HALF YEAR RESULTS ENDING 2 FEBRUARY 2018

Transcription

1 HALF YEAR RESULTS ENDING 2 FEBRUARY 2018 Matt Armitage CEO Brad Gray CFO

2 AGENDA Overview 2018 Half Year Results Strategy Update Summary & Outlook New photo to be supplied by CKD 2

3 OVERVIEW Positive growth in both Group revenue and Group adjusted profit before tax Encouraging Strategic Marketing performance, delivered like-for-like revenue growth of 23% Strategic Marketing now represents 85% of adjusted operating profit Disposal of three businesses within the Marketing Activation segment for 6.0m, in line with our strategy, reducing the Group s exposure to commoditised print markets 1.5 Net Debt: improved by 23% at 42.2m (July 2017: 54.6m)

4 2018 RESULTS FOR HALF YEAR ENDING 2 FEBRUARY 2018 Brad Gray CFO 4

5 FINANCIAL SUMMARY Income Statement Revenue Total revenue growth of 7% Operating profit* % % Profit before tax* Adjusting items (27.7) (12.6) Statutory loss before tax (15.0) (3.1) Earnings per share* 7.06p 5.26p PBT +35% EPS +34% Interim dividend 0.65p 0.65p * Adjusted Results Figures are for continuing operations 5

6 ADJUSTING ITEMS Key: HY18 20 HY (0.1) (0.5) Acquisition costs* Restructuring items Gain on disposal of properties St Ives Defined Benefits Pension Scheme costs Total * Includes impairment, amortisation of acquired intangibles, contingent consideration and deferred consideration Figures are for continuing operations 6

7 SEGMENTAL SUMMARY Strategic Marketing Revenue 91.7m 75.8m Operating profit* 12.0m 5.9m Operating margin* 13% 8% Like-for-like revenue growth of 23% offset by currency translation of 2% Marketing Activation Revenue 17.4m 19.5m Operating profit* 1.4m 2.3m Operating margin* 8% 12% Disposal of manufacturing businesses in Marketing Activation Books Revenue 37.4m 41.4m Operating profit* 0.8m 2.7m Operating margin* 2% 7% Revenue decline of 10% due to Harper Collins *Adjusted Results 7

8 REVENUE PIPELINE - STRATEGIC MARKETING 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Six Month Outlook H % 4% 11% 17% 90% 10% 31% 16% 80% 22% 70% 60% 50% 34% 86% 40% 73% 61% 30% 20% 35% 10% 0% Q3 Q4 As at October 2017 As at March 2018 Key: Qualified pipeline Negotiating Confirmed 8

9 CASH FLOW Key: Inflow Outflow Total - Adjusted EBITDA Working capital Tax & interest Net Capex Underlying FCF Deferred consideration Pension payment Adjusting items FCF Strong underlying FCF generation EBITDA adjusted for non-cash items 9

10 LIQUIDITY Net debt EBITDA (rolling 12 months)* Net debt/ebitda* 1.2x 1.6x Pension Assets Liabilities (364.8) (370.5) Deficit Interest cover (rolling 12 months)* 10.5x 9.0x Financial gearing 63% 56% *Adjusted Results 10

11 DEFERRED CONSIDERATION H2 18 FY19 Total Cash Shares Total Solstice maximum deferred consideration TAB best estimate of deferred consideration based on latest forecasts TAB 2 nd deferred consideration of 1.4m, paid and excluded from above 11

12 MAXIMUM DEFERRED CONSIDERATION INCREMENTAL Consideration Consideration EBITDA Remaining maximum Estimated Incremental Cash Shares Incremental TAB

13 BALANCE SHEET Fixed assets Goodwill Working capital (5.4) 8.2 Net debt reduced by 23% at 42.2m Income taxes 0.1 (1.3) Net debt (42.2) (54.6) Deferred consideration (27.4) (15.9) Net asset held for sale 6.0 Deferred tax (0.2) (0.9) Net assets held for sale of 6.0m for Marketing Activation businesses Pension (15.8) (16.0) Net Assets

14 STRATEGY UPDATE Matt Armitage CEO 14

15 REPORTING SEGMENTS BOOKS 5% STRATEGIC MARKETING 85% MARKETING ACTIVATION 10% % share of Group Adjusted operating profit 15

16 MARKETING ACTIVATION Disposal of Point-of-sale, Event and Exhibition and Field Marketing businesses Outsourcing solutions to clients including Royal Mail, The Co-operative Group and Conservative Party 17.4m (11)% decline BOOKS Leveraging our well-invested digital print technology to provide a broader product range Decline in revenue as a result of the announcement of prior year contract loss 37.4m (10)% decline 16

17 STRATEGIC MARKETING DIGITAL 56.7m 36%* DATA 16.8m 1%* INSIGHT 18.2m 4%* Continued alignment of overall digital proposition Single proposition developed, branding under review Significant number of new client wins including Amgen and Valeant Significant new client wins and contract renewals Solstice s CEO, J Schwan, to London to serve as the group s first Chief Digital Officer The combined proposition has already been responsible for new business wins and existing client growth Increased collaboration with the Digital businesses has delivered a number of joint clients and opportunities Further expansion of international footprint particularly within the US. Hive and Pollen are now in New York and Boston Growing collaboration between Pragma and FSP, working with clients *Revenue growth 17

18 CURRENT FOCUS FOR GROWTH INTERNATIONALISATION COLLABORATION ACQUISITION 18

19 SUMMARY & OUTLOOK Encouraging performance within Strategic Marketing in the first half Increased collaboration generating new business Debt levels reduced Positive outlook into the second half of the financial year 19

20 THANK YOU Website: st-ives.co.uk 20