Smiths News PLC · LSE:SNWS
Smiths News — Connect Group — H1 2018 Earnings Presentation
14 slides from Smiths News's earnings presentation, May 1, 2018
Slide 1: Interim Results
Interim Results 1 May 2018
Slide 2: Headlines
Headlines Trading ► Revenue £766.5m -3.4% ► Adjusted PBT £15.1m -30.3% ► Adjusted EPS 5.0p -28.6% Capital management ► Free cash flow £10.0m 495.1% ► Net Debt £83.6m 44.2% ► DPS 3.1p 0.0% Operations ► Smiths News - resilient performance with benefit of World Cup in H2 ► DMD – good profit growth driv
Slide 3: Group Financial Update
Group Financial Update David Bauernfeind Chief Financial Officer
Slide 4: Group performance – continuing operations
Group performance – continuing operations £m Adjusted Feb 2018 Restated Change Feb 2017 % Early Distribution 18.2 20.7 -11.9% Tuffnells (0.2) 4.3 -105.8% Group operating profit 18.0 25.0 -28.0% Net finance charges (2.9) (3.3) 12.7% Group PBT 15.1 21.7 -30.3% Tax (3.0) (4.5) 33.3% Group PAT 12.1 17.2
Slide 5: Adjusting items – continuing operations
Adjusting items – continuing operations £m Feb 2018 Restated Feb 2017 Network and re-organisation costs (0.5) (1.4) Vacant property 0.5 - Acquisition and disposal costs - (0.9) Pension credit - 0.7 Impairment of non-current assets (2.0) - Amortisation of acquired intangibles (3.6) (3.6) Total before
Slide 6: Continuing free cash flow
Continuing free cash flow £m Feb 2018 Restated Feb 2017 Operating profit – adjusted 18.0 25.0 Depreciation and amortisation 6.2 5.5 EBITDA 24.2 30.5 Working capital 1.8 (9.4) Capital expenditure (4.4) (8.2) Finance lease payments (1.9) (2.2) Net interest and fees (3.5) (2.3) Taxation (3.4) (4.5) Adj
Slide 7: Net debt
Net debt £m Feb 2018 Restated Aug 2017 Feb 2017 Opening net debt (82.1) (141.7) (141.7) Free cash flow to equity 10.0 1.7 28.7 Pension deficit (2.5) (2.4) (4.8) Dividend paid (16.5) (15.9) (23.6) Disposal proceeds 13.7 - 58.2 Discontinued cash flow (9.0) 6.8 (1.1) Finance lease creditor & 2.8 1.6 2.
Slide 8: Business update
Business update Connect a
Slide 9: Smiths News and DMD
Smiths News ► Resilient performance ► Revenue in line with medium-term forecast Revenue £662.2m -4.2% ► Service levels remain strong Profit £20.4m -7.3% ► £5m sustainable efficiencies second half weighted ► Boost to sales in H2 from World Cup ► Well positioned for publisher contract renewals Revenue
Slide 10: Pass My Parcel
Pass My Parcel ► Volume growth driven by Amazon consumer returns ► Strong service KPIs proving last mile capability Total Volume ► Sub-scale operation driving costs 1.9m 389% Revenue ► Last mile contracts proving better fit to capability £3.4m 250% Loss Proposition re-engineering £3.5m -45.8% ► A su
Slide 11: Tuffnells
Tuffnells ► Revenue growth behind expectations in a tough market Revenue £87.3m 0.9% ► Quality of revenue impacting profitability Loss £0.2m -105.8 % ► Costs significantly challenged in the period ► Driver vacancies ► Service rectification ► Management attrition ► Actions in hand for H2 turnaround ►
Slide 12: Summary
Summary A challenging first half ► Continued resilience of Smiths News and DMD ► Tuffnells and Pass My Parcel driving Group under-performance ► Transformation savings progressing slower than planned ► Net debt of £83.6m, down £66.3m year on year ► Interim dividend 3.1p Second half priorities ► Revis
Slide 13: Discontinued operations & Adjusted items
Discontinued operations & Adjusted items £m Feb 2018 Restated Feb 2017 Adjusted profit before tax 1.6 3.3 Taxation (0.3) (0.7) Profit from discontinued operations 1.3 2.6 Adjusted items - discontinued Loss on disposal of subsidiaries (10.5) - Acquisition and disposal costs (0.2) (0.6) Amortisation o
Slide 14: Cautionary statement
Cautionary statement This document contains certain forward-looking statements with respect to Connect Group PLC’s financial condition, its results of operations and businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘seek