Preliminary Results to March 2013 Paul Hamer, Chief Executive Officer Sean Cummins, Finance Director

Transcription

1 Preliminary Results to March 2013 Paul Hamer, Chief Executive Officer Sean Cummins, Finance Director Crown Copyright

2 Group overview Strategic definition Preparation Concept design Navigate local regulations and industry practices Supervise implementation A specialist in front-end enabling services Support clients to create an asset or facilitate change programmes Key client bedrock grow as they grow Higher margin / lower risk positioning High proportion of contracts are over several years or long term framework agreements A global project management and technical consultancy 2

3 Spread of the business ESAA 26% Turnover by region* UK 60% Seven core sectors 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% *Based on revenues for the year ended 31 March

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 4

5 Highlights Results ahead of expectations following a strong second half Return to profit before tax* for the full year; strong H2 on H1 improvement UK Region delivered an operating profit for the 12 month period Improved profitability in ESAA; stable profits in MENA following investment Overall trading performance ahead of the Board s expectations Revenue and order book reflect planned reduction in non-core markets Reduced legacy costs ahead of expectations Cash position at 31 March 2013 ahead of the Board s expectations *before separately disclosed items 5

6 Consolidated income statement H1 6 months to Sep 2012 H2 6 months to Mar Total 2012 Total Total revenue Operating profit/(loss)* (3.5) Finance costs (0.7) (0.4) (1.1) (2.3) (Loss)/profit before tax* (0.4) (5.8) Tax charge (0.1) - (0.1) (0.5) (Loss)/profit after tax* (0.5) (6.3) Adjusted (loss)/profit per share* (0.8p) 1.7p 0.9p (7.4p) * Before separately disclosed items 6

7 Consolidated balance sheet 31 March 2013 actual 31 March 2012 actual Goodwill Fixed assets Debtors and WIP Fees in advance (15.2) (22.6) Net working capital Creditors (33.9) (34.9) Legacy provisions (17.8) (26.1) Net cash* Shareholder funds * Includes restricted access amounts 7

8 Consolidated cash flow statement Operating profit (before separately disclosed items) 1.8 (3.5) Depreciation and amortisation Movement in working capital 5.6 (1.1) Movement in bonded fees in advance (6.2) (4.0) 2.9 (6.7) Interest and tax (1.0) (2.5) Capex (1.3) (2.0) Debt write off and capital restructuring Legacy cash costs (6.2) (9.4) Movement in net cash (5.6) 53.4 Opening net debt 24.2 (29.2) Closing net cash Restricted cash Unrestricted cash

9 Guidance Revenue trend we are not planning growth in revenue this year Gross margin focus on quality revenues; should improve margin by c.1-2% Operating costs very modest reduction Interest costs further reduction as EU bonds mature Tax still settling down, but c.15% expected Capex slight increase from previous year as we upgrade our IT software Debtor & WIP days having reduced through 100 days now target <90 for this year end Legacy cash 3.5m against provision, 4.5m further unwind of EU advances Cash balance we expect to be slightly cash positive this year *before separately disclosed items 9

10 UK stable with improving margins New UK Plc strategy creating growth opportunities across the business Revenue UK 61% Operating profit/(loss)* 0.1 (4.7) Operating margin* 0% -6% Defence and Justice - Central government clients drive for efficiency across their estates creating growth Energy Nuclear and renewables contributing strongly to overall regional performance Urban Development Planning and permissions for residential and retail markets remain strong FY14 order book cover 34% 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 MENA a year of investment, growth in the Gulf Revenue Operating profit* Operating margin* 1% 1% Turkey - performed well and diversification into new sectors continues Gulf Trading Platforms and key partnerships established Targeting Gulf and North Africa growth through: Following core clients into Fragile States MOD / DFID Sector focus in Tier 1 countries KSA/Oman/Qatar/Libya FY14 order book cover 73% 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 11

