Slide 1: Interim Results H1 FY16
INTERIM RESULTS H1 FY16 FRASER FISHER — CEO TIM COLEMAN - CFO redcentric business technology. managed.
Slide 2: At a Glance
AT A GLANCE ¢ AIM listed (RCN), IT Services business. * Market capitalisation c.£280m, 145m shares in issue. * c.£110m revenue, 81% recurring. * Over 500 staff across 7 locations with Network Operation Centres in UK & India. * 65% of staff own shares. * Over 2000 UK mid-market clients. PRINCIPAL SEC
Slide 3: Interim Results Highlights
INTERIM RESULTS HIGHLIGHTS Successful execution of strategy delivers a strong financial and operational performance * Revenue UP 15% to £54.0m (H1 FY15: £46.8m), representing 8% organic growth * Contracted revenue UP 18% (12% organic) to £43.9m. Reduced product sales. ¢ Adjusted EBITDA UP 17% to £11
Slide 4: The Heart of Redcentric's Service
THE HEART OF REDCENTRIC’S SERVICE | : APPLICATIONS | NETWORKS COLLABORATION | SECURITY | INFRASTRUCTURE | MOBILE redcentric ss technology. managed.
Slide 5: Reaching Out from People to Things to Deliver Digital Programmes
REACHING OUT FROM PEOPLE TO THINGS TO DELIVER DIGITAL PROGRAMMES • • • • • • • • • • •
Slide 6: Secure Hybrid Cloud Services and Data Management
SECURE HYBRID CLOUD SERVICES AND DATA MANAGEMENT • • • • • • • • • • • • • •
Slide 7: Operations Update
OPERATIONS UPDATE Sales * Financial Services £1.1m Network & Collaboration * Retail £2.1m Network & Unified Communications * Not for Profit £1m Network * 6 Months sales pipeline: £85m +20% * New Win Split - upsell 59:41 new business * New logo - 55 Operations * Meeting all key client service deliver
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS H1 FY16 £'m Revenue 54.0 Recurring revenue 43.9 Recurring revenue % 81% EBITDA 11.8 EBITDA margin 21.8% Adjusted EPS 4.7 Dividend per share 1.5 Net bank debt (16.5) Net bank debt/ annualised EBITDA redcentric business technology. managed. 0.70x +15% +18% +17% +18% +50% H1FY15 £'
Slide 9: Revenue and Profit Analysis
REVENUE AND PROFIT ANALYSIS £50m 9 Revenue £12m 4 10.9 EBITDA £45m + 43.9 H1 FY14 pro-forma H1 FY14 pro-forma mH1FY15 £10m + £40m + 37 9.2 mH1 FY15 . mwH1FY16 mwH1 FY16 £35m | 33. £8m | 7.4 £30m + £25m + fom + £20m + f£4m + £15m 4 £10m + 5,1 5.9 65 £2m 4 1a l4 £5m 4 3.4 tr 6 3.6 0.8 £0m £0m T T — Re
Slide 10: Income Statement
INCOME STATEMENT H1 FY16 fm Revenue 54.0 +15% EBITDA 11.8 +17% EBITDA margin 21.8% Depreciation (2.8) Amortisation (2.8) Transaction & integration (3.6) Share option charge (0.7) Operating profit 1.8 Finance costs (0.4) Profit before tax 1.4 Tax (0.3) Profit for the period 1.1 Basic EPS 0.8p -67% Ad
Slide 11: Cashflow
CASHFLOW Cash-flow (£m) H1FY16 H1FY15 +/- EBITDA 11.8 Working capital (1.6) Operating Cash-Flow 10.2 Cash conversion % 87% Capital expenditure (3.4) Transaction & integration (2.2) Interest (0.4) Tax (0.2) Free Cash-Flow 4.0 Proceeds of share issues 0.5 Acquisitions (12.6) Dividends (3.6) Change in
Slide 12: Bank Facilities
BANK FACILITIES Net debt (£m) Sep'15 Mar'15 £50m Cash 10.0 3.2 £45m = Available facilities Drawn debt (26.5) (8.0) £40m Net bank debt (16.5) (4.8) m Net bank £35m debt Annualised EBITDA* 23.5 20.1 £30m Netbank debt/EBITDA —_0.70x 0.24x £25m Finance leases (3.9) (2.4) £20m Total net debt (20.5) (7.2)
Slide 13: Summary
SUMMARY Results * Strong organic revenue growth: recurring revenue +12% * Increased profitability: EBITDA margin of 22% (H1 FY15: 21%) * Adjusted EPS up 18% to 4.7p * £3.6m of dividends paid, 1.5p interim dividend announced, up 50% * land my team remain confident for year end Strategy * Net new cust
Slide 14: Appendix
APPENDIX redcentric business technology. managed.
Slide 15: Competitive Landscape
COMPETITIVE LANDSCAPE A TelecityGroup iomart 40% @)pulsant <1 30% BTe & NODEA- = IODE* g redcentric A 20% 6 _ technology. managed. iy maintel. Ps camptten® lh alternative [a 10% adapt ans ah Scr capt 0% We make IT work redcentric business technology. managed. Breadth of Service Offering 15
Slide 16: Critical Accreditations
CRITICAL ACCEDITATIONS 1SO27001 & ISO9001 Certified (British Standards Institution) PCI Compliant for hosting services at our Data Centres Authorised to process HM Government data marked 'Restricted' Accredited to connect to and supply services over Janet Accredited to store patient data for and beh
Slide 17: Earnings per Share and Dividend
EARNINGS PER SHARE AND DIVIDEND H1 FY16 H1 FY15 Earnings per share Statutory Adjusted Statutory Adjusted £'m £'m £'m £'m EBITDA 11.8 11.8 10.1 10.1 Depreciation (2.8) (2.8) (2.5) (2.5) Amortisation (2.8) (2.6) Transaction & integration (3.6) (0.3) Share option charge (0.7) (0.6) Finance costs (0.4)
Slide 18: Balance Sheet
BALANCE SHEET redcentric business technology. managed. Balance sheet (£m) Sep'15 Mar'15 Fixed assets 24.0 23.4 Intangible assets 92.4 82.6 116.4 106.0 Current assets 20.3 18.3 Cash 10.0 3.2 30.3 21.5 Current liabilities (19.9) (20.1) Net current assets 10.4 1.4 Bank debt (26.5) (8.0) Finance leases