Kelly Partners Group Holdings Ltd. · ASX:KPG
Kelly Partners — FY2017 Earnings Presentation
36 slides from Kelly Partners's earnings presentation, Aug 24, 2017
Slide 1: Kelly+Partners Group Holdings Limited FY17 Year End Results
Kelly+Partners Group Holdings Limited (KPGH) FY17 YEAR END RESULTS ASX: KPG 24 August 2017 Copyright © 2017 Kelly + Partners All Rights Reserved. Transforming the SME accounting market
Slide 2: Disclaimer
Disclaimer —— SUMMARY INFORMATION This document has been prepared by Kelly Partners Group Holdings Limited ACN FORWARD LOOKING STATEMENTS 124 908 363 (Company). This document contains information in a summary form This document contains certain “forward-looking” statements. Forward-looking and gener
Slide 3: Table of Contents
Table of Contents Section 1: IPO Overview Section 2: FY17 Performance Highlights Section 3: FY17 Financial Information Section 4: Strategy and Outlook Appendix Transforming the SME accounting market 3
Slide 4: Presenting today from Kelly+Partners
Presenting today from Kelly+Partners Brett Kelly Pauline Michelakis Founder, Executive Chairman, CEO CFO Founded Kelly+Partners in 2006 CFO of Kelly+Partners since 2013 15 years management experience 20+ years experience in senior financial roles in financial services 20+ years in the financial serv
Slide 5: Section 1: IPO Overview
Section 1: IPO Overview
Slide 6: IPO Overview
IPO IPO Summary Overview • KPG prospectus lodged on 16 May 2017. —— • KPG successfully listed on ASX on 21 June 2017. • Offer size 7.3 million shares at $1.00 each. • New issuance split approx 40% primary, 60% secondary. • IPO demand split approx 40% institutional, 60% retail. • No net debt for pare
Slide 7: Current Share Register
Current Post IPO Share Ownership Share • Executive Chairman Brett Kelly holds 51% . Register • Other KPGH Board, KPGH Management and Operating Partners hold a further 12%. —— • All of the above shareholdings are escrowed until 1 month following the FY18 result*. • Institutional investors hold 19%, i
Slide 8: Share Price Since IPO
Share Price Since IPO Post IPO Share Price Performance —— • At the closing price yesterday, KPG has returned 46% on the IPO price of $1.00/share. KPG Share Price 1.70 1.60 1.50 1.40 Prof Forma Share Register Post IPO1 1.30 IPO price: $1.00 1.20 Closing Low: $1.36 1.10 Closing High: $1.55 1.00 0.90 0
Slide 9: Section 2: FY17 Performance Highlights
Section 2: FY17 Performance Highlights
Slide 10: FY17 Financial Highlights
FY17 Financial Highlights • Strong growth in Underlying Pro forma FY17 P&L metrics compared to prior year. • Underlying Pro forma FY17 P&L metrics all above prospectus forecasts. • EBITDA margins above both prior year and prospectus. • Reported NPAT impacted by non-recurring items. Underlying Pro fo
Slide 11: Strong Revenue Growth
Strong Revenue Growth FY17 FY16 Consolidated Pro forma Total Revenue $35.7m $31.2m Number of Offices 13 11 Number of Operating Businesses 16 12 Number of Operating Partners 38 25 Number of Total Team 192 124 Transforming the SME accounting market 11
Slide 12: FY17 Operating Highlights
FY17 Operating Highlights BUSINESS EXPANSION NETWORK EXTENSION Sydney GREENFIELD CBD Office NEW SERVICES joins Southern Highlands Sydney CBD Office Parramatta The Office CBD business of Wealth expansion joins launched Our Wealth business BMF Accounting was In the middle of 2016, the Mittagong office
Slide 13: Section 3: FY17 Financial Information
Section 3: FY17 Financial Information
Slide 14: FY17 Underlying Income Statement
FY17 Underlying Income Statement Strong growth in the Underlying P&L in FY17 was driven by: • solid organic growth across the Kelly+Partners network • Southern Highlands expansion into Bowral • addition of Sydney CBD business for 6 months of the financial year Underlying Pro forma Underlying Prospec
Slide 15: FY17 Balance Sheet & Cash Flow
FY17 Balance Sheet & Cash Flow • Following the IPO, the balance sheet remains strong. • Consolidated net debt at end-FY17 was lower than prospectus forecast and prior year. • Of the $11.7m consolidated FY17 net debt, $5.1m is attributable to KPGH shareholders. • FY17 cash flow was substantially high
Slide 16: Section 4: Strategy & Outlook
Section 4: Strategy & Outlook
Slide 17: FY18 Prospectus Forecasts
FY18 Prospectus Forecasts Number of Operating Businesses Consolidated Revenue ($m) 50.0 36% 20 40% 8% CAGR (FY16-FY18) 17 45.0 35% 16 35% 36.7 40.0 35.7 34% 15 30% 35.0 31.2 33% 12 30.0 25% 30.0 32% 10 10 20% 25.0 31% 20.0 30% 15% 15.0 29% 5 10% 10.0 28% 5% 5.0 27% 0 – 0.0 26% FY15 FY16 FY17 FY18 FY
Slide 18: Strategic Priorities for FY18
