Calibre Group FY18 Full Year Results. September 2018

Transcription

1 Calibre Group FY18 Full Year Results September 2018

2 Group Overview Operating cash flow up 110% Increased revenue up 25% Strategic divestment of G&S finalised Strong forward FY19 order book $420m FY2018 LOOKING FORWARD Operating cash flows up 110% from prior year resulting from several working capital initiatives implemented. Agreement to issue $17.1m in Series B Preference Shares as new equity replacing the Series A Convertible Notes and reducing gross debt. Higher continuing business revenue anticipated. Increased focus on internal efficiencies and reducing costs. Materially higher earnings expected. Strong forward FY19 order book of $420m - renewed growth in Resources and Infrastructure markets. P2

3 Our Brands, Our Vision, Our Purpose Our Vision is to become Australia and New Zealand s most respected employee driven engineering and utilities services partner. Our Purpose is Turning Knowledge into Value. P3

4 Our Values and Sectors of Operation SECTORS VALUES Building & Structures Building Services & Renewables Government Major Projects We do what we say We succeed together Mining & Resources Technologies Transport & Rail Urban Development Utilities We care for people s wellbeing Front of Mind Key to Our Behaviour We go above and beyond Water & Environment P4

5 Financial Results Overview KEY FINANCIAL RESULTS % MOVEMENT COMMENTARY Revenue ($m) % Revenues of $443m from Construction and Maintenance (up 37%) underpinned by Diona's strong growth within the Underlying EBITDA ($m) (33.7%) underground services utilities market. $172m from Professional Services (up 3%). Underlying EBITDA margin (%) 1 2.8% 5.3% (47.0%) Reported EBITDA ($m) 1 (35.3) 18.6 (289.8%) Operating cash flow ($m) % Net profit/(loss) after tax ($m) (62.9) 0.1 Earnings/(loss) per share (cents) (18.8) 0.04 Dividend per share (cents) - - Underlying Construction & Maintenance EBITDA of $23.8m up from $21.8m in the prior year and is underpinned by a strong Diona contribution of $14.8m. Underlying Professional Services EBITDA of $1.3m, down from $6.9m in the prior year. Improvements anticipated, with steps taken to resize some business areas. Reconciliation of underlying to reported EBITDA ($m) Underlying EBITDA Less: Impairments (33.7) - JV project losses (9.1) - Strategic sale costs (8.2) - Acquisition and restructure costs (1.4) (7.2) 1 Underlying results adjusted to include all discontinued operations Reported EBITDA, including impairments (35.3) 18.6 P5

6 Cash Flow Overview ($m) SUMMARY CASH FLOWS COMMENTARY Underlying EBITDA Operating cash flow for the period was $17.8m, an increase of 110% on prior year driven by several working capital initiatives JV EPC project loss (9.1) - implemented. Net working capital movements 9.8 (17.5) Income tax (paid)/received Net operating cash flow Payment for acquisitions (30.7) (16.5) Capital expenditure (4.6) (3.5) Net Interest paid (8.0) (4.0) Borrowings repaid (83.9) (14.7) Proceeds from borrowing Proceeds from issue of shares Share buy-back - - Net cash generation 5.4 (5.2) Opening cash balance Closing cash balance $30.0m of the acquisition payments reflected final earn-out payments from the 2016 Diona acquisition. Payments settled through the issue of $25.0m in convertible notes and $5.0m in additional borrowings Net capital expenditure of $4.6m was invested in PP&E and system upgrades, which will underpin business efficiency opportunities going forward. Higher interest cash outflows in FY18 arose from the higher paid in kind interest costs associated with convertible notes, as part of the new refinancing arrangement implemented during the year. P6

7 Balance Sheet Overview ($m) Calibre ex G&S 1 Summary COMMENTARY Working capital (1.2) Fixed assets Intangible assets Other assets Tax assets Provisions (29.8) (29.9) (36.8) (43.3) Total funds employed Comprising of: Gross bank borrowings Convertible equity notes Finance leases Less: cash (21.7) (14.2) (22.1) (16.7) Net borrowings Contingent consideration Equity Debt plus equity Pro-Forma 2 Summary on the basis all businesses were a continuing business for the full year The requirement to adopt AASB 5 for the year due to the decision to sell all/part of the businesses as resulted in an unconventional balance sheet being reported. Subsequent to year end, G&S Engineering was sold and all other businesses were no longer held for sale. As a result, pro-forma 30 June 18 balance sheets have been presented on the basis that the sale of G&S Engineering had been finalised at 30 June 18. It was in fact finalised subsequent to year end but before the accounts have been signed. Calibre made $3.8m in scheduled debt repayments during the year. After this, the $29.5m increase in net borrowings to $89.7m arose largely from debt funding, largely by way of the issue of convertible notes, for the partial payment of $30.7m of deferred acquisition payments. Intangible assets are down from prior year driven largely by the fair value revaluation and following impairment required at 30 June 2018 of $33.7m. Calibre Group closed with a strong cash balance at 30 June 2018 of $22.1m driven by an improved overall working capital result for the year. P7

8 Balance Sheet Overview continued ($m) Calibre Pro-Forma COMMENTARY Working capital (1.2) 17.3 Fixed assets Intangible assets Other assets Tax assets Provisions (29.8) (29.9) Total funds employed An additional pro-forma version of Calibre's balance sheet as at 30 June 18 has been presented to illustrate the impact of the increase in equity of $17.1m from the issuance of the Series B Preference Shares on 24 September This preference share issue was finalised as a subsequent event to year end but before the accounts have been signed. Given the material nature of the equity issue, it was considered appropriate to provide this additional pro-forma balance sheet. The resulting impact is a reduction in net borrowings of $17.1m a significant improvement to Calibre s current debt profile. Comprising of: Gross bank borrowings Convertible equity notes Finance leases Less: Cash (21.7) (14.2) Net borrowings Contingent consideration Equity Debt plus equity Calibre Pro-Forma Balance Sheet excluding G&S and reflective of the issuance of Series B Preference Shares P8

