Smiths News Plc · LSE:SNWS
Smiths News — Connect Group — H1 2017 Earnings Presentation
15 slides from Smiths News's earnings presentation, Apr 25, 2017
Slide 1: Interim Results
Interim Results 25 April 2017
Slide 2: Highlights
Highlights Continuing Operations ► Total revenue £911.8m -0.6% ► Adjusted PBT £23.3m -4.8% ► Adjusted EPS 7.6p -5.3% ► Free cash flow £12.4m -31.2% ► DPS 3.1p +3.3% Highlights ► Proposed sale of Education & Care – strategic milestone to focus Group priorities ► Resilient performance of News & Media
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 2017 Feb 2016 Change % News & Media 20.7 20.9 -1.3% Parcel Freight 4.3 5.0 -13.9% Books 1.6 1.9 -13.5% Group operating profit 26.6 27.8 -4.4% Net finance charges (3.3) (3.3) 1.5% Group PBT 23.3 24.5 -4.8% Tax (4.8) (5.1) 6.6% Group PAT 18.5 1
Slide 5: Exceptional items – continuing operations
Exceptional items – continuing operations £m Feb 2017 Feb 2016 Network and re-organisation costs (1.4) (0.5) Acquisition and disposal costs (0.9) (1.8) Pension credit 0.7 - Amortisation of acquired intangibles (4.1) (4.4) Total before taxation (5.7) (6.7) Taxation 1.2 1.4 Total after taxation (4.5)
Slide 6: Group free cash flow
Group free cash flow £m Feb 2017 Feb 2016 Operating profit - statutory 28.3 30.6 Depreciation and amortisation 6.9 6.6 EBITDA 35.2 37.2 Working capital (4.1) (6.1) Capital expenditure (9.4) (5.7) Net interest and fees (2.3) (2.5) Taxation (5.3) (3.1) Pension funding (2.6) (2.6) Other 0.9 0.8 Free ca
Slide 7: Net debt
Net debt £m Feb 2017 Feb 2016 Aug 2016 Opening net debt (141.7) (153.4) (153.4) Free cash flow 12.4 18.0 49.6 Exceptional items (4.2) (6.9) (10.8) Dividend (15.9) (15.3) (22.7) Finance lease payments & (0.5) (3.3) (4.4) other Closing net debt (149.9) (160.9) (141.7) Net debt : EBITDA 1.8x 2.0x 1.7x
Slide 8: Business update
Business update Connect a
Slide 9: News Distribution
News Distribution 2017 H1 ► Resilient performance from our largest business Total Revenue ► Revenue remains in line with medium-term forecast £706.7m - 3.3% Total Adj. Op Profit £20.7m - 1.5% ► Newspapers performing more strongly than magazines News Revenue ► £10m sustainable efficiencies by FY2018
Slide 10: Pass My Parcel
Pass My Parcel ► Volume of 0.39m, up 44% - but taking longer to build ► Cost of investment set to reduce as volume grows ► New services launched since Christmas: ► Returns for Amazon and French Connection ► SEND – a ‘consumer to consumer’ service for marketplace sellers ► Developments for second hal
Slide 11: Parcel Freight
Parcel Freight 2017 H1 ► Strong demand maintained despite wider economic uncertainty Total Revenue £86.6m 5.1% and competitive environment Adj. Op Profit ► Net new customer growth of 220, up 5% in the period £4.3m -13.9% ► Investment to strengthen capability and support growth ► £1.5m investment in
Slide 12: Books
Books 2017 H1 ► Strong top line, growing market share Total Revenue ► Profit impacted by increased costs £118.5m +14.4% Adj. Op Profit ► Revenue growth from Wholesale with high demand over peak £1.6m -13.5% Segmental revenue ► Wordery continues to grow, with further expansion to USA Wholesale +18% W
Slide 13: Education & Care
Education & Care 2017 H1 ► Proposed sale approved by RM plc shareholders Total Revenue £28.7m -9.1% ► Completion now pending approval of CMA Adj. Op Profit ► Uncertainty over school budgets depressing spending £1.7m -38.8% Segmental revenue ► New contract serving schools in Northern Ireland Early Ye
Slide 14: Summary & outlook
Summary & outlook Summary ► Proposed sale of Education & Care a significant milestone ► Resilient financial performance in what have been competitive markets ► Investments to grow capability and create new opportunities maintained ► Dividend of 3.1p reflects confidence in the ongoing strength of the
Slide 15: 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