Kelly Partners Group Holdings Ltd. · ASX:KPG
Kelly Partners — FY2019 Earnings Presentation
24 slides from Kelly Partners's earnings presentation, Aug 20, 2019
Slide 1: FY19 Results Presentation
KP+GH KELLY PARTNERS GROUP HOLDINGS LIMITED “Kelly Partners Group Holdings Limited (KPGH) FY19 Results Presentation ASX: KPG PRESENTED BY Brett Kelly, CEO and Executive Chairman Justin Sweeting, Deputy CFO Kenneth Ko, Group Finance Manager 20 August 2019 Kelly Partners Group Holdings Limited kellypa
Slide 2: KPG Strategy
KPG Strategy To build per-share intrinsic value Kelly Partners Group Holdings Limited hope to build per-share intrinsic value by: * Improving the earning power of our many subsidiaries; * Further increasing their earnings through tuck-in acquisitions; * Participating in the growth of our investees;
Slide 3: Result Highlights
tT Result Highlights * Revenue Growth (organic, ex sydney cap) OF 7.5% * Total Revenue growth (exsydneycap) 11.9% * ROE 32.0% and ROIC of 20.2% * Cash from Operations of $10.0m (up 51.0% on FY18) * Owners’ Earnings of $9.7m (up 53.4%) * Integration of four recently acquired accounting businesses in:
Slide 4: FY19 Financial Highlights
+ FY19 Financial Highlights Revenues and underlying EBITDA in line with guidance FY19 Financial Highlights Revenue from ordinary activities Underlying EBITDA Margin (%) Underlying NPATA Margin (%) Statutory NPAT Dividends Paid Earnings per share (cents)* Return on Equity Return on Invested Capital O
Slide 5: Operational Highlights
Operational Highlights Strong growth Organic Growth Network Expansion * Organic Revenue ¢exci sydneycap) UD = * )§=93 Tuck in acquisitions 75%, driven by both volume and * 1Marquee acquisition price growth. * $3.0-4.0m expected full year revenue contribution in FY20 * $25m revenue YTD (+6.4% revenue
Slide 6: Business Overview
+ Business Overview Using an owner-driver model, the Company acquires a majority interest (>50%) in the Operating Businesses to drive long-term strategic alignment, and help solve the succession dilemma. KP+G KELLY PARTNERS GROUP HOLDINGS LIMITED
Slide 7: Kelly+Partners Key Statistics
+ Kelly+Partners Key Statistics 13 years to date of strong and growing NSW presence IS LOCATIONS 40 EQUITY PARTNERS 22 BUSINESSES 229 TOTAL TEAM 45 AVERAGE AGE OF OPERATING BUSINESS OWNERS 20 ACQUISITIONS COMPLETED SINCE INCEPTION @ Hong Kong 4Ccentral Coast @ © Central Tablelands, Norwest@ e Meccoa
Slide 8: Revenue
+ Revenue $45 $39.5 $40.0 $40 $35 $30.2 $30 $25 $m $21.1 $20.3 $20 $17.2 $15 $13.0 $10 $8.4 $7.9 $7.8 $6.3 $5 $3.2 $1.2 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 9: Equity Distributions and Management Services Fees
1. Equity Distributions Distributions from >50% shareholding from each underlying Operating Business, paid pretax month. 2. Management Services Fees Fixed percentage fee based on revenue paid monthly by the Operating Businesses for the Company's centralised management and back-office services. KP+GH
Slide 10: Financials
+ . . Financials K+P has a high margin, but capital light business model with a recurring, defensive revenue stream. KP+G - KELLY PARTNERS GROUP HOLDINGS LIMITED
Slide 11: FY19 Income Statement
FY19 Income Statement Fhrevenues in line with guidance, driven by increased organic and acquired billings Income Statement Summary ($m) * Revenue from ordinary activities grew Revenue $40.0 $395 13% to $40.0m (+$0.5m, up 1.3%), driven by Commissions & Other Income $01 $0.2 52 acquisitions, contribut