12 ESAA merged & strengthened, the engine for growth Revenue Operating profit* Operating margin* 5% 3% Continued success as market leader across Western Balkans IPF1 to IPF3 Localisation creating growth WYG Croatia /WYG South Africa Diversification success CRIDF, and GEFA and Wealth Creation Frameworks Significant future growth opportunities with donors DFID/EBRD/ADB FY14 Order book cover 79% 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 12

13 Delivering on our strategy Strengthening core customer relationships Following client activity to grow from key regions Gaining access to growth markets; partnership and acquisition Creating top line growth +9 Cash and profitability focussed Building quality revenues Improving utilisation Improving business performance Mar 14 Complete 15m PBT Journey by 2015/16 IT, PI, property and overheads reducing ahead of plan Legacy cost reduction -6 13

14 Key opportunities/market drivers UK Growth across core client base MOD/MOJ/FCO Critical need for Energy Nuclear, Renewables and Green Energy Deepening our Enabling Services Urban Design and Site development MENA Fragile States and Stabilisation support MOD/FCO/DFID Emerging Markets Opportunity Libya/Iraq Urbanisation across Turkey and Region Planning, Infrastructure and Transport ESAA Major pipeline of opportunity with DFID 3 major frameworks Maintain leadership position across Accession countries IPF 4 Grow our emerging territories Africa/Asia Collaborating with global players and recruiting sector specialists to drive growth 14

15 Stabilisation our key growth theme Principles Grow domestic clients in international markets Follow the People Acquire access to new funding stream Follow the Money New Combined Fund MOD FCO DFID FCAS & Stabilisation Framework CEST and Fragile States Embassy Roll-Out and Upgrades GEFA Wealth Creation Highland/WYG Access to small and large opportunities 15

16 Conclusion and outlook Considerable progress, delivering on our strategy Better than expected return to profit and strong finish in FY 2013 Strong cash performance continues into new financial year Enhanced business performance generating organic margin growth Anticipate profit 10% higher than current FY 2014 consensus Reviewing selective acquisitions to accelerate growth in key markets Management incentivised to deliver shareholder value Strong platform from which to focus on achieving sustainable growth WYG targeting 9m+ PBT by 2015/16 16

17 Appendices Crown Copyright 17

18 Consensus 3 June / /14 Revenue Profit before taxation Margin 0.0% 2.5% Net Cash Source: Numis 18

19 Group history Heavy exposure to UK/Irish markets acquisitions including 12 in Ireland and Northern Ireland 1997 Merger of Ernest Green and White Young to form White Young Green plc (market cap 12m) 1999 Entered Ireland 2000 Established international business Over geared Lack of focus Un-integrated acquisitions High risk environment Deteriorating market conditions Substantial operational and financial restructuring 2009 New management team Launched three part strategy Refinancing for survival Headcount reduced from 3,500 to c.1, office closures in UK & Ireland Focus on core capabilities Introduced critical risk management and governance processes 110m annualised cost reduction 2011 Capital restructuring and refinancing for growth 19

20 Capital raising Capital raising completed within a six week timescale on 12 July Raised 30m net of expenses through a placing on AIM. Placing was oversubscribed. Resulted in a much strengthened balance sheet and significant positive cash balances. Shareholders as at 15 May 2013 Shareholder % Cumulative % Artemis Golden Peaks Legal & General Hargreave Hale Robert Keith Soros Aviva Henderson Fidelity Others

21 The team Mike McTighe, Chairman Appointed to the Board in August 2009 Chairman of Volex Group plc and JJB Sports PLC, a member of the Board of Ofcom and Chairman of a number of private companies Ex Chairman of Pace plc, previously Chairman and CEO of Carrier I International S.A. and Executive Director and Chief Executive, Global Operations of Cable & Wireless plc 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 and is Chairman of British Expertise the leading UK private sector organisation for British companies offering professional services internationally 21

22 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: % vests % vests % vests 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 22