Mears Group Plc · LSE:MER
Mears — FY2016 Earnings Presentation
22 slides from Mears's earnings presentation, 2017
Slide 1: Preliminary results for the year ended 31 December 2016
Preliminary results for the year ended 31 December 2016 Mears Group PLC Preliminary results for the year ended 31 December 2016
Slide 2: Agenda
Preliminary results for the year ended 31 December 2016 Agenda →→ Highlights →→ Finance review →→ Operations and strategic review →→ Outlook Mears Group PLC Preliminary results for the year ended 31 December 2016 2
Slide 3: Highlights
Preliminary results for the year ended 31 December 2016 Highlights Group revenue Dividend per share Housing (84% of Group revenues) →→ Delivered strong organic revenue growth £940.1m +7% 11.70p +6% 2016 £940.1m 2016 11.70p →→ Record number of contract mobilisations, successful but some margin diluti
Slide 4: Finance review
Preliminary results for the year ended 31 December 2016 Finance review Andrew Smith Mears Group PLC Preliminary results for the year ended 31 December 2016 4
Slide 5: Income statement
Preliminary results for the year ended 31 December 2016 Income statement 2016 2015 Change £’000 £’000 % Sales revenue 940,100 881,139 +7% Cost of sales (695,206) (649,007) Gross profit 244,894 232,132 Administrative expenses (203,044) (193,470) Operating profit before the amortisation of acquisition
Slide 6: Earnings per share (EPS)
Preliminary results for the year ended 31 December 2016 Earnings per share (EPS) 2016 2015 Change % Diluted earnings per share (p)* 23.41 20.10 +16% Normalised diluted earnings per share (p)** 30.36 27.94 +9% Weighted average number of shares (m) 102.9 102.8 Dividend per share (p) 11.70 11.00 +6% *
Slide 7: Segmental analysis
Preliminary results for the year ended 31 December 2016 Segmental analysis 2016 2015 Housing Care Total Housing Care Total £’000 £’000 £’000 £’000 £’000 £’000 Revenue 787,530 152,570 940,100 735,129 146,010 881,139 Operating profit (loss) * 44,057 (1,199) 42,858 42,413 (1,601) 40,812 Operating margi
Slide 8: Housing analysis
Preliminary results for the year ended 31 December 2016 Revenue Housing analysis 2016 2015 £787.5m +7% £m £m 2016 £787.5m Maintenance 602.0 589.0 2015 £735.1m £714.7m Regeneration 86.0 98.4 2014 Housing Management 99.5 47.7 Operating profit* Total Housing revenues 787.5 735.1 £44.1m +4% 2016 £44.1m
Slide 9: Care analysis
Preliminary results for the year ended 31 December 2016 Revenue Care analysis Hours per week Annualised revenue £m Charge rate per hour £ £152.6m +5% 2016 £152.6m £146.0m As at 1 January 2016 2015 216,000 148.1 13.19 2014 £124.0m Contract closures* (48,200) Material new contract awards 9,100 Operati
Slide 10: Balance sheet
Preliminary results for the year ended 31 December 2016 Balance sheet 2016 2015 £m £m Goodwill and intangible assets 219.6 224.9 Property, plant and equipment 20.3 18.4 Inventories 11.2 9.0 Trade receivables 157.2 146.9 Trade payables (186.6) (188.5) Net (debt) / cash (12.4) 0.8 Deferred considerati
Slide 11: Pensions
Preliminary results for the year ended 31 December 2016 Pensions 2016 2015 Group Other Group Other Schemes Schemes Total Schemes Schemes Total £m £m £m £m £m £m Scheme assets 149.5 406.9 556.5 116.5 332.7 449.2 Scheme liabilities (137.7) (410.3) (548.0) (111.3) (333.8) (445.1) Net asset / (liability
Slide 12: Cash performance
Preliminary results for the year ended 31 December 2016 EBITDA to cash conversion Cash performance 2016 70% 2016 2015 £m £m 2015 99% Operating profit* 41.9 38.7 2014 96% Depreciation and amortisation 7.4 6.3 EBITDA 49.3 45.0 Average trade receivable days Cash inflow from operating activities 34.5 44
Slide 13: Cash performance £m
Preliminary results for the year ended 31 December 2016 Net debt 40 Operating cash flow Tax 30 30.6 (4.9) Financing Capital (3.3) expenditure 20 Cash performance £m 10 December (12.9) 2015 net cash Acquisitions 0 0.8 (10.2) -5 Dividend -10 (12.5) (12.4) -15 December 2016 net debt Mears Group PLC Pre
Slide 14: Guidance
Preliminary results for the year ended 31 December 2016 Guidance FY 2016 FY 2017 FY2018/20 Housing growth 7% 5% 5-10% Housing margin 5.6% 5.6-5.8% 5.7-5.9% Care growth 4% (12%)* >0% Care margin (0.8%) Return to profit 4.0-5.0% Cash conversion 70% 90% 90% *Including the full year impact of the care r
Slide 15: Operations and Strategic Review
Preliminary results for the year ended 31 December 2016 Operations and Strategic Review David Miles Mears Group PLC Preliminary results for the year ended 31 December 2016 15
Slide 16: Housing market development
Preliminary results for the year ended 31 December 2016 Housing market development Mears 2000 Mears 2010 Mears 2020 Traditional Evolving Maturing Best in class maintenance provider Best in class repairs partner Best in class housing operator n Construction orientated, repairs and maintenance n Servi
Slide 17: Broadening our service offering
Preliminary results for the year ended 31 December 2016 Broadening our service offering Funder Registered Providers ars e M M ea Finance rs Housing Maintenance Management rs M e ea ar M s Regulation Service Users Mears Group PLC Preliminary results for the year ended 31 December 2016 17
Slide 18: Milton Keynes case study
Preliminary results for the year ended 31 December 2016 Milton Keynes case study →→ Client : Milton Keynes Council / YourMK LLP ocureme nt • Call taking • Tenan t Lia •Pr ison ent •B m usi age ne →→ Start date : April 2016 rs man ss sy ste ai ep Estate Management m R →→ Contract value : £250 million
Slide 19: Care market development
Preliminary results for the year ended 31 December 2016 Care market development Segment Characteristics At December 2015 At December 2016 Mears’ Strategy →→ Market and bid outcomes-based 10% contracts Social Care →→ Flexible wages 20% →→ Low carer churn →→ Add service breadth and management and →→ S
Slide 20: Visibility of future growth
Preliminary results for the year ended 31 December 2016 Visibility of future growth →→ Order book £3.1 billion (2015: £3.5 billion) organic growth Sales rationalisation Secured care →→ 2017 - revenue visibility of 93% of consensus gap forecasts at turn of the year (94% as at today) Secured housing o
Slide 21: Outlook
Preliminary results for the year ended 31 December 2016 Outlook Significant growth opportunities in our core markets →→ Immediate opportunities in Housing →→ Encouraging long-term outlook in Care Housing (84% of Group revenues) →→ Continue to deliver growth in housing maintenance through service qua
Slide 22: Legal disclaimer
Preliminary results for the year ended 31 December 2016 Legal disclaimer No representation or warranty, expressed or implied, is made or given by or on behalf of Mears Group PLC ( “the Company” and, together with its subsidiaries and subsidiary undertakings, “the Group”) or any of its directors or a