2018 Half Year Results Presentation

Transcription

1 2018 Half Year Results Presentation

2 OUR INVESTMENT PROPOSITION Fulcrum is the UK s leading design, build, own and operate utility connection services provider: National position with fully branded operating model, via direct delivery model Customer service led, broad offering, with end-to-end customer experience Growing estate of assets, gas pipeline and meters, with electricity cables from early 2018 Established customer base with over 1,200 clients and repeat revenues ~60% Proven track record of consistent, profitable performance: Double digit operating margins Strong cash generation and robust balance sheet Progressive dividend policy Growth strategy established and delivering: Key accounts / major projects / housing / technical sales Acquiring utility assets internally and externally Electricity and multi-utility services Commercial markets - positive underlying profit growth drivers: Regulated market for asset ownership provides barriers to entry 2

3 FINANCIAL AND OPERATIONAL HIGHLIGHTS HY2018: continual profit improvement and cash generation Delivered on our key objectives: Record EBITDA of 4.0m (2016: 3.5m) Operating cash flow of 1.9m, after investing 1.3m in pipeline assets Cash increased to 14.5m (2016: 12.5m) Interim dividend for FY2018 announced at 0.7p (2016: 0.6p) Strength in the order book, up 11% since year end to 33.7m Significant new contracts won, underpinned by a core portfolio of projects < 50k Utility assets secured ramping-up, annualised run rate 10m, with high yield Debt facility being pursued to support anticipated growth idno licence obtained, electricity asset adoption from early 2018 Ongoing operational efficiencies implemented 3

4 FINANCIAL PERFORMANCE Interim results HY2018 4

5 INCOME STATEMENT Continual improvement in profitability Revenue up 1.5m, +8.3% EBITDA 4.0m, +14.2% PBT 3.7m, +19.4% Overheads reduced, as cost base rationalised and reinvested Dividend increased in line with policy Tax charge is deferred tax asset unwind Six months ended 30 Sep 2017 Year ended 31 Mar 2017 Restated Six months ended 30 Sep 2016 Revenue Gross margin Gross margin (%) 38.8% 40.8% 40.9% Overheads (3.6) (8.1) (3.9) EBITDA Share based payments (0.0) (0.2) (0.1) Depreciation and amortisation (0.3) (0.6) (0.3) Profit before tax EBITDA analysis HY2018 HY2017 Taxation (0.6) (1.3) (0.6) Profit after tax Construction Pipelines Total Earnings per share 1.8p 3.3p 1.6p Adjusted earning per share 2.2p 4.1p 1.6p Interim dividend per share 0.7p 1.9p 0.6p 5

6 BALANCE SHEET Strengthened net assets position Assets increased with sustained investment in gas pipelines and meters Investment in idno of 0.3m Working capital efficiently managed Cash balance increased to 14.5m Net assets increased by 3.6m 30 Sep Mar Sep 2016 Tangible utility assets Tangible assets - other Intangible assets Deferred tax assets Non-current assets Inventories Trade and other receivables Cash Current assets Trade and other payables (11.7) (12.5) (12.0) Deferred income (15.6) (14.5) (13.9) Restructuring provisions - - (0.1) Deferred tax liabilities (0.7) (0.7) (0.7) Total liabilities (28.0) (27.7) (26.7) Net assets

7 CASH FLOW Strong cash generation Cash generative business model Continual emphasis on working capital management 1.3m pipeline investment No corporation tax payable due to brought forward tax losses 2.3m FY17 final dividend paid in October 2017 Six months ended 30 Sep 2017 Year ended 31 Mar 2017 Six months ended 30 Sep 2016 EBITDA Changes in working capital (0.7) Cash generated Investment in utility assets (1.3) (2.5) (1.0) Investment in idno (0.3) (0.0) -- Investment in fixed & intangible assets (0.3) (0.6) (0.1) Dividends paid - (2.0) - Proceeds from issue of share capital Increase in net funds Net funds brought forward Net funds carried forward

8 GROWING ASSET BASE Increased estate of high yield utility assets Asset growth is core component of strategy Mix of domestic, industrial and commercial gas pipeline and meter assets across the UK Annualised income of 1.8m and growing Low cost to serve, 40 year pipeline life Growth in core business will build asset base External utility assets acquisitions increasing, with 7.5m committed at 30 September Annualised acquisition run-rate 10.0m idno licence obtained in November, asset adoption from early 2018 Estate growth run-rate expected to increase with combined gas and electricity licences Debt facility being pursued to support anticipated growth Item Annualised transportation income Units Sep 2017 Mar 2017 Sep Tangible assets NBV Estate size km Registered supply points No. 18,706 16,250 13,104 8