Slide 12: FY19 Revenue
FY19 Revenue + Increased revenue contributions from growth businesses Revenue No. of bu: % of Total No. of busine: % of Tota Established >$2m 5 $263 658 5 $289 73.2 crowth $1m to $2m 7 $112 219 5 $7.6 19.4 Startups. <$im 2 $0.3 Oe 4 $15 37 Other Services 7 $23 5.7% 7 $15 37 [Total 21 $40.0 100.0% 21
Slide 13: FY19 Cashflow
FY19 Cashflow + Strong cash conversion underpinning good earnings quality Strong Cash from Operations (CFO) driven by billings growth and lock up reduction. Strong Cash Conversion of 98% (CFO to EBITDA). Good earnings quality. Disciplined debt reduction on acquisitions facilities. Growth capex inclu
Slide 14: FY19 Balance Sheet
FY19 Balance Sheet Keonservatively geared balance sheet * Total Asset growth to $49.5m (+$5.0m) driven by acquisitions. Conservative capital structure with 49.8% Equity / Total Assets ratio, and Net Debt / EBITDA of 14x * Lock up reduced to $7.6m (-$2.5m). Lock up days reduced to 69.6 from 93.2 days
Slide 15: FY19 Dividends
FY19 Dividends tconsistent quarterly dividends with payout increased to 1.1c per share Payment date Total fully Amount per Fully Franked franked security amount per dividends paid Cents security Cents For the year ended 30 June 2018 Final dividend 12 Jul 2018 $454,972 1.00 1.00 For the year ended 30
Slide 16: Outlook and Future Growth
TF Outlook and Future Growth _P+GH
Slide 17: Growth Strategy
5 +, Year Growth Strategy ree pronged growth strategy GANIC NETWORK EXPANSION ORGANIC [ACQUISITION] ACQUISITION — GROWTH TUCK-IN MARQUEE Bh eworeo| KP+GH KELLY PARTNERS GROUP HOLDINGS LIMITED NEW TARGET SERVICES J GROUP Wealth Finance Corpe y Investment Office Self Funded / Overdraft $5m+ Revenue Op
Slide 18: Blue Mountains
Blue Mountains + KP+GH
Slide 19: Appendix
FA npendix _P+GH
Slide 20: NPAT to Operating Cashflow Reconciliation
+ NPAT to Operating Cashflow Reconci ‘conciliati NPAT to O Reported NPAT 71 10.0 [Adjustments for: Depreciation and amortisation 12 1.0 Shares issued to employees - 02 Change in fair value of contingent consideration (0.2) (1.2) Net fair value (gain)/loss on other financial assets 0.0 - Unwinding of
Slide 21: Reported NPATA to Underlying NPATA Reconciliation
Reported NPATA to Underlying NPATA Reconciliation Reported attributed NPAT 24 44 INon-recurring items: Add: Acquisition costs 02 - Restructuring costs 03 04 Shares issued to employees under ESS - 02 Final costs relating to IPO - Ol Other 02 Ol Less: Change in fair value of contingent consideration -
Slide 22: Definitions
+ Definitions EBIT = Earnings Before Interest And Tax EBITDA = EBIT before Depreciation and Amortisation EPS = Earnings per Share EPSA = Earnings per Share before Amortisation NPAT = Net Profit After Tax NPATA = Net Profit After Tax and before Amortisation of Customer Relationship Intangibles OWNER
Slide 23: Disclaimer
4Disclaimer SUMMARY INFORMATION This document has been prepared by Kelly Partners Group Holdings Limited ACN 124 908 363 (Company). This document contains information in a summary form and general background information about the Company's activities current as at the date of the document. It is to
Slide 24: Thank you
KP+GH KELLY PARTNERS GROUP HOLDINGS LIMITED “Thank you August 2019 Kelly+Partners Group Holdings Limited kellypartnersgroup.com.au
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