9 Construction and Maintenance Underlying EBITDA FY18 $23.8m from $21.8m Revenue FY18 $443m from $324m up 9% up 37% DIONA Significant increases in revenue underpinned growth within the underground services utilities market. Successful in securing a position on a great number of water and energy projects with four recent major awards exceeding $105m in total. Strong order book and higher predicted revenues for FY19. G&S Earnings for the year significantly impacted by a loss of $9.1m from the joint venture with DRA delivering the Mt Pleasant CHPP fixed price contract. Strategic divestment of G&S completed post year end on 4 August P9

10 Professional Services Underlying EBITDA FY18 $1.3m from $6.9m Revenue FY18 $172m from $166.4m down 81% up 3% CALIBRE PROFESSIONAL SERVICES Minor increase in Professional Services revenue of 3.4% arising largely from resource sector clients. Overall earnings result fell well below expectations with management subsequently taking steps to resize areas of the business and reduce controllable costs in August Strong ramp-up expected for FY19 within the WA resource sector reflected by work won. Capital invested into system upgrades in FY18 has positioned the business with the tools necessary to support focus on internal efficiencies and reduction of controllable costs. P10

11 Contacts Craig Allen Group Chief Financial Officer Calibre Group Limited Tara Dennis Company Secretary Calibre Group Limited enquiries@calibregroup.com enquiries@calibregroup.com P11

12 Disclaimer and additional information This presentation has been prepared by and concerns Calibre Group Limited (Calibre), and consists of these slides and any accompanying commentary. By reviewing / attending this presentation, you acknowledge the following statements / information in this disclaimer. FORWARD LOOKING STATEMENTS This presentation may contain forward looking statements that are subject to risk factors associated with the engineering services, mining, rail, construction, industrial technology, consulting, and asset management business. All statements other than the statements of historical facts included in this presentation, including, without limitation, those regarding Calibre s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Calibre s products and services and forecasts) are designated as forward looking statements. In addition to the categories of risk set out here, such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Calibre, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. PAST PERFORMANCE Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Nothing in this presentation should be interpreted to mean that future earnings per share of Calibre will necessarily match or exceed its historical published earnings per share. All references to dollars, cents, or $ in this presentation are to Australian currency, unless otherwise stated. References to Calibre, the Company, the Group or the Calibre Group may be references to Calibre Group Limited ACN , or its subsidiaries. While Calibre considers the assumptions on which these statements are based to be reasonable, whether circumstances actually occur in accordance with these statements may be affected by a variety of factors. These include, but are not limited to, levels of actual demand, currency fluctuations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risk, project delay or advancement, approvals and cost estimates. These could cause trends or results to differ from the forward looking statements in this presentation. NOT FINANCIAL PRODUCT ADVICE This presentation is for information purposes only and is not financial product or investment advice, nor a recommendation to acquire Calibre shares. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. P12

13 Financial Statements as presented in the Annual Financial Report and prepared in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations

14 Consolidated statement of profit or loss and other comprehensive income as presented in the Annual Financial Report COMMENTARY ($m) CONTINUING OPERATIONS Revenue Cost of providing services - - Gross profit Administration costs (6.5) (10.2) Occupancy costs (1.1) (0.5) Prepared in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations, the comparatives have been restated for discontinued operations that have arisen during the year (refer to Note 7 of the Annual Financial Report). The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes included in the Annual Financial Report. Depreciation and amortisation (1.6) (0.4) Finance costs (8.5) (5.9) Strategic sale and restructuring costs (4.3) (6.2) Loss before income tax (21.8) (23.0) Income tax benefit/(expense) (2.5) 7.5 Loss for the period from continuing operations (24.3) (15.5) Discontinued operations (Loss)/Profit from discontinued operations, after tax (38.6) 15.6 (Loss)/Profit for the period (62.9) 0.1 P14

15 Consolidated statement of financial position as presented in the Annual Financial Report ASSETS Current assets Cash and cash equivalents Trade and other receivables Current tax assets Assets held for sale Total current assets Non-current assets Property, plant and equipment Goodwill - - Other intangible assets Investments Deferred tax assets Total non-current assets Total Assets LIABILITIES Current liabilities Trade and other payables Borrowings Deferred acquisition consideration Provisions Liabilities directly associated with assets held for sale Total current liabilities Non-current liabilities Borrowings Provisions Total non-current liabilities Total Liabilities Net Assets EQUITY Issued capital Reserves Accumulated losses (135.8) (72.9) Total Equity COMMENTARY Prepared in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations, the comparatives have been restated for discontinued operations that have arisen during the year (refer to Note 7 of the Annual Financial Report). The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes included in the Annual Financial Report. ($m) P15

16 Consolidated statement of cash flows as presented in the Annual Financial Report CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) (690.1) (489.5) GST paid (24.7) (21.2) Income tax refund Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payment of deferred acquisition consideration (30.7) (16.5) Interest received Purchase of property, plant, equipment and software (5.0) (6.3) Proceeds from sale of property, plant, equipment and software COMMENTARY Net cash used in investing activities (35.1) (19.9) The consolidated statement of cash flows should be read in conjunction with the accompanying notes included in the Annual Financial Report. ($m) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares (net of share issue costs) Interest paid (8.3) (4.2) Proceeds from borrowings Repayment of borrowings (83.9) (14.7) Net cash generated from financing activities Net decrease in cash and cash equivalents 5.4 (5.4) Cash and cash equivalents at beginning of year Cash and cash equivalents at the end of the year P16