipeline of opportunity building on IPF programme Revenue Operating profit* Operating margin* 6% 4% Croatia accession to EU will see significant increase in funding Poland seeing an anticipated lull ahead of next funding cycle Africa Growth opportunities built upon CRIDF win. Expanding into West and East Africa in support of IFIs Asia Leading provider of Climate Change advisory services Upper Quartile investment far exceeding expectations. International Technical Assistance Programme of Support to Local Economic Development in the Eastern Cape Province, South Africa: tackling poverty through the empowerment of local people. *before separately disclosed items 11

12 MENA niche markets, continued investment H H Revenue Operating profit* Operating margin* 3% 4% Further success in our primary sector of socio-economic consultancy Market leading position in water sector Expertise in environment and climate issues being recognised Success in diversifying into local markets Continued work in Afghanistan and first contract win in Libya Strong opportunities with local partners in Qatar / Saudi. Water and Wastewater Infrastructure, Turkey: actively supporting the government in meeting the levels of environmental compliance that are a prerequisite in enabling the country to move a step closer to joining the EU. *before separately disclosed items 12

13 Delivering on our strategy Strengthening core customer relationships Following client activity to grow from key regions Gaining access to growth markets through partnership and acquisition Further diversification for growth Recruiting and developing business winners Creating top line growth Improving business performance +9 Mar 14 Complete 15m PBT Journey by 2015/16 Legacy cost reduction -6 13

14 Key growth themes Fragile States & Stabilisation Identified DFID as potential key client (links with existing clients: MOD and FCO) Successful in gaining access to a number of frameworks (GEFA and Wealth Creation) Previously not on the FCAS framework investment in Upper Quartile LLP in May 2013 brought access September 2013 awarded first contract in Libya. Preserving the Global Environment Linking clients and programmes such as UK Met Office and climate resilience o Tajikistan building climate resilience in the Pyanj River Basin, home to more than 1.2m people, funded by ADB o o Southern Africa CRIDF working in consortium on 18.2m contract over 2 years with potential to extend Turkey various water, waste water and projects using technical references gained in UK and around the world. Urban Development & Connected Cities Deploying UK masterplanning and transportation expertise around the world o o o Wadi Al Asla Jeddah, Saudi Arabia masterplanning and infrastructure design for a new city of 170,000 residents, 41,000 houses and associated infrastructure Bulgaria advising the municipalities of Burgas and Plovdiv on new integrated public transport systems as part of investment programmes totalling c. 75m Prospects in Qatar, Southern Africa & Turkey. 14

15 Conclusion and outlook Further progress, delivering on our strategy with return to profit and margin growth Strong cash and good working capital management enabling investment Management incentivised to deliver shareholder value Strong platform from which to focus on achieving sustainable growth Targeting 9m+ PBT by 2015/16 15

16 Appendices Crown Copyright 16

17 Current and Recent Projects UK Region MOD Army Rebasing Plan: 1.6bn programme to support the return of 16,000 soldiers, their families and equipment from Germany to the UK by 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. Hinkley Point C 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. International IPF (Infrastructure Projects Facility) Western Balkans: 130 projects leveraging 4.5bn of infrastructure investment. November m extension to CRIDF (Climate Resilient Infrastructure Development Facility) Southern Africa: Improving access to water for many of the 95 million population of the region. Wadi Al Asla Wadi Al Asla 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.

18 Shareholders As at 30 September 2013 Shareholder % Cumulative % Artemis Golden Peaks Hargreave Hale Robert Keith Soros Legal & General Henderson Aviva Fidelity Rivers & Mercantile Franklin Templeton Others

19 The team Paul Hamer, CEO 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 Immediate Past Chairman of ACE Association for Consultancy and Engineering 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 restricted to Group Leadership Team, consisting of 20 most senior leaders in 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