Kelly Partners Group Holdings Ltd. · ASX:KPG
Kelly Partners — H1 2019 Earnings Presentation
29 slides from Kelly Partners's earnings presentation, Feb 25, 2019
Slide 1: Kelly Partners Group Holdings Limited (KPGH) 1H19 Half Year Results
+ Kelly Partners Group Holdings Limited (KPGH) 1H19 Half Year Results ASX: KPG PRESENTED BY Brett Kelly, CEO and Executive Chairman Pauline Michelakis, CFO and Executive Director 25 February 2019 Kelly Partners Group Holdings Limited kellypartnersgroup.com.au
Slide 2: Disclaimer
+Disclaimer SUMMARY INFORMATION FORWARD LOOKING STATEMENTS This document has been prepared by Kelly Partners Group Holdings This document contains certain “forward-looking” statements. Forward-looking Limited ACN 124 908 363 (Company). This document contains information in statements are generally i
Slide 3: Section 1: 1H19 Results – Highlights
+Section 1 1H19 Results – Highlights
Slide 4: Kelly+Partners key statistics
+Kelly+Partners key statistics Founded in June 2006 and listed on the ASX since June 2017, Kelly+Partners Group is a network of accounting businesses with a focus on private businesses and their owners. 4 completed acquisitions since 1 July 2018 Growing pipeline of potential acquisition targets Grou
Slide 5: 1H19 Financial Highlights
+1H19 Financial Highlights Revenue & Profit Group Consolidated 1H19 Revenue $19.7m • Consolidated 1H19 Total Revenue of $19.7m compared to $19.2m in the prior year, a 2.6% increase Group Consolidated Reported 1H19 EBITDA $4.7m • Consolidated 1H19 Reported EBITDA of $4.7m compared to $4.8m in the pri
Slide 6: Kelly Partners Sydney CBD Deal Update
+Kelly Partners Sydney CBD Deal Update The major acquisition of the former BMF Chartered Accountants and Business Services business in the Sydney CBD in January 2017 (6 months prior to IPO). The deal included a 2 year earn out for one of the prior owners. It was essential to ensure that all required
Slide 7: Section 2: 1H19 Results – Financial Performance
+Section 2 1H19 Results – Financial Performance
Slide 8: 1H19 Statutory Income Statement
+1H19 Statutory Income Statement Continued growth in revenue, attributed NPATA and EPS $m 1H19 1H18 $ Change Percentage Reported Reported Change Revenue from Ordinary Activities 19.7 19.2 +0.5 +2.6% Cash from Operating Activities 5.4 3.1 +2.3 +73% EBITDA – consolidated 4.7 4.8 -0.1 -2.1% EBITDA % 23
Slide 9: 1H19 Lockup metrics
+1H19 Lockup metrics Effective management of lockup resulted in a continued decrease in lockup days^ Financial metrics 1H18 1H19 Group lockup days 93 days 81 days Group lockup days excluding Sydney 80 days 59 days K+P Group - Lockup days - 31 December 2017 to K+P Group exc KP Sydney - Lockup days -
Slide 10: 1H19 Balance Sheet
+1H19 Balance Sheet The business continues to have significant capacity for expansion and growth • Net debt gearing vs FY18 full year revenue at 38.5%, significantly under bank approved maximum debt capacity of 60% (undrawn debt capacity of approx. $8.5m) • Net debt has increased by $3.8m since 30 J
Slide 11: 1H19 Cashflow
+1H19 Cashflow Cashflow increased significantly compared to prior periods • Positive operating cashflow (net cash from operating activities derived from the Consolidated statement of cashflows in the statutory financials) of $5.4m, up from $3.1m (+73%) in 1H18 • Free cashflow has increased markedly
Slide 12: 1H19 Cashflow
+1H19 Cashflow Cashflow increased significantly compared to prior periods Kelly Partners Group - Free Cash Flow (FCF) $6,000,000 90% $5,360,730 82% 80% $5,000,000 70% $3,866,991 $4,000,000 60% 60% $3,095,526 50% $3,000,000 $2,870,152 40% $2,000,000 30% 20% $1,000,000 10% $0 0% 31/12/2017 31/12/2018
Slide 13: 1H19 Cashflow
+1H19 Cashflow Cashflow waterfall showing movements in cash for the half year 1H19 - Cashflow Statement Waterfall $8,000,000 $7,000,000 $5,360,726 $6,000,000 $5,000,000 $4,000,000 $3,000,000 -$4,365,845 $186,407 $2,000,000 -$1,455,910 $1,000,000 $1,440,262 $1,165,640 $0 Opening balance Operating act
Slide 14: NPAT to Operating Cashflow Reconciliation
+NPAT to Operating Cashflow Reconciliation 31/12/2018 31/12/2017 $’000 $’000 Profit after income tax 3,285 3,410 Depreciation and amortisation 543 510 Employee shares issued - non cash - 220 Change in assets and liabilities: Dec/(inc) trade and other receivables 469 801 Dec/(inc) accrued income 888
Slide 15: 1H19 Dividends
+1H19 Dividends Increased dividend payout by 10% on prior year to 1.1c per share/quarter • 1x final dividend, fully franked at 1c per share was declared and paid in July 2018 • 2 x quarterly interim dividends, fully franked at 1.1c per share were declared and paid since 1 July 2018 • The Company exp
Slide 16: Section 3: Path to Growth
“Section 3 Path to Growth KELLY PARTNERS GROUP HOLDINGS LIMITED.
