Mears Group Plc · LSE:MER
Mears — H1 2014 Earnings Presentation
16 slides from Mears's earnings presentation, August 2014
Slide 1: Innovation, leadership and partnership
Investor presentation - Interim results for the period to 30 June 2014 Innovation, leadership and partnership
Slide 2: Mears at a glance
Mears at a glance 2 Five year record Social Housing We repair and maintain over 700,000 of the 5 million Social Homes in the UK. We provide rapid response and planned maintenance services £898.2m £38.4m to Local Authorities and Registered Social Landlords. 2013 annual revenue Employee numbers Office
Slide 3: Agenda
Agenda 3 ■ Highlights ■ Financial review ■ Social Housing market development ■ Care market development ■ Order book and pipeline ■ Strategy and outlook
Slide 4: Financial highlights
Financial highlights 4 2014 2013 Change Total Group revenue – continuing operations £428.1m £439.1m -3% Profit for the period before tax from continuing operations* £18.7m £16.9m +11% Profit for the period before tax* £18.7m £15.5m +21% Normalised diluted EPS* 14.34p 12.23p +17% Interim dividend per
Slide 5: Operational and strategic highlights
Operational and strategic highlights 5 ■ Strategy focused on two growth sectors ■ Differentiated service delivery continues to drive organic growth ■ Outlook is positive and we are well placed for continued growth ■ Further investment in Mears Nurseplus infrastructure, driving organic growth ■ Emerg
Slide 6: Income Statement
Income Statement 6 Six months to June 2014 (£m) 2013 (£m) Revenue 428.1 439.1 -3% Operating profit 19.2 17.8 +8% Net finance expense (0.5) (0.9) Normalised profit before tax* 18.7 16.9 +11% Exceptional costs - (6.5) Amortisation (4.7) (5.0) Profit before tax 14.0 5.4 Average diluted number of shares
Slide 7: Social Housing
Social Housing 7 Six months to June 2014 2013 ■ Underlying organic growth of 3% Revenue £364.9m £378.6m Operating profit * £15.3m £13.9m ■ Positive margin impact from fewer Operating margin 4.2% 3.7% new contract mobilisations * pre amortisation and share based payments 21.61p ■ Strong margin progre
Slide 8: Care
Care 8 Six months to June 2014 2013 Revenue £63.2m £60.5m Operating profit * £4.9m £4.9m ■+24% Revenue growth of 5% Operating margin 7.8% 8.1% ■ Continued investment in developing * pre amortisation and share based payments Mears Nurseplus higher acuity model Revenue (£m) Operating Profit (£m)* ■ Su
Slide 9: Cash performance
Cash performance 9 12 months rolling to June 2014 (£m) 2013 (£m) Operating profit from continuing activities 42.4 25.9 Operating loss from discontinued activities (1.2) (2.7) Depreciation 6.4 5.5 EBITDA - all activities 47.6 28.7 EBITDA - continuing activities 48.7 31.1 Cash inflow from operating ac
Slide 10: Consolidated Balance Sheet
Consolidated Balance Sheet 10 At June 2014 (£m) 2013 (£m) - adjusted Goodwill and acquisition intangibles 187.4 179.2 Intangible assets (non-acquisition) 3.3 2.8 ??? Property, plant and equipment 14.8 14.8 - Working capital - trade receivables 171.7 181.1 - trade payables (192.7) (188.2) Net funds (
Slide 11: Social Housing market development
Social Housing market development 11 ■ Mears recognised as differentiated market leader with sector leading service delivery excellence ■ Strong long-term drivers ■ Demand for Social Housing exceeds supply ■ Housing Revenue Account reform and rental increases ■ Customer consolidation ■ Budget surplu
Slide 12: Housing Management
Housing Management 12 Change Drivers Housing Management Market Mears' Strategy ment • Call taking • Tenan • Procure t Liai ement son •B anag usin ess rs m i sys pa Welfare Reform Re Estate Management te ■ Preferred partner with ms • •R existing customers ion ent dat Col mmo Outso lecti Financial Inc
Slide 13: Care market in transition
Care market in transition 13 ■ In excess of 10% increase in Domiciliary care spending ■ £72k spending cap per individual from 2015 ■ Greater NHS/Social Care integration ■ More complex services being delivered outside of hospitals Market opportunity £ ■ Market flat with pressures on price ■ New commi
Slide 14: Complex care - business progress
Complex care - business progress 14 ■ Current run-rate of 3,750 hours per week (50 packages), a 34% increase over last twelve months ■ Strong Nurseplus pipeline of emerging opportunities in England, Scotland and Northern Ireland (12 packages) ■ Significant enhancement to operational structure; appoi
Slide 15: Order book and pipeline
Order book and pipeline 15 Group Order Book - £3.7 billion £m ■ Social Housing ■ Win rate improved to 35% ■ New contract opportunities suffering temporarily from quiet period of new bidding; we continue to be highly selective ■ Care 95% 1,050 ■ Strong win rate in the visibility period - 63% (2013: 1
Slide 16: Strategy and outlook
Strategy and outlook 16 ■ Social Housing (85% of Group revenues) ■ Non-discretionary, HRA funded revenue streams together with the changes to Housing finance provide a real opportunity rather than simple austerity ■ Continue to deliver solid organic growth in Social Housing through providing 'more o