Costain Group PLC · LSE:COST
Costain — FY2012 Earnings Presentation
26 slides from Costain's earnings presentation, Mar 6, 2013
Slide 1: Results for the year ended 31 December 2012
Results for the year ended 31 December 2012 6 March 2013
Slide 2: Overview
Overview > Another strong performance > Driven by continued focus on delivering integrated services to meet the complex requirements of major customers > High quality order book > Recommendation to increase the dividend for sixth consecutive year Results for the year ended 31 December 2012 1
Slide 3: Financial Review
Financial Review Tony Bickerstaff, Group Finance Director
Slide 4: Financial summary
Financial summary > Revenues of £934.5 million (2011: £986.3 million) > Underlying operating profit1 up 4% to £25.1 million (2011: £24.1 million) > Adjusted profit before tax2 increased 16% to £29.5 million (2011: £25.5million) > Adjusted basic earnings per share2 up 33% to 41.4 pence (2011: 31.1 pe
Slide 5: Increased earnings
Increased earnings > Profit growth reflecting successful implementation of strategy focused on major customers > Transition to c. 90% of order book value from target cost based contracts with better risk profile and incentive mechanisms….in line with major customer requirements > Support-service rel
Slide 6: Segmental income statement
Segmental income statement Year ended 31 December 2012 2012 2011 Underlying Profit/(loss) operating JVs/investment Profit/(loss) Operating JVs/invest before other Revenue1 profit sales before other Revenue1 profit ment sales items2 items2 £m £m £m Margin £m £m £m Margin Infrastructure 562.3 26.1 26.
Slide 7: Net finance (expense)/income
Net finance (expense)/income 2012 2011 £m £m Net bank deposit/loan interest/fees (0.8) 0.1 IAS19 pension scheme interest: Expected return on scheme assets 26.3 32.3 Interest cost on present value of obligations (27.4) (30.5) IAS19 pension scheme net interest (1.1) 1.8 Net finance (expense)/income (1
Slide 8: Other items and tax
Other items and tax Other Items > Amortisation of acquired intangible assets - £1.7 million (2011: £0.9 million) > Employment related deferred consideration - £1.7 million (2011: £0.7 million) > Accounting standard requires any consideration related to employment to be expensed over the required ser
Slide 9: Cash position
Cash position Impact on net cash due to…. 2012 2011 £m £m • Changing profile of business Net cash at beginning of period 140.1 144.3 − Increased level of support services activities Cash from operating activities (23.1) 34.8 − c. 90% of order book value from target cost based Cash used by investing
Slide 10: Actions to manage pension obligation
Actions to manage pension obligation > Actions announced in February 2012: > Transfer of interest in two PFI investments into the Costain Pension Scheme (‘CPS’) at agreed value of £20.3 million - completed on 22 February 2012 > Resulted in accounting profit on the transfer of £10.5 million > Impleme
Slide 11: Increased dividend
Increased dividend > Recommended final dividend for sixth successive year > Taking total for the year to 10.75p, a 7.5% increase on the prior year > Payment on 24 May 2013 to shareholders on the register as at 19 April 2013 > Option to take shares in lieu Pence 12 10.75p 10.00p 10 9.25p 8.25p Final
Slide 12: Business Review
Business Review Andrew Wyllie, Chief Executive
Slide 13: Costain today
Costain today Providing world class engineering services in design, delivery and maintenance to meet national needs Results for the year ended 31 December 2012 12
Slide 14: Costain's business model
Costain’s business model Our strategy is focused on major customers addressing national needs Sector ‘unique’ Infrastructure Natural Resources customer aligned divisional structure Delivered though longer- term, larger contracts and extensions, incorporating a Over 90% repeat orders broader range of
Slide 15: New divisional structure
New divisional structure Natural Resources Infrastructure Water Highways A leading provider of Capital Framework and Maintenance Framework Programmes Delivering major programmes for the Highways Agency, maintenance under the under the current AMP 5 arrangements current MAC contracts and Early Contra
Slide 16: Customers are demanding increasingly innovative solutions
“Customers are demanding increasingly innovative solutions. ‘Engineering Tomorrow’ is the Costain commitment to identifying, developing and implementing innovative solutions to major national needs.” Results for the year ended 31 December 2012 15
Slide 17: 'Engineering Tomorrow' in action
‘Engineering Tomorrow’ in action ‘Mario’ asset management tool – developed as part of the Costain Innovative technology Start-up initiative and now being sold commercially to customers First technology contract for Welsh Government for the maintenance Delivering technology of Road Network Communicat
Slide 18: 'Engineering Tomorrow' in action
‘Engineering Tomorrow’ in action Involvement with The Prince’s Trust, now taking on more Developing skills and apprentices, working with young offenders, offering a sought-after creating employment graduate programme, developing and running skills academies Corporate and Social Responsibility – ‘Cos
Slide 19: Leading to high quality order book
….leading to high quality order book > Order book of £2.4 billion (2011: £2.5 billion) > £900 million new contracts and extensions secured during the year > In excess of 90% from repeat orders > Target cost based contracts now circa 90% of order book value > In addition, preferred bidder positions o
Slide 20: Good visibility
Good visibility Group order book 31 December 2012 2013 Total: £2.4 billion 2014 2015 onwards 0 200 400 600 800 1,000 1,200 1,400 £m Group order book 31 December 2011 2012 Total: £2.5 billion 2013 2014 onwards 0 200 400 600 800 1,000 1,200 1,400 £m Results for the year ended 31 December 2012 19
Slide 21: Summary
Summary > Another strong performance in 2012 > Driven by continued focus on providing integrated services to meet the complex requirements of customers > Major customers continuing to invest £ billions to meet essential national needs > ‘Engineering Tomorrow’ to enhance and broaden our range of inno
Slide 22: Results for the year ended 31 December 2012
Results for the year ended 31 December 2012 6 March 2013
Slide 23: Appendix
Appendix
Slide 24: Balance sheet
Balance sheet 31 December 2012 2011 £m £m Assets Non current assets 91.2 95.2 (excluding pension deficit deferred tax) Trade and other receivables 183.2 190.3 Cash 107.4 141.7 Current assets 290.6 332.0 Total assets 381.8 427.2 Current liabilities (303.1) (348.3) Total Assets less current liabilitie
Slide 25: PFI equity portfolio – estimated valuation
PFI equity portfolio – estimated valuation Status Invested Committed Director's Capital Capital Valuation Valuation of Current Portfolio Bridgend Sold Kings Sold Sirhowy Sold 20.0 Kent Schools Sold Ealing Schools Sold Shropshire Sold 17.5 Kent Elderly Sold Estimated Valuation (£m) Kingston 3 Shires
Slide 26: Results for the year ended 31 December 2012
Results for the year ended 31 December 2012 6 March 2013