Babcock International Group PLC · LSE:BAB
Babcock International — H1 2002 Earnings Presentation
18 slides from Babcock International's earnings presentation, November 2002
Slide 1: Babcock International Group PLC Interim Results to 30 September 2002
Babcock International Group PLC Interim Results to 30 September 2002 Gordon Campbell Peter Rogers Bill Tame 1
Slide 2: Babcock Strategy
BABCOCK STRATEGY • To become a leading supplier of support services by:- • Growing the support services businesses organically. • Acquiring businesses in our area of expertise (primarily in the defence sector). • Starting to build a civil support services business. • Disposing of the Materials Handl
Slide 3: Progress So Far
Progress So Far • Contracts won: Faslane: £400 million NPPO: £100 million SLAM: £100 million FIAST: £ 35 million AFGHANISTAN: £ 6 million • Contracts renewed: CRANWELL: £ 12 million per annum JEFTS: £ 3 million per annum LYNEHAM: £ 7 million per annum FRADU: £ 2 million per annum • Acquisitions: HUN
Slide 4: Financial Review
Financial Review W Tame 4
Slide 5: Group Operating Result
Group Operating Result – 6 months to 30 September £ million 2002 2001 % change Turnover Continuing operations 181.3 184.1 -1.5% Discontinued operations 0.2 42.9 Total 181.5 227.0 Operating profit* Continuing operations 9.2 7.9 +15.9% Discontinued operations (0.3) (0.8) Total 8.9 7.1 Goodwill (0.8) (
Slide 6: Continuing Operations
Continuing Operations – 6 months to 30 September Turnover Operating profit* 2002 2001 % change 2002 2001 % change Technical Services BES 87.3 103.8 7.2 7.9 Babcock Eagleton 4.5 6.4 0.0 0.4 Total 91.8 110.2 -16.7% 7.2 8.3 -13.1% Training and Support Defence Services 40.5 31.8 3.4 3.2 Infrastructure S
Slide 7: Tax, EPS & Dividend
Tax, EPS & Dividend – 6 months to 30 September £ million 2002 2001 % change Profit before Tax 7.0 0.1 Tax (2.0) (1.1) Profit/(Loss) after Tax 5.0 (1.0) Effective tax rate % 26% 25.1% Basic EPS on post tax profit 3.36p (0.64)p Basic EPS before non-operating exceptionals & goodwill 3.90p 2.39p 63% Div
Slide 8: Cash Flow (1)
Cash Flow (1) – 6 months to 30 September 2002 2001 Group operating profit* 8.1 4.4 Non-cash items Depreciation and amortisation 5.4 6.9 13.5 11.3 Increase in working capital (7.7) (4.5) Capital expenditure – net (inc. finance lease) (1.6) (4.5) Operating cash flow 4.2 2.3 *Before non-operating excep
Slide 9: Cash Flow (2)
Cash Flow (2) - 6 months to 30 September 2002 2001 Operating Cash Flow 4.2 2.3 Acquisitions and Disposals (24.5) 3.7 Interest (0.8) (0.8) Tax (1.4) (0.5) Dividends (2.5) (2.2) Translation differences/others (0.2) 3.1 Movement in net borrowings (25.2) 5.6 9
Slide 10: Group Balance Sheet
Group Balance Sheet September March £ million 2002 2002 Fixed assets Intangible 79.5 58.5 Tangible 19.9 22.4 99.4 80.9 Investments 4.4 4.2 Working Capital (23.7) (32.4) Pension pre-payments 70.9 70.5 Corporation Tax (5.2) (4.5) Dividends payable (1.6) (2.5) Provisions (26.2) (26.8) Net assets 118.0
Slide 11: Pensions
Pensions SSAP 24(policy) FRS 17 Sept 02 March 02 Sept 02 Balance Sheet Total pension fund surplus 130.8 130.8 65.2 Off-balance sheet surplus 59.9 60.3 - Balance sheet surplus 70.9 70.5 65.2 • Under FRS 17 decline in market value of assets @ 30.09.02 was 7.5% and the value of liabilities increased by
Slide 12: Pre-Contract Costs
Pre-Contract Costs • Group policy is fully