Preliminary Results Presentation Year to 30 th June 2006
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Transcript of Preliminary Results Presentation Year to 30 th June 2006
Preliminary Results Presentation – September 2006
Preliminary Results Presentation
Year to 30th June 2006
Preliminary Results Presentation – September 2006
This presentation is being made only to and is directed at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (b) any other persons to who it may otherwise lawfully be communicated, falling within Article 49(2) of the Order (all such persons being referred to as “relevant persons”).
Any person who is not a relevant person should not act or rely on this presentation or any of its comments.
The financial information set out in this document does not constitute the Company’s statutory accounts. Statutory accounts for 2005, which received an auditors’ report that was unqualified and did not contain any statement concerning accounting records or failure to obtain necessary information and explanations, have been filed with the Registrar of Companies.
Disclaimer
Preliminary Results Presentation – September 2006
Agenda
• Overview & Acquisitions Greg Fitzgerald
• Financial Review Frank Nelson
• Building Andy Sturgess
• Infrastructure Ken Gillespie
• Investments Frank Nelson
• Housebuilding Greg Fitzgerald
• Summary & Outlook Greg Fitzgerald
Preliminary Results Presentation – September 2006
Overview & AcquisitionsGreg Fitzgerald – Chief Executive
Preliminary Results Presentation – September 2006
Overview & Acquisitions
• Record profits & cash levels
• Successful acquisition and integration of Chartdale & Morrison
• Industry leading Health, Safety and Environmental performance
• Building – full UK coverage
• Infrastructure – increased expertise & sector coverage
• Housebuilding – record completions & land bank
• Excellent platform for further growth
Key Highlights
Preliminary Results Presentation – September 2006
Overview & Acquisitions
New Structure
Preliminary Results Presentation – September 2006
Overview & Acquisitions
• Chartdale Homes - February
• Morrison Construction - March
• Successful integration
• Greater synergy savings
• Year end profit targets achieved
• Significant opportunities being generated
Update
Preliminary Results Presentation – September 2006
Financial OverviewFrank Nelson – Finance Director
Preliminary Results Presentation – September 2006
Financial Overview
• Group revenue £851m up 19%
• Profit before tax
• Pre exceptional £32.5m up 19%
• Post exceptional £34.5m up 26%
• Earnings per share
• Pre exceptional 9.7p up 13%*
• Post exceptional 10.8p up 26%
• Dividend 2.5p up 19%
• Net cash £16m – strong construction performance
• Profit from operations (excl acquisition) up by 14%
• Return on average shareholders’ funds of 48%
• Tax charge reduced to 26%
Highlights
* Tax credit allocated to exceptional profit
Preliminary Results Presentation – September 2006
Profit and Loss (including Joint Ventures)
Financial Overview
2006 2005
£’m £’m
Revenue 854.1 726.2
Profit from operations 38.2 31.3
JV interest and tax (0.2) (0.3)
Profit before finance costs, amortisation and exceptionals
38.0 31.0
Intangibles amortisation (0.5) -
Profit before exceptionals 37.5 31.0
Exceptional items
- profit on sale and leaseback 3.9 -
- restructuring costs (1.9) -
Profit before finance costs 39.5 31.0
Net finance costs (5.0) (3.6)
Profit before tax 34.5 27.4
Preliminary Results Presentation – September 2006
Segmental Analysis to 30th June 2006 (including Joint Ventures)
Revenue £’m
Profit / (Loss)£’m
2006 2005 2006 2005
Construction 628.8 537.7 13.2 9.1
PPP Investments 0.9 - (1.6) (1.2)
Housebuilding 223.8 188.0 32.0 27.9
Group 0.6 0.5 (5.4) (4.5)
854.1 726.2 38.2* 31.3*
Intangibles amortisation (0.5) -
Exceptional items 2.0 -
Less JV interest and tax (0.2) (0.3)
Net interest payable (5.0) (3.6)
Profit before tax 34.5 27.4
Financial Overview
* Profit from operations
Preliminary Results Presentation – September 2006
Net Interest payable
Financial Overview
2006 2005
£’000 £’000
Interest Payable
- On bank borrowings 2.3 2.2
- On unwinding of discount on creditors
2.4 1.3
- Net return on asset of pension fund 0.7 0.8
- Other 0.2 0.1
5.6 4.4
Interest Receivable (0.6) (0.8)
Net Interest 5.0 3.6
Preliminary Results Presentation – September 2006
Balance Sheet Highlights
Financial Overview
2006 2005
Shareholders’ funds (£’m) 120.1* 53.7*
Net cash / (debt) (£’m) 16.0 (12.4)
Gearing N/A 23%
Interest cover – total (IFRS) 8 x 8 x
- bank 17 x 14 x
Land (£’m) 208.5 140.8
Work in progress (£’m) 74.1 64.1
Land Creditors (£’m) (56.6) (47.6)
Deferred payment – Chartdale (£’m) (36.5) -
* Includes £33m net pension deficit (2005: £32.2m)
Preliminary Results Presentation – September 2006
2006£’m
2005£’m
Operating cash flow 18.2 15.6
Interest, tax and dividends (19.8) (15.6)
Net proceeds from issue of shares 48.8 0.2
Acquisitions (net of cash acquired)* (24.9) -
Proceeds from sale and leaseback 11.2 -
Capital expenditure and investments (1.9) (3.8)
Other (3.2) 3.5
Net cash flow 28.4 (0.1)
Opening net debt (12.4) (12.3)
Closing net cash/(debt) 16.0 (12.4)
Cash Flow Summary
Financial Overview
* Morrison acquired on a normalised working capital basis. Cash on acquisition £30.2m unwinding post acquisition.
