Costain Group PLC · LSE:COST
Costain — H1 2012 Earnings Presentation
24 slides from Costain's earnings presentation, Aug 23, 2012
Slide 1: Results for the half-year ended 30 June 2012
Results for the half-year ended 30 June 2012 Engineering solutions…to meet national needs 23 August 2012
Slide 2: Overview
Overview > Another strong performance > Dividend increased for fifth consecutive year > High quality order book > On course to deliver year-end results in line with expectations Costain: Results for the half-year ended 30 June 2012 1
Slide 3: Financial review
Financial review 23 August 2012
Slide 4: Financial highlights
Financial highlights > Revenue1 up 2% to £477.9m (H1 2011: £468.5m) > Underlying2 operating profit up 16% to £10.7m (H1 2011: £9.2m) > Adjusted3 profit before tax up 67% to £17.0m (H1 2011: £10.2m) > Including transfer of PFI assets and one-off pension scheme costs > Basic earnings per share up 78%
Slide 5: Group revenue up 2%
Group revenue up 2% Costain Group PLC £m 600 500 400 300 £469m £478m 200 100 0 H1 2011 H1 2012 Infrastructure Environment Energy & Process £m £m £m 300 300 300 250 250 250 200 200 200 150 150 150 £219.4m £279.5m 100 100 100 50 £159.8m £127.1m 50 50 £88.6m £70.5m 0 0 0 H1 2011 H1 2012 H1 2011 H1 2012
Slide 6: Growing Group Profit
Growing Group Profit Group adj. profit from operations* £m 35 30 25 £11.2m H1 20 £2.0m H2 £2.7m £14.2m 15 £11.6m £9.4m PFI Sales †£7.8m £9.7m 10 23.6 20.6£8.8m £9.4m £10.1m 5 £7.2m £5.9m 0 2008 2009 2010 2011 2012 * Results stated before amortisation of acquired intangible assets and employment rela
Slide 7: Segmental income statement
Segmental income statement Half year ended 30 June 2012 Full H1 H1 Year 2012 2011 2011 £m Margin £m Margin £m Margin Infrastructure 10.9 3.9% 5.7 2.6% 10.2 2.2% Environment 1.6 1.3% 6.7 4.2% 17.5 4.7% Profit from 2012 PFI transfer to Pension Scheme 10.5 - - Energy & Process 2.4 3.4% 1.8 2.0% 4.7 3.3
Slide 8: Net finance (expense)/income
Net finance (expense)/income H1 H1 2012 2011 FY 2011 £m £m £m Net bank deposit/loan interest (0.5) (0.1) 0.1 IAS19 pension scheme interest: Expected return on scheme assets 13.7 16.3 32.3 Interest cost on present value of obligations (14.1) (15.4) (30.5) IAS19 pension scheme net interest (0.4) 0.9 1
Slide 9: Strong cash position
Strong cash position H1 2012 H2 2011 FY 2011 £m £m £m Cash and cash equivalents at beginning of period 140.1 144.3 144.3 Cash (used by)/ generated by operating activities (2.5) 23.0 34.8 Cash used by investing activities (1.9) (14.4) (34.8) Dividends (4.2) (3.8) (4.3) Effects of foreign exchange rat
Slide 10: Actions to manage pension obligation
Actions to manage pension obligation Net deficit of £29.6m (June 2011: £26.5m, December 2011: £39.7m) Further actions taken to manage the obligations: > 2012: Risk Management Measures > £20.3m PFI transfer to scheme completed in February 2012 > ETV and PIE offers to members completed, resulting in c
Slide 11: Increased dividend
Increased dividend > Interim dividend increased by 8% to 3.50p (June 2011: 3.25p) > Payment on 26 October 2012 to shareholders on the register as at 21 September 2012 > Option to take shares in lieu 12 10 8 6.75p 6 6.25p Final 5.5p Interim 5.0p 4 2 3.25p 3.5p 2.5p 2.75p 3.0p 0 2008 2009 2010 2011 20
Slide 12: Strategic update & operational review
Strategic update & operational review 23 August 2012
Slide 13: Costain's business model
Costain’s business model Our strategy is focused on major customers addressing national needs Sector ‘unique’ customer ENVIRONMENT INFRASTRUCTURE ENERGY & PROCESS aligned divisional structure Delivered though longer-term, larger contracts and extensions, incorporating a Over 90% repeat orders broade
Slide 14: Engineering solutions
Engineering solutions Integrated service London Bridge Station major redevelopment whilst keeping station offering fully operational Fresh solutions to Modularisation techniques for process plant installation at Sellafield complex problems Addressing new Water management Joint Venture with Severn Tr
Slide 15: Engineering solutions
Engineering solutions Maintaining national Leading provider of services to HA, building and maintaining major assets road network Smart solutions for Design and delivery of waste process infrastructure for Europe’s large scale projects largest waste PFI project Providing full in-house engineering ca
Slide 16: Engineering solutions
Engineering solutions Energy Technologies Institute (ETI) development of carbon capture Innovative solutions technology Crossrail Paddington Station and advanced works at Crossrail Bond Proven capability Street Broad service Operations and maintenance contract for Oil and Pipelines Agency offering E
Slide 17: High quality order book
High quality order book > Increased order book of £2.4bn (June 2011: £2.3bn) > Repeat business at over 90% > Work secured for 2012 increased to over £850 million > 28% support service activities in secured 2012 revenue > Preferred bidder positions maintained at more than £400 million > Bidding activ
Slide 18: Good visibility
Good visibility Group order book 30 June 2012 £m 2012 • c. £600m of revenue secured for 2013 2013 • More than £1.4 billion secured for 2014 and beyond 2014 onwards 0 200 400 600 800 1,000 1,200 1,400 1,600 Group order book 30 June 2011 £m 2011 2012 2013 onwards 0 200 400 600 800 1,000 1,200 1,400 1,
Slide 19: Summary and outlook
Summary and outlook > Another strong performance > Fifth consecutive year of dividend increase > Transformed into an integrated services provider > Major customers continuing to invest in capital and maintenance projects > On course to meet full year expectations Costain: Results for the half-year e
Slide 20: Appendix
; oom Appendix 23 August 2012
Slide 21: Other items and tax
Other items and tax Other Items > Amortisation of acquired intangible assets - £0.7m (H1 2011: £0.1m, FY 2011: £0.9m) > Amortised from date of acquisition (ClerkMaxwell - April 2011 & Promanex - August 2011) > Employment related deferred consideration - £0.9m (H1 2011: £Nil, FY 2011: £0.7m) > Accoun
Slide 22: Balance sheet
Balance sheet 30 June 2012 30 June 2011 31 December 2011 £m £m £m Assets Non current assets (excluding pension deficit deferred tax) 101.2 82.0 95.2 Trade and other receivables 184.7 175.7 190.3 Cash 133.2 151.2 141.7 Current assets 317.9 326.9 332.0 Total assets 419.1 408.9 427.2 Current liabilitie
Slide 23: PFI equity portfolio estimated valuation
PFI equity portfolio – estimated valuation Committed Director's Status Invested Capital Capital Valuation Valuation of Current Portfolio Bridgend Sold 20.00 Kings Sold Sirhowy Sold Kent Schools Sold Ealing Schools Sold Shropshire Sold Estimated Valuation (£m) Kent Elderly Sold 15.00 Kingston 3 Shire
Slide 24: Results for the half-year ended 30 June 2012
Results for the half-year ended 30 June 2012 Engineering solutions…to meet national needs 23 August 2012