Shine Justice Ltd. · ASX:SHJ
Shine Justice — Shine Corporate — Investor Presentation (October 2015)
26 slides from Shine Justice's investor presentation, Oct 30, 2015
Slide 1: Shine Corporate Ltd Investor Presentation
For personal use only SHINE CORPORATE LTD Investor Presentation 30 October 2015 Simon Morrison – Managing Director Daniel Wilkie – Chief Financial Officer Courtney Petersen – Chief Executive Officer
Slide 2: Outline
For personal use only Outline • History • What business are we in? • EPA Strategy • Key Highlights • Revenue diversification • Overview of case selection and management process • Operating Performance by Area • Transformation update • Acquisition update • Regulatory update • Director information and
Slide 3: History
For personal use only HISTORY 1976 Founded as “KG & Shine & Co” in Toowoomba by Kerry Shine 1981 Stephen Roche commenced as an Articled Clerk 1988 Stephen Roche appointed as Partner, firm becomes “Shine Roche” Simon Morrison commenced as an Articled Clerk 1994 Brisbane office established 1995 Simon
Slide 4: What business are we in
For personal use only What business are we in • Plaintiff damages based litigation • A wrong, a remedy, a pot of money usually an insurance policy and a process to access funds for the benefit of our client. • Personal Injury (PI) - 78% of income o Workers compensation o Motor Vehicle Accident o Pub
Slide 5: Emerging Practices Strategy
For personal use only Emerging Practices Strategy Diversification • Reduce exposure to impact from legislative change • Income streams with different characteristics and benefits Growth in profitable areas of practice • Higher profit margins • No single dominant player • Growing a national practice
Slide 6: Key Highlights FY15
For personal use only KEY HIGHLIGHTS FY15 Strategy • Continued focus on growth in plaintiff-based litigation • Continued diversification of geographic spread of core PI business and enhancement of capability across emerging practice areas • Measured approach to acquisitions – consistent with strateg
Slide 7: Revenue Diversification
REVENUE DIVERSIFICATION For personal use only Emerging practice areas have increased to 22% of total group revenue while the group now derives over half its revenue from outside its core QLD PI base. 7
Slide 8: Overview of Case Selection & Management Process
For personal use only OVERVIEW OF CASE SELECTION & MANAGEMENT PROCESS Shine Declined Shine Declined Shine Collect Book Client Decline Practice INTERVIEW Info. Appt. Declined Area Case Awaiting Accept REVIEW Further Client & Open PANEL Invest. CALL Plan Declined CENTRE ASSESS RUN Accept PROCESS Non P
Slide 9: Operating Performance by Area
For personal use only OPERATING PERFORMANCE BY AREA Personal Injury Emerging Practice Areas Revenue $116.4M Revenue $33.7M EBITDA $32.7M EBITDA $11.2M EBITDA Margin 28.1% EBITDA Margin 33.2% • Strong performance for the year • Strong performance whilst continuing to deliver on • Three ne
Slide 10: Transformation Update
For personal use only TRANSFORMATION UPDATE • Transformation in full swing o Focus on accountability and “back to basics” o Finance Function - May 2016. Restructure of processes, implementation of Microsoft Dynamics AX to replacing legacy system. Less resource intensive. o Rollout of first State (Vi
Slide 11: Transformation Update
For personal use only TRANSFORMATION UPDATE • Rebalance of Fee earner and administration staff Headcount. • Staff numbers in Shine Lawyers reduced by 34 to 654. 11
Slide 12: Acquisition Update
For personal use only ACQUISITION UPDATE • Acquisition of Bradley Bayly effective 1 June 2015 (completed 14 August 2015) significantly strengthens presence in WA • Paid for via combination of cash, debt and scrip – while mitigating risk with earn-outs and deferred consideration • Increasing diversit
Slide 13: Acquisition Update
For personal use only ACQUISITION UPDATE • Progress on Integration of Subsidiaries • Macro environment for acquisitions • UK and US update 13
Slide 14: Regulatory Update
For personal use only Regulatory Update Queensland • Workcover o Legislation to overturn previous changes was passed in September o Change in legislation was made retrospective from 1st February 2015 o Passing of legislation and removal of 5% threshold will have a small positive impact on results in
Slide 15: Director Information & Executive Appointments
For personal use only Director information & Executive Appointments Key Board and Executive Management changes during FY15: Stephen Roche • Resignation as a director but continues as a consultant – August 2015 Simon Morrison • SMM will focus more heavily on growth opportunities for the Group. Courtn
Slide 16: FY16 Priorities and Guidance
For personal use only FY16 PRIORITIES AND GUIDANCE • Improving recoverability • Anticipate more growth through acquisitions • Improvement in operating cash flows through disbursement funding • Continued rollout of transformation project • EBITDA guidance – $52.0M to $56.0M 16
Slide 17: Disbursement Funding
For personal use only Disbursement Funding • Definition of a disbursement o Costs incurred by Shine (excluding Recoverable WIP Costs) directly attributable to a file in reaching Settlement, and are specified in the Client Agreement as reimbursable from the client damages awarded. Examples include ex
Slide 18: How does cash flow through the business?
For personal use only How does cash flow through the business? • Typical Personal Injury cases involve an 18 month timeframe • Non Personal Injury cases have a different profile and can be as long as five years (class actions) • Using the Personal Injury worktype as an example, cases taken on during
Slide 19: How does cash flow through the business?
For personal use only How does cash flow through the business? Example of a typical Personal Injury case lifecycle Case opened Case resolved 0 6 12 18 24 mths Net revenue $7.5k $7.5k $7.5k $7.5k Cash -$2k -$5k $30k fees disbursements + $7k disbursements • Revenue as work in progress is recognised pr
Slide 20: Banking Facilities
For personal use only Banking Facilities • Currently in advanced discussions to restructure business loans due to mature in March 2016 • Moving to interest rate only market rate loans with variable tenors • New facility to fund transformation project now in place • Increase in working capital facili
Slide 21: Accounting Policies
For personal use only Accounting Policies Revenue recognition • Revenue is recognised in the period in which the legal services are provided to the client. • The basis for charging the client is work performed and recorded in time sheets. Provisioning • Amounts are provisioned against work in progre
Slide 22: Questions?
For personal use only QUESTIONS? FOR MORE INFORMATION PLEASE VISIT: WWW.SHINE.COM.AU
Slide 23: Appendix
For personal use only Appendix STRICTLY CONFIDENTIAL 23
Slide 24: Financial Results
For personal use only FINANCIAL RESULTS Measure FY15 FY14 % change to PCP Revenue1 $150.6m $115.5m ↑ 30.4% Statutory EBITDA $44.0m $34.2m ↑ 28.7% Normalised EBITDA2 $45.4m $34.2m ↑ 32.7% Normalised EBITDA margin2 30.1% 29.6% ↑ Normalised NPAT3 $30.6m $22.2m ↑ 37.8% Normalised Net Operating Cash Flow
Slide 25: Balance Sheet
For personal use only BALANCE SHEET As at ($M) 30 Jun 15 30 Jun 14 Strong balance sheet: Cash and receivables 29.9 20.1 • Net WIP and disbursements increased by $67.3M reflecting both organic growth ($36.0M) and WIP and disbursements 239.3 172.0 acquisitions during the year ($31.3M at 30 Jun) PP&E a
Slide 26: Disclaimer
For personal use only DISCLAIMER This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of Shine Corporate Limited and certain plans and objectives of the management of Shine Corporate Limited. Such forward-looking st
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