Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — Euroz Securities Institutional Conference (March 2016)
21 slides from Southern Cross Electrical Engineering's conference presentation, Mar 15, 2016
Slide 1: Euroz Securities Institutional Conference
For personal use only Euroz Securities Institutional Conference Rottnest Island Graeme Dunn–CEO/Managing Director
Slide 2: About SCEE
About SCEE For personal use only Leading provider of specialised electrical Project life cycle support and instrumentation services design and construction of high voltage Delivers services to projects across Australia power line distribution, switchyards and and overseas throughout their life cycle
Slide 3: Highlights
Highlights For personal use only H1 16 revenue of $137.1m and NPAT of $3.8m Financial Strong balance sheet with $45.0m of cash and no debt at 31 December 2015 Fully franked interim dividend of 1.35 cents per share declared Market conditions remain challenging but we are continuing to secure work Ope
Slide 4: H1 projects
For personal use only H1 projects 3
Slide 5: Significant H1 projects
Significant H1 projects For personal use only CITIC Pacific Sino Iron Awarded approximately $80m of E&I works on process lines 3 to 6; manning peaked at over 400 during period Samsung Roy Hill Provision of E&I services during the construction and commissioning phases of the Roy Hill Iron Ore pro
Slide 6: H1 financial performance
H1 financial performance For personal use only H1 result driven by strong performance on HY16 HY15 Change key projects $m $m % Gross margins reflective of competitive Revenue 137.1 142.0 (3%) operating environment Gross profit 18.0 22.2 (19%) Prior year restructuring has delivered a Gross margin 13.
Slide 7: Balance sheet
Balance sheet For personal use only Dec 15 Jun 15 $m $m Strong balance sheet throughout the period Current assets 90.6 92.0 Cash of $45.0m and no debt at 31 December Non current assets 30.9 31.6 Total assets 121.5 123.7 Capex in the period was $1m and is expected to remain low for foreseeable future
Slide 8: Cashflow
For personal use only Cashflow 7
Slide 9: Financial trends
Financial trends For personal use only Note – H2 15 Revenue, Gross Profit and Net Profit After Tax are presented on an underlying trading basis. 8 A detailed reconciliation of statutory to underlying trading results can be found on slide 19.
Slide 10: Dividends
Dividends For personal use only Fully franked interim dividend of 1.35 cps declared Record date: 21 March 2016 Payment date: 14 April 2016 Anticipate maintaining full year dividend at 2.7 cps being the same absolute level as prior 3 years Continue to maintain balance between delivering returns to sh
Slide 11: Health, safety and people
Health, safety and people For personal use only Performed our operations in the period without a lost time injury Over eleven years LTI free in Australia Employee numbers over 700 at end of H1 Strong commitment to indigenous participation Award winning apprenticeship program 10
Slide 12: Order book
Order book For personal use only Order book at 31 December 2015 of $37m with a further $30m won so far in H2 Order book excludes $10m of forecast H2 work under recurring framework agreements and $5m growth on existing reimbursable contracts Market change from large capex to smaller sustaining capita
Slide 13: Near term outlook
Near term outlook For personal use only Market conditions in resources sector remain challenging Current projects progressing well and profitable Further profit expected in H2 but result dependent on the timing of award and execution of new work Tendering activity remains high and demonstrated abili
Slide 14: Sustainable resources business
Sustainable resources business For personal use only Sustainable resources business exists through exposure to sustaining capital and maintenance markets Leveraging off strong client relationships and brand recognition and securing regular orders Regional facilities opened in Newman and Karratha wit
Slide 15: Diversification strategy
Diversification strategy For personal use only Committed to targeting growth through expansion into adjacent and complementary sectors and new geographies Transferable project delivery and technical skills Will likely be a combination of organic and acquisitive Strong balance sheet to execute initia
Slide 16: Adjacent and complementary sectors
Adjacent and complementary sectors For personal use only Expand our E&I capability into new sectors and geographies: Transport infrastructure – over $100bn forecast construction spend in Australia by 2019 Social and commercial infrastructure – over $80bn forecast construction spend in Australia
Slide 17: Overheads
Overheads For personal use only Management highly focussed on cost control and ensuring an efficient operating structure Significant restructuring exercise performed late FY15 drove an overhead reduction of over 16% on PCP Targeting further reductions through cost saving initiatives Offshore service
Slide 18: CEO appointment
CEO appointment For personal use only Graeme Dunn appointed CEO and Managing Director in January Over 25 years’ international experience in heavy civil infrastructure, mining, oil & gas and building projects Extensive executive management experience in contracting businesses Has previously held seni
Slide 19: Conclusion
Conclusion For personal use only Strong H1 performance in difficult market conditions with revenue of $137.1m and NPAT of $3.8m Interim fully franked dividend of 1.35 cps declared Strong balance sheet and net cash of $45.0m provides growth capacity Prior year restructuring has reduced overhead base
Slide 20: Non-IFRS financial information
Non-IFRS financial information For personal use only SCEE’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in accordance with IFRS and there
Slide 21: Disclaimer
Disclaimer For personal use only Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Southern Cross Electrical Engineering Limited’s current intentions,