Slide 17: 1H19 Continual Business Growth
+1H19 Continual Business Growth Long term continual growth in revenue, operating businesses and team. 24th largest accounting firm in Australia* * Australian Financial Review (AFR) Top 100 Accounting Firms in 2018
Slide 18: 1H19 Operating Businesses
5 H19 Operating Businesses Kelly Partners Group Holdings Limited mm indicates greenfield Operating Business mE Indicates specialist Operating Businesses within the network. KELLY PARTNERS GROUP HOLDINGS LIMITED.
Slide 19: 1H19 Path to Growth
+1H19 Path to Growth ORGANIC NETWORK EXPANSION 1. 2. 3. 4. ORGANIC ACQUISITION – ACQUISITION – GREENFIELDS GROWTH TUCK IN MARQUEE 1. North Sydney 1. Inner West . - SBA - Le Page 2. Northern Beaches - BWD 3. Oran Park - MLT P P P
Slide 20: >$20m Capacity to Grow in Existing Offices
+>$20m Capacity to Grow in Existing Offices The seat capacities in our offices provide exceptional opportunities for the Group to complete tuck-in acquisitions and leverage significant operational efficiencies . Spare Additional # K+P Business $ per seat Seats Capacity Total 112 $200,000* $22,400,00
Slide 21: Acquisitions completed since 1 July 2018
+Acquisitions completed since 1 July 2018 A summary of the acquisitions completed since 1 July 2018 is listed below and represents 10% of FY18 revenue. Annual Expected # Entity Type Business Acquisition Date Revenue 1 SBA (pg. 22) Tuck-in Kelly Partners North Sydney 01/09/2018 $1,500,000 2 Le Page (
Slide 22: Acquisition of Sydney Business Accounting
+Acquisition of Sydney Business Accounting Completion date: 1 September 2018 • Kelly Partners North Sydney, a • Kelly Partners North Sydney is expected subsidiary of Kelly Partners Group to achieve significant operational Holdings Limited, acquired a 100% leverage with the acquisition of Sydney inte
Slide 23: Acquisition of David Le Page
+Acquisition of David Le Page Completion date: 4 September 2018 • Kelly Partners Inner West, a subsidiary of • Kelly Partners Inner West has retained Kelly Partners Group Holdings Limited, its Rozelle location acquired a 100% interest in David Le Page, a longstanding accounting • A contingent consid
Slide 24: Acquisition of BWD Chartered Accountants
+Acquisition of BWD Chartered Accountants Completion date: 6 December 2018 • Kelly Partners Northern Beaches, a • Kelly Partners Northern Beaches is subsidiary of Kelly Partners Group expected to achieve significant Holdings Limited, acquired a 100% operational leverage with the interest in BWD Char
Slide 25: Acquisition of MLT Accounting
+Acquisition of MLT Accounting Completion date: 1 February 2019 • Kelly Partners Oran Park, a subsidiary of • Kelly Partners Oran Park is expected to Kelly Partners Group Holdings Limited, achieve significant operational leverage acquired a 100% interest in MLT with the acquisition of MLT, with Acco
Slide 26: Section 4: Kelly Partners Sydney CBD Transformation
+Section 4 Kelly Partners Sydney CBD Transformation
Slide 27: Kelly Partners Sydney CBD Transformation
+Kelly Partners Sydney CBD Transformation How Kelly Partners transforms acquired businesses * DISCIPLINED PEOPLE DISCIPLINED THOUGHT DISCIPLINED ACTION 2. Review team members to ensure 4. Define clear 6. Technology 3. Review and agree 5. Disciplined 1. Review and select alignment to the defensible a
Slide 28: Kelly Partners Sydney CBD Transformation
+Kelly Partners Sydney CBD Transformation Reinvigorated facilities, technology, team and succession of partners completed
Slide 29: Thank you
+ Thank you February 2019 Kelly+Partners Group Holdings Limited kellypartnersgroup.com.au
Kelly Partners Group Holdings — H1 2019 Earnings Presentation on 6ix