9 OUR GROWTH STRATEGY 9

10 OUR PLATFORM FOR GROWTH Advance our profitable and scalable business model We will: Always put safety first Continue to pursue our infrastructure growth strategy Push for ever greater levels of customer service, in H (82% of customers rated us as Great ) Accelerate growth in gas pipeline and meter ownership Adopt electricity assets from early 2018 Expand into the electric vehicle (EV) charging infrastructure market with a compelling design, build, own and operate proposition Continually focus on reducing costs of delivery Continue to invest in: IT to enhance customer service and delivery efficiency Our people development Expand the direct delivery capability, with more teams being upskilled to deliver electrical work 10

11 TARGETED GROWTH STRATEGY Dedicated teams driving sales growth Key accounts Housing Technical sales Major projects H1 FY18 revenue: 5.5m 6.1m 2.1m 5.0m Sales order book Sep 17: 7.0m 14.1m 3.6m 9.0m Sales order book Mar 17: 6.9m 12.0m 2.8m 8.6m TOTALS 18.7m 33.7m 30.3m Enhancing relationships with largest repeat customers Growing pipeline of larger and dual fuel opportunities Developing EV solution partnerships Secured contracts for major developments across the UK Growing pipeline of opportunities Increased investment in sales and delivery teams In-house gas, electricity and water experts Cost-effective delivery model Increased investment in sales and delivery teams Responsive and proactive, customer-led technical sales service Enquiries via web, phone, contacts Online development driving increased opportunities 11

12 OUTLOOK Grow, expand services and assets, distribute returns Achieved market expectations for over four years We will continue to enhance shareholder value by: Growing infrastructure sales across our four channels Further expanding into electricity and multi-utility, including the UK electric vehicle charging infrastructure market Increasing our ownership of gas assets and start adopting electricity assets Reducing our cost of delivery Acquisitions - at the right price Sustainably increasing dividends We are confident for the full year 2018 and beyond 12

13 APPENDICES 13

14 WHO WE ARE AND WHAT WE DO End-to-end service: design, construction and adoption Opportunity generation In-house utility design Planning and construction by direct delivery teams What sets us apart? Installation and asset adoption Customer service excellence driving repeat business and long-term revenue from asset ownership 14

15 DIVERSE, NATIONAL CLIENT BASE Established network of repeat customers Over 1,200 clients nationwide, including: Where we work: Key accounts Major projects Housing Projects completed in H1 15

16 UK GAS ASSET OWNERSHIP 16

17 PAYMENT ARRANGEMENTS 17

18 INFRASTUCTURE PARTNERS Growing network of UIP and ICP partners Including: UK wide adoption: Fulcrum Pipelines, assets owned 18

19 CASE STUDY 2.4m gas infrastructure for three UK STOR sites Fulcrum secures 2.4m in new contracts to install new gas infrastructure to three purpose built Short Term Operating Reserves (STOR) sites. The three contracts, totalling 2.4m for Fulcrum, will see the installation of 4km of new gas infrastructure between the three sites. These small-scale, gas powered, power stations will be used as STOR sites and will generate electricity to be fed back into the grid at times of peak demand. Upon completion, Fulcrum will adopt, own and operate all three pipelines, adding to the Company's expanding asset base. Fulcrum will be installing the meters on each site, these will also be adopted and owned by Fulcrum. 2.4m Awarded in gas infrastructure contracts 4km Of new gas pipeline infrastructure Gas asset adoption by Fulcrum Pipelines 19

20 CASE STUDY 0.4m fuel conversion contract for Scottish Distillery Fulcrum awarded 0.4m contract to install a 1.8km gas pipeline to convert Deanston Distillery to natural gas. The new 1.8km pipeline involves a complex installation, passing through multiple terrains including bridge crossings and highways. The pipeline aims to be constructed with minimum disruption to the environment and disruption to the local community, whilst providing potential economic and environmental benefits the to residential and commercial premises it passes. KG to source photo Upon completion, Fulcrum will adopt, own and operate the pipeline and the gas meter, adding to the Company's expanding asset base. This investment is great news for the Distillery as it will bring a reliable, clean, energy source to the facility, while reducing our carbon footprint. Alan Wright, Head of Operations Distell International 0.4m Fuel conversion contract 1.8km Gas pipeline Gas asset adoption by Fulcrum Pipelines 20

21 CASE STUDY New housing site, full multi-utility infrastructure installation Fulcrum secured and is delivering a multi-utility scheme to a new housing development in the West Midlands on behalf of a national house-builder. The project will see the installation of approximately 0.2km of gas mains, 0.7km of water pipe and over 1.0km of electricity cables to the site as well as the installation of a substation. Upon completion, Fulcrum will adopt, own and operate the gas infrastructure and gas meters. 0.2m Gas, water & electricity infrastructure contract Housing development Gas asset adoption by Fulcrum Pipelines 21