Slide 1: Redcentric plc FY14 results
Redcentric plc FY14 results June 2014 Tony Weaver - CEO Fraser Fisher - COO Tim Coleman - CFO
Slide 2: Redcentric at a glance
Redcentric at a glance Redcentric is a leading UK IT managed services provider • Borne from the demerger of Redstone in April 2013 and the acquisition of InTechnology Managed Services in December 2013 • Trading history since 1997 • Listed on London Stock Exchange April 2013 • Annualised revenues app
Slide 3: Trading summary
Trading summary • Strong results, with revenue, profit and cash all ahead of expectations • Integration on track. Cost synergies of £3m identified at the time of the IMS acquisition will be delivered • Exciting market opportunities – Organic growth in existing customer base – Up-sell delivering – Ne
Slide 4: Operational highlights
Operational highlights • Sales – Pipeline Increasing – Key wins • New - HSCIC • Returning – Berkeley Homes • More – The Salvation Army – Partnerships – Bid Team April September March SLA • Operations 13 13 14 – Service Level Improvement Response 91% 95% 98% – Key customer satisfaction Resolution 71%
Slide 5: Integration summary
Integration summary Transaction & integration costs £'m • Integration on-track Transaction costs 1.6 – Single management, sales & operating Demerger accounting charges 1.3 structure Transaction costs 2.9 – Back office integrated H1 FY15 Redundancy & staff exit costs 1.0 – Birmingham and Chelmsford o
Slide 6: Financial highlights
Financial highlights Reported Pro-forma* £'m £'m Revenue 58.3 87.4 Recurri ng % 71% 78% EBITDA 10.5 16.2 EBITDA ma rgi n 18.0% 18.6% Synergies 3.0 ** Operating cash-flow 9.1 Ca s h convers i on 86.3% Net debt 12.3 0.76x * Incl udi ng res ul ts of InTechnol ogy for 12 months , una udi ted ** Annua l
Slide 7: Income statement
Income statement Reported Pro-forma* £'m £'m Revenue 58.3 87.4 Gross margin 21.6 37.1% 40.0 45.8% EBITDA 10.5 18.0% 16.2 18.6% Depreciation (2.9) Amortisation (2.8) Transaction & integration (5.5) Share option charge (1.4) Operating loss (2.2) Finance costs (0.4) Loss before tax (2.6) Tax 4.4 Retain
Slide 8: High level of profitable, recurring revenue
High level of profitable, recurring revenue £70m £45m Reported Pro-forma* 68.1 Revenue Revenue £40m £60m 41.3 EBITDA EBITDA £35m £50m £30m £40m £25m £30m £20m £15m £20m 22.1% £10m 22.8% £10m 22.6% 10.0 17.7% £5m 7.0 9.3 10.0 5.1% 5.1% £0m £0m Recurring Services Product Recurring Services Product Pro
Slide 9: Cash-flow
Cash-flow Cash-flow £'m EBITDA 10.5 Working capital (1.4) Operating Cash-Flow 9.1 • Cash conversion recovered in H2 Ca s h convers i on % 86% after difficult H1 Capital expenditure (4.5) Transaction & integration (2.3) • High capex in H2 driven by Interest (0.4) customer contract wins Tax (0.1) • Un
Slide 10: Net debt & bank facilities
Net debt & bank facilities Net debt £'m • New facilities Dec ’13 Cash 3.9 Drawn debt (16.2) Net debt (12.3) • £23.2m, with stepped reduction to Dec ’16 Proforma EBITDA* 16.2 Net debt/EBITDA 0.76x • c.£11m headroom at year-end * Una udi ted • Very low gearing level £25m Available facilities £20m Net
Slide 11: Balance sheet
Balance sheet Balance sheet £'m Fixed assets 22.4 Intangible assets 88.1 110.5 Current assets 21.0 Cash 3.9 • Significant owned, managed & 24.9 controlled infrastructure assets Current liabilities (24.7) Net current assets 0.2 • Low debt level Bank debt (16.2) Finance leases (1.7) Provisions (1.2) •
Slide 12: Earnings Per Share
Earnings Per Share Earnings per share Statutory Adjusted £'m £'m EBITDA 10.5 10.5 Depreciation (2.9) (2.9) Amortisation (2.8) Transaction & integration (5.5) Share option charge (1.4) Finance costs (0.4) (0.4) Deferred tax movement 4.4 • Adjusted EPS excludes Profit from operations 1.8 7.2 certain n
Slide 13: Summary
Summary • The creation of Redcentric and the IMS acquisition has created a leading, focused UK managed services business • Strong FY14 results have demonstrated the stability and scale of the underlying operation • The integration is on track to complete this FY, and will deliver the savings identif
Slide 14: Appendices
13 Appendices iness technology. managed. "<) redcentric
Slide 15: Vision
Vision SUPPLIER (OPEX) XaaS UTILITY ASSET OWNERSHIP DATA CENTRE CUSTOMER (CAPEX) CUSTOMER MANAGEMENT SUPPLIER 14
Slide 16: Redcentric's differentiator
Redcentric’s differentiator 15
Slide 17: Services
16 Services o) <3 \ aPPLICATIONS Oracle e-business Database Support Middleware OS Support Virtualisation \ COLLABORATION Calls & Lines Telephony SIP Unified Communications Call Recording Fixed Mobile Convergence \ INFRASTRUCTURE Hybrid Cloud Exchange DBaaS Backup DRaaS Healthcare Cloud Hosting \ RET
Slide 18: Data centre and network assets
Data centre and network assets Data Centre 1,255 Racks across c50,000 Sq Ft, 867 used, 388 available for growth Reading £3.2m of investment in 2012 Reading refresh - 10,000 Sq Ft, PUE of 1.25, 420 rack capacity, Embedded in 10Gb network - High capacity supported; 3-8kw per rack, UPS & 3x back up gen
Slide 19: Coverage
Coverage Redcentric’s Hyderabad Office • NOT a call centre and NOT an outsource • Single team structure between UK and India – Huge skilled resource pool (9m) – Strong work ethic – 1st, 2nd and 3rd line technical resource • Development Opportunity – Back office functions – finance, HR, sales support
Slide 20: Competitive landscape
Competitive landscape One of the largest independent managed services businesses in the UK 19