Preliminary Results Presentation – September 2006
Turnover £’m
Operating Profit *£’m
Pentland 2.1 0.1
Chartdale 9.8 1.5
Morrison 90.8 1.0
102.7 2.6
Morrison Fair ValuePre acquisition
£’mFair value
£’m
Intangibles - 2.8
Fixed Assets 1.2 0.8
Debtors 83.4 81.8
Cash 30.2 30.2
Trade Creditors (130.5) (132.5)
Net Assets Acquired (15.7) (16.9)
Goodwill - 56.6
Consideration - 39.7
Acquisitions
Financial Overview
Note: Goodwill payment on Pentland £0.6m, Chartdale nil * Before interest and amortisation
Preliminary Results Presentation – September 2006
BuildingAndy Sturgess – Managing Director
Preliminary Results Presentation – September 2006
Building
• New structure working well
• National coverage
• Market remains strong in key sectors
• Development opportunities in Affordable Housing
• Maintained strong order book
Key Highlights
Preliminary Results Presentation – September 2006
Building
Education
• Acknowledged as educational specialist
• PFI Schemes
– Caludon Castle, Coventry, Phase 2
– Northampton, 41 schools
– Highlands, 11 schools
• Three City Academies underway
• Opportunities through traditional procurement
Hampton Vale School, Peterborough
Preliminary Results Presentation – September 2006
Building
Commercial
• Market is in recovery
• Early involvement
• Design management key
• Value driven clients
• Repeat business
George Street, London
Preliminary Results Presentation – September 2006
• Significant opportunities - English Partnerships
• High levels of expertise
• Increase in Mixed Tenure Development
• Partnering Framework agreements with 21 Affordable Housing Providers
• Substantial growth potential
Leytonstone High Road, London E15
Building
Affordable Housing & Regeneration
Preliminary Results Presentation – September 2006
Building
Forward Order Book
Forward Order Book £’m
Sector Total NPC*
Health 173.8 173.5
Education 363.9 320.4
Prisons 187.7 187.7
Commercial 163.6 135.9
Interiors 32.1 32.0
Affordable Housing 126.7 100.2
Other 88.6 73.6
1,136.4 1,023.3
* Secured on Non Price Competitive Basis
Preliminary Results Presentation – September 2006
Building
• Expansion set to continue
• Sector focus still applies
• Strength & quality of order book
• Performance underpinned by cash
• Potential for further profit growth
Summary & Outlook
Preliminary Results Presentation – September 2006
InfrastructureKen Gillespie – Managing Director
Preliminary Results Presentation – September 2006
Infrastructure
• Order Book at record levels
• Excellent contract wins in chosen sectors
• Long-term frameworks success
• Strong customer satisfaction
• Delivering upper quartile returns
Key Highlights
Preliminary Results Presentation – September 2006
Infrastructure
Water
• Leading contractor in the Water Sector
• Frameworks held with most of the regulated mainland UK water companies
• Secured further frameworks with Scottish Water and Anglian Water
• Top KPI performance
Gorad Pumping Station, Holyhead
Preliminary Results Presentation – September 2006
Infrastructure
Highways and Rail
• Highways
• Long tradition and substantial capability
• Roads output will continue to grow
• Developing opportunities in both new capital schemes and maintenance
• Rail
• Business continues to grow
• Extended frameworks with Network Rail
• Opportunities through traditional procurement
A80 Auckenkilns, Scotland
Preliminary Results Presentation – September 2006
Infrastructure
Renewable Energy & Remediation
• Renewable Energy
• Good reputation and track record
• Key clients include Scottish Power
• A number of opportunities with a major award anticipated in the next 6 months
• Remediation
• Over 180 sites remediated
• Business synergies
• Appointed framework contractor for Olympic Park
Coldham Wind Farm
Preliminary Results Presentation – September 2006
Infrastructure
Forward Order Book
Forward Order Book £’m
Sectors Total NPC*
Water 702.1 673.9
Highways 269.6 227.1
