Costain Group PLC · LSE:COST
Costain — H1 2014 Earnings Presentation
23 slides from Costain's earnings presentation, Aug 21, 2014
Slide 1: Engineering Success: Interim Results Presentation
Engineering Success Interim Results Presentation 21 August 2014
Slide 2: Engineering Success
Engineering Success HIGHWAYS > A strong performance in the first half of the year > Strategically well positioned NUCLEAR PROCESS > Good pipeline of opportunities OIL & GAS > Accelerating the growth of the Company POWER RAIL WATER 1
Slide 3: Financial Review
Financial Review Tony Bickerstaff, Finance Director
Slide 4: A strong performance in the first half of the year
A strong performance in the first half of the year > Revenue1 up 14 % to £529.1 million (2013: £462.9 million) > Underlying operating profit2 up 5% to £11.2 million (2013: £10.7 million) > Adjusted profit before tax3 increased 8% to £9.1 million (2013: £8.4 million) > Adjusted basic earnings per sha
Slide 5: Track record of increasing earnings
Track record of increasing earnings Group underlying operating profit* £m 30 25 20 H2 16.7 H1 15 14.1 9.7 14.9 10 10.4 10.7 11.2 5 9.2 7.7 0 2010 2011 2012 2013 2014 *Underlying operating profit before Other items; amortisation of acquired intangible assets and employment related and other deferred
Slide 6: Segmental income statement
Segmental income statement 6 Months to 30 June 2014 6 Months to 30 June 2013 Full Year 2013 Underlying Underlying Underlying Operating Operating Operating Revenue1 Profit2 Revenue1 Profit2 Revenue1 Profit2 £m £m Margin £m £m Margin £m £m Margin Infrastructure 358.7 16.9 4.7% 262.8 14.4 5.5% 560.6 31
Slide 7: Strong cash position
Strong cash position June Full Year Net cash movements due 2014 June 2013 2013 to: £m £m £m > Continued transition to Net Cash at beginning of period 57.7 105.7 105.7 target cost, reimbursable, collaborative forms of Cash flow (used by)/from operating activities* 19.3 (33.3) (35.5) contract Cash flo
Slide 8: Balance sheet & banking facilities
Balance sheet & banking facilities 30th June 30th June 31 December 2014 2013 2013 £m £m £m Assets Non current assets 98.3 94.6 97.0 (excluding pension deficit deferred tax) Trade and other receivables 214.0 193.5 192.2 Cash 134.9 75.3 84.3 Current assets 348.9 268.8 276.5 Total assets 447.2 363.4 37
Slide 9: Pension
Pension > In the period, agreed full actuarial valuation as at 31 March 2013 and updated recovery plan > Contributions at £7m per annum plus a top-up for total contributions to match annual dividend payments > Increase in accounting net deficit due to reduction in discount rate used to calculate lia
Slide 10: Implementing new dividend policy
Implementing new dividend policy > As set out at the time of the capital raise, progressive dividend policy, targeting ongoing dividend cover of c. 2 x underlying earnings. > Interim dividend declared of 3.25 pence per share on the enlarged share capital base of the Group (2013: 3.75 pence per share
Slide 11: Group Strategy
Group Strategy Andrew Wyllie, Chief Executive
Slide 12: Engineering Tomorrow: Unique and well-positioned strategy
Engineering Tomorrow: Unique and well-positioned strategy Working with customers to meet essential national needs > Costain is the UK’s engineering solutions provider with a unique focus on the major Ensuring the customers meeting national needs in energy, lights stay on… water and transportation. >
Slide 13: Significant investment providing opportunities in targeted sectors
Significant investment providing opportunities in targeted sectors RAIL HIGHWAYS POWER Sector Priority area for the government to stimulate economic growth UK road networks are under significant pressure, with longer Securing the UK’s future energy needs while meeting carbon and to meet future deman
Slide 14: Focussed on requirements of major customers
Focussed on requirements of major customers Simple business model to deliver innovative integrated solutions > Unique focus on major customers Infrastructure Natural Resources > Customer aligned divisional structure > Central resource allocation to prioritise Over 90% repeat orders and optimise asse
Slide 15: Meeting customers' demands by delivering a range of integrated services
Meeting customers’ demands by delivering a range of integrated services Advisory and Concept Smart motorways Development Advising clients on asset enhancement Asset Optimisation and Specialist Design Support Managing Mobicloud to improve site efficiency Cutting the cost of carbon capture The refurbi
Slide 16: Strategy in action: Delivery of £4.5 billion rail electrification programme
Strategy in action: Delivery of £4.5 billion rail electrification programme Network Rail required by the Regulator to deliver £4.5 billion programme over next five years. > Long term successful relationship with Network Rail > ABC joint venture formed to deliver the integrated service requirements o
Slide 17: Strategy in action: Growth in Oil & Gas
Strategy in action: Growth in Oil & Gas > Further projects secured in upstream, midstream and downstream activities > Upstream consulting contract extension worth £12 million with Premier Oil for North Sea assets > £30 million integrated services contract for Freon Replacement project at Dimlington
Slide 18: Strategy in action: Driving innovation and technology
Strategy in action: Driving innovation and technology throughout our services MARIO TaKaDu Carbon Capture RECAP Absorber Column Design COamp Asset Management Platform Building Information Modelling Wireless Monitoring Geographical Information Nuclear waste management Plasma Waste Vitrification ESDAL
Slide 19: Record order book and increased visibility
Record order book and increased visibility > Forward order book up 10% to £3.2bn (June 2013: Total order book: £3.2 bn £2.9bn), 2014 (Jun ‘14) > Over £950m of work secured for 2014 vs over £850m for 2013 in Jun 2013 2013 (Jun ‘13) > Over 90% repeat orders, over 90% collaborative target cost based co
Slide 20: Summary
Summary > Strong first half performance > Unique and well-positioned strategy > Focussed on accelerating growth through delivering integrated services to major customers > On course to deliver a result for the year in line with the Board’s expectations 19
Slide 21: Appendix
Appendix
Slide 22: Other items and tax
Other items and tax Other Items > Amortisation of acquired intangible assets - H1 2014: £1.6m (H1 2013: £0.6m, FY 2013: £1.8m) > Amortised from date of acquisitions (ClerkMaxwell - April 2011, Promanex - August 2011, EPC Offshore - August 2013, Serco JV - January 2014) > Employment related and other
Slide 23: Engineering Success
Engineering Success Interim Results Presentation 21 August 2014