Slide 1: 2016 Half Year Results
2016 Half Year Results Presented by Charles Skinner, Chief Executive Adam Councell, Group Finance Director September 2016
Slide 2: Highlights
Highlights Group revenue up 26% to £55.4m (H1 2015: £43.9m) Document Management revenue up 34% Relocation revenue up 12% Group adjusted profit before tax up 35% to £9.6m (H1 2015: £7.1m) Document Management adjusted operating profit up 31% Relocation adjusted operating profit up 42% Ad
Slide 3: Financial Review
Financial Review
Slide 4: Consolidated Income Statement (adjusted)
Consolidated Income Statement (adjusted) Revenue (£m) H1 2016 H1 2015 Change Revenue (£m) 55.4 43.9 +26% Adjusted operating profit (£m) * 10.5 7.7 +36% Finance costs (£m) (0.9) (0.6) +50% Adjusted PBT (£m) * 9.6 7.1 +35% Standard tax charge 20% 20.5% Adjusted profit for period (£m) * 7.7 5.6 +38% Av
Slide 5: Document Management
Document Management Revenue (£m) H1 2016 H1 2015 Change Revenue (£m) 37.2 27.7 34% Operating profit (£m) 9.7 7.4 31% Operating margin 26.1% 26.7% (60bps) Revenue (£m) Revenue increase largely driven by 2015 acquisitions, most notably Operating profit (£m) WRM Operating margin movement driven by:
Slide 6: Relocation
Relocation Revenue (£m) H1 2016 H1 2015 Change Revenue (£m) 18.2 16.2 12% Operating profit (£m) 1.7 1.2 42% Operating margin 9.3% 7.4% 190bps Harrow Green performed well despite strong prior year comparator. Operating profit (£m) Margins increased by 220bps on H1 2015 Relocom slightly weaker yea
Slide 7: Exceptional Costs
Exceptional Costs H1 2016 £m H1 2016 £m Restructuring costs 2.8 WRM 2.2 Transaction costs 0.2 Crimson 0.1 Box relocation and associated costs 0.1 DIAC 0.2 Other exceptional costs 1.8 Others 0.3 Total exceptional costs 4.9 Total restructuring 2.8 Restructuring cost driven by WRM acquisition Other
Slide 8: Cash Flow
Cash Flow H1 2016 £m H1 2015 £m Adjusted EBITDA 12.3 9.0 Exceptional costs (4.9) (2.9) Adjusted EBITDA after exceptionals 7.4 6.1 Working capital (1.4) (1.5) Net cash from operations 6.0 4.6 Capex (1.9) (2.5) Interest/Tax (1.9) (0.8) Acquisitions (0.7) (0.7) Disposal proceeds 29.8 0.0 Other 0.0 (0.1
Slide 9: Balance Sheet and Debt Facilities
Balance Sheet and Debt Facilities H1 2016 H1 2015 £m £m Non-current assets 156.8 106.7 Trade and other current assets 34.0 30.4 Cash and cash equivalents 20.4 12.3 Current Assets 54.4 42.7 Trade and other current liabilities (29.5) (23.0) Financial liabilities – borrowings (5.7) (2.9) Current liabil
Slide 10: Financial Summary
Financial Summary Revenue up 26% driven by 2015 acquisitions Operating margins improved Head office costs unchanged at £0.9m Group operating margins remain robust Net debt reduced sharply since YE 2014 driven by WRM Ireland sale Leverage reduced to 1.2x adjusted EBITDA but increased to c
Slide 11: Operational Review
Operational Review
Slide 12: Our Businesses
Our Businesses #2* #1* The majority of Records Management’s sales are from Harrow Green is the market leader in UK commercial the storage and retrieval of hard copy documents, relocations – the physical movement of office furniture and typically stored in cardboard boxes. It manages millions other p
Slide 13: Operational Review – Records Management
Operational Review – Records Management Performance slightly ahead of budget Operating margins broadly maintained despite inclusion of lower margin WRM Steady net box growth in core business Limited net box growth in ex-Cintas business Decline in net boxes at WRM, as expected on acquisitio
Slide 14: Operational Review - Shred
Operational Review - Shred Revenues broadly flat Small operating loss Acquisition of PHS Datashred, into which Restore Shred will be integrated, is transformational The combined business is number 2 in UK shredding market Significant scope for further consolidation of UK market 2016 Half Y
Slide 15: Operational Review - Scan
Operational Review - Scan Performance on budget Successful delivery of major seasonal contract NDA contract started well NHS contracts progressing Significant investment in management and facilities Scope for consolidation 2016 Half Year Results 14
Slide 16: Operational Review - Relocation
Operational Review - Relocation Performance in line with budget Operating margins in Harrow Green increasing to above long-term target Strong H2 order book in Harrow Green Relocom slightly weaker Restore IT Efficient performance steadily improving ITP Group impacted by weak global cartri
Slide 17: WRM Integration Update
WRM Integration Update Significant savings on duplicated management costs achieved Operational synergies exceeding expectations Rainham now fully racked and capacity levels overall rapidly increasing including Charlton transfer Bristol scheduled for closure in early 2017 Integration procee
Slide 18: Acquisition of PHS Data Solutions
Acquisition of PHS Data Solutions Acquired in August 2016 for a total consideration of £83.2 million, on a cash and debt free basis Anticipated synergies of £2.5m are expected from: duplicated management teams operational synergies from direct staff, vehicles and drivers Non-recurring cent
Slide 19: Business Stream Overview
Business Stream Overview Records Management UK no. 2 in increasingly consolidated market consistent high operating margins strong earnings visibility Shred established national operator, UK no. 2, with significant scope for growth by acquisition as well as organic Scan major UK opera
Slide 20: Summary and Outlook
Summary and Outlook Strong year-on-year performance Effective integration of earnings-enhancing acquisitions Four very well-positioned business streams Records management: scope to increase margins through improved capacity utilisation Shredding: Datashred transforms market position and pr