Slide 1: Interim Results FY16: 13.10.2015
INTERIM RESULTS FY16 : 13.10.2015
Slide 2: Results
RESULTS • REVENUE UP 18.4% TO £61.8M • ORGANIC GROWTH OF 4.1% LED BY STRONG CLIENT ACTIVITY IN US • EBITDA UP 33% TO £8.5M • OP PROFIT* MARGIN UP TO 11.7% FROM 10.5% • PRE TAX* PROFITS UP 33% TO £7.2M • DILUTED EPS* UP 43% TO 7.3P • PRO FORMA INTERIM DIVIDEND OF 1.20P, UP 20% • NET DEBT £8.9M, AFTER
Slide 3: Progress
PROGRESS • US CONTINUES TO DELIVER EXCEPTIONAL GROWTH • RECENT ADDITIONS IN UK PROGRESSING WELL - ENCORE AND MORAR • CONSOLIDATING INSIGHT BUSINESSES UNDER MORAR • STORY AND EMEA UNDERGOING TRANSITIONAL YEARS • APAC PROGRESS AHEAD OF SCHEDULE • UK DELIVERING ON IMPROVED MARGIN EXPECTATIONS
Slide 4: Strategies
STRATEGIES • CONTINUE TO SIMPLIFY INTERNATIONAL OPERATIONS • SIMPLIFICATION OF INFRASTRUCTURE IN US AND UK • INVEST IN US EXPANSION FOR AGENT3 AND MORAR • CONTINUE TO IDENTIFY BOLT-ON ACQUISITIONS WHICH WILL FUEL LONG TERM GROWTH • ACQUISITION FOCUS REMAINS INSIGHT, CONTENT, TECHNOLOGY • LOOK FOR ST
Slide 5: Today
TODAY INSIGHT: CONTENT: TECHNOLOGY: MORAR BITE AGENT3 BLUESHIRT GROUP BEYOND LEXIS BDA M BOOTH CONNECTIONS MEDIA OUTCAST ENCORE STORY TEXT 100/RP VRGE 5 Next 15 group brands arranged by core focus
Slide 6: Financial Review
FINANCIAL REVIEW NEXTI/5
Slide 7: Income Statement
INCOME STATEMENT £M H1 2015 H1 2016 GROWTH % Revenue 52.2 61.8 18.4% Adj EBITDA 6.4 8.5 32.8% Adj. operating profit 5.5 7.2 Operating margin 10.5% 11.7% Adj PBT 5.4 7.2 33.3% Tax (1.7) (1.6) Minorities (0.3) (0.4) Retained Profit 3.4 5.2 Diluted EPS 5.1 7.3 43.1% Pro forma dividend 1.00 1.20 20.0% 7
Slide 8: H1 2016 Adjustments Breakdown
H1 2016 ADJUSTMENTS BREAKDOWN £M H1 2015 H1 2016 Adjusted pre tax profits 5.4 7.2 Business impairments (7.0) 0.0 Restructuring (1.1) 0.0 Deal costs 0.0 (0.2) Share based payments (0.0) (1.1) Unwinding of discount and change in (0.7) (0.5) estimate of earnout liabilities Amortisation of acquired inta
Slide 9: Regional Performance
REGIONAL PERFORMANCE £M REV H1 GROWTH H1 2016 MARGIN MARGIN 2016 ORGANIC OP H1 2015 H1 2016 PROFIT US 39.9 10.3% 8.3 23.0% 20.9% UK 12.8 (0.9)% 1.5 6.2% 11.5% Asia Pacific 5.9 (8.4)% 0.7 6.0% 13.2% EMEA 3.2 (9.0)% (0.1) 10.2% (3.5)% Head office (3.2) Total 61.8 4.1% 7.2 10.6% 11.7% • Continuing doub
Slide 10: Cash Flow Statement
CASH FLOW STATEMENT £M H1 2015 H1 2016 Inflow from op activities 5.6 8.6 Working capital 5.6 0.1 Net inflow from operations 11.2 8.7 Tax (1.3) (1.3) Net capex (1.9) (3.0) Acquisitions (1.5) (8.1) Own shares - 4.3 Interest (0.4) (0.4) Dividend payments (1.9) (0.3) Exchange loss on cash held (0.2) (0.
Slide 11: Cash Commitments
CASH COMMITMENTS £M At 31 July 2015 the balance sheet held a present value H2 FY16 2.8 of estimated future earn out commitments (equity and cash) of £11.1m. FY 2017 1.7 FY 2018 1.3 This compares with an undiscounted balance of £15.7m FY 2019 3.0 (£1.9m shares and £13.8m cash). FY 2020 1.9 FY 2021 3.
Slide 12: Conclusion
CONCLUSION SUMMARY OF THE RESULTS OUTLOOK • US continues to deliver • Looking at another record year in line exceptional growth with market expectations despite • Recent additions in UK increased investment progressing well – Encore and • Potential for US dollar and Euro impact Morar • Selective acq
Slide 13: Appendix
APPENDIX 13 NEXTI!5
Slide 14: Next 15 – A Digital Communications Group
NEXT 15 – A DIGITAL COMMUNICATIONS GROUP £109 1,255 MILLION REVENUES 15 14 AVERAGE STAFF (FY 2015) WORLDWIDE COUNTRIES BRANDS + LONDON 8.5% 85% 70 % REVENUES FROM US OF REVENUES FROM TECH HEAD OFFICE SAN CAGR REVS 2011-15 (FY 2015) & UK CLIENTS FRANCISCO OPERATIONAL CENTRE Half year to Jul 2015 unle
Slide 15: Management Team
MANAGEMENT TEAM Richard Eyre CBE Tim Dyson Peter Harris (Chairman) (CEO) (CFO) Richard joined in 2011, he is Tim joined the group in 1984 Peter was appointed CFO also Chairman of the Internet and became the global CEO in in 2013. He is also a NED Advertising Bureau. Prior to 1992. An early advocate
Slide 16: Key Clients
KEY CLIENTS • 28 clients generating over $1m in annualised fees in 6 months to July 2015 • 38% of group revenues from these 28 clients Data as at to Jul 2015 16
Slide 17: Investment Returns
INVESTMENT RETURNS £M FY 2015 12M to JUL 2015 Opening total assets 88.4 95.4 • Annualised return on capital employed is adjusted operating Closing total assets 107.8 116.7 profit after tax and minorities over Avg total assets 98.1 106.1 the last 12m period as a percentage of the average opening and
Slide 18: Next 15 New Brand Incubation Cycle
NEXT 15 NEW BRAND INCUBATION CYCLE MARKET INVESTMENT RIGHT SIZING £$ US/ UK LAUNCH INSIGHT Our new and existing Invest in skills and Test whether Launch the incubated Action/ resource brands provide resources either incubated brand has brand into new US/ continuous insight into externally or interna
Slide 19: Organic Growth
ORGANIC GROWTH GROWTH ON PRIOR 6M TO 6M TO 6M TO 6M TO 6M TO 6M TO FINANCIAL YEAR JAN 2013 JUL 2013 JAN 2014 JUL 2014 JAN 2015 JUL 2015 Next 15 group organic 2.2% 2.3% 4.2% 6.7% 5.8% 4.1% revenue growth US region organic 4.9% 13.3% 13.1% 11.1% 11.4% 10.3% revenue growth • Group/ US organic growth ex