Strategic Priorities for FY18 Strategic Initiative Plans & Objectives • deliver FY18 prospectus forecasts • continued steady revenue and profit growth KPGH • pay quarterly dividends • maintain strong balance sheet, and improve working capital management • IT system review • ongoing steady demand for
Slide 19: Growth Strategy
Growth Strategy 1. Organic Growth —— Steady growth from SMEs driven by increasing tax Build out our existing locations via targeted addition Proven client acquisition model and proprietary complexity and of key people and systems drive compliance. fee parcels. market share gains. 2. Network 3. New E
Slide 20: Organic Growth
Organic Historical Organic Revenue Growth Growth —— Over the past 10 years, organic revenue growth for the Kelly+Partners network has averaged: ~4% pa Revenue EBITDA Margin Growth Target Target 32.5% The Company’s annual revenue growth target of At present, approximately one- 5% pa comprises: third
Slide 21: Network Extension
Network Extension Network Expansion —— Newcastle Windsor Hornsby Leura Macquarie Park Bondi Junction Liverpool Miranda Transforming the SME accounting market 21
Slide 22: Complementary Businesses
Complementary Businesses Transforming the SME accounting market 22
Slide 23: Kelly+Partners Brand and Culture
Kelly+Partners Brand and Culture Transforming the SME accounting market 23
Slide 24: Kelly+Partners Manifesto
Kelly+Partners Manifesto Transforming the SME accounting market 24
Slide 25: Kelly+Partners NSW Offices
Kelly+Partners NSW Offices Transforming the SME accounting market 25
Slide 26: Key Dates
Key Dates —— AGM 10 November 2017 September Quarter Dividend Paid December 2017 1H FY18 Financial Result February 2018 December Quarter Dividend Paid March 2018 March Quarter Dividend Paid June 2018 FY18 Financial Result August 2018 Transforming the SME accounting market 26
Slide 27: Appendix
Appendix KELLY + PARTNERS
Slide 28: Sources of Earnings
Sources 1. Equity Distributions of Earnings Distributions from >50% shareholding from each underlying Operating Business, paid pretax each month. —— 2. Management 3. Intellectual Services Fees Property Fees Fixed percentage fee based on Fixed percentage fee based on revenue paid monthly by the reven
Slide 29: Group Structure
Group Structure Transforming the SME accounting market 29
Slide 30: Existing Business Locations
Existing Business Locations —— Hong Kong Norwest Central Coast Central Tablelands Parramatta Western Sydney Northern Beaches Oran Park North Sydney Sydney South West Sydney CBD Southern Highlands Wollongong Transforming the SME accounting market 30
Slide 31: Business Model
Business The parent company KPG provides: Model + intellectual property —— + centralised management services + a controlling equity interest (>50%) across 16 Operating Businesses in 13 locations The key elements of the Kelly+Partners business model include: + clearly defined Mission & Values + owner
Slide 32: Owner-Driver Business Structure
Owner-Driver Business Structure OWNERSHIP / ASSETS FINANCIAL RETURN / DEBT + Capital + Distribution: Equity Interest + Back Office KPG + Fees: Centralised management + IP services + Fees: Intellectual Property 100% Subsidiary Company 51% + Fixed Assets + Debt: Acquisition + Employees Operating Busin
Slide 33: Differentiated Professional Services Model
Differentiated Professional Services Model Low tax complexity High tax complexity Long-term Macro Drivers Easy compliance Strong compliance Govt Budget surpluses Govt Budget deficits 100% ownership model Owner-Driver model Operating Business Model Multi-brand Single Brand Short-term agreements Long-
Slide 34: Kelly+Partners Offer
Kelly+Partners Offer . Pressure points for small partnerships Kelly+Partners solution Succession planning and staff retention Facilitate succession and long term alignment Management of sub-scale back office functions Centralise back office to drive workplace efficiencies Undifferentiated service of
Slide 35: Partnership Opportunity Filter
Partnership Broad sweep of private accounting firms Opportunity Filter Located in NSW (or Capital City CBD) with growing population and talent pool —— No more than 2 offices, and complimentary to existing network, with no geographic overlap 5 filters All offices 100% owned which potential (not affil
Slide 36: Board and Senior Management
Board and Senior Management —— Brett Kelly Stephen Rouvray Pauline Michelakis Ryan Macnamee Paul Kuchta Deputy Chair and Non- Executive Director Non-Executive Director Executive Director Founder, Executive Chair, Executive Director 2 years on Kelly+Partners 5 years with CFO since joining in 2013 Kel
Kelly Partners Group Holdings — FY2017 Earnings Presentation on 6ix