Flood Alleviation 78.9 78.0
Rail 52.6 49.9
Waterways 29.9 29.5
Remediation 8.8 8.8
Communications 4.5 0.0
Renewable Energy 2.0 0.2
Ground Engineering 2.7 0.0
1,151.1 1,067.4
* Secured on Non Price Competitive Basis
Preliminary Results Presentation – September 2006
Infrastructure
• Continue to build on our significant presence in key sectors
• Substantial forward order book with over 90% in frameworks with key clients
• Strong expertise and management capability
• Buoyant markets with excellent growth prospects
Summary & Outlook
Preliminary Results Presentation – September 2006
InvestmentsFrank Nelson – Finance Director
Preliminary Results Presentation – September 2006
Investments
• Market position in Education, MOD Housing & LIFT
• Financial close of three projects - £351m
• Northampton Schools PFI
• DHE Portsmouth
• Highland Schools PFI
• Preferred bidder South East Essex LIFT - £100m
Overview
Vale Drive, North London LIFT
Preliminary Results Presentation – September 2006
Investments
Future Prospects
• LIFT – future tranches on existing schemes
• ITN Stage
• South East Midlands LIFT
• St Andrews Community Hospital
• Building Schools for the Future programme
• Scotland - Education PFI’s & HUB
Preliminary Results Presentation – September 2006
HousebuildingGreg Fitzgerald – Chief Executive
Preliminary Results Presentation – September 2006
Housing Highlights
Housebuilding
• Record Year
• Profits
• Carry forward position
• Land bank
• Acquisition of Chartdale
• Strong customer satisfaction levels maintained
• Planning permissions secured for current year
• National Awards
• Stable market conditions Gunwharf, Plymouth – CABE Award Winner
Preliminary Results Presentation – September 2006
Housebuilding
Key Statistics (including Joint Ventures)
12 months to June 2006
2006 2005 Increase %
Units 1,054 853 23.6
Average Selling Price £’000 212 208 1.9
Income per Sq. Ft £ 226 222 1.8
Turnover £m 224 188 19.1
Operating Profit £m 32.0 27.9 14.7
Margin % 14.3 14.8 (3.4)
ROCE % 20.8 22.3 (6.7)
Sales in hand August 06 £m 122.0 100.4 21.5
Land bank August 06 units 4,115 2,605 58.0
Strategic land August 06 acres 625 695 (10.1)
Preliminary Results Presentation – September 2006
Market Conditions and Focus
• Incentive levels reduced
• Competitive land market
• Modest house price inflation
• Cost base reduction
• Planning process remains challenging
• Reduction in exposure to apartments
• Differentiation through design and complexity of development
• Regeneration & Affordable Housing opportunities
Housebuilding
Denovo, Country Gate, New Barnet
Preliminary Results Presentation – September 2006
Housebuilding
Regional Businesses
• Coverage across South & East of England
• Strong regional brands
• Brownfield and conversion 75%
• Land bank
• Houses 78%
• Apartments 22%
• Customer satisfaction 91%
• Potential in Scotland Fairfield Park, Letchworth
Preliminary Results Presentation – September 2006
Housebuilding
Chartdale Acquisition
• Business exceeding expectations
• Land bank of 1350 units
• Delivering synergies
• Critical mass in Eastern Counties
• Scope for growth
Hurds Farm, Worlaby
Preliminary Results Presentation – September 2006
Housebuilding
Summary & Outlook
• All business units performing well
• Improved sales mix
• Market conditions improved
• Successful business model
• Confident of further expansion
Preliminary Results Presentation – September 2006
Summary and OutlookGreg Fitzgerald – Chief Executive
Preliminary Results Presentation – September 2006
• Very strong financial position
• Complete Integration Plan
• All divisions performing
• Industry leading Health, Safety and Environmental performance
• Maximise business synergies
• Major focus on Regeneration and Affordable Housing
• Confidence in growth plan
Summary and Outlook
Platform for Growth
Preliminary Results Presentation – September 2006
Preliminary Results Presentation
Year to 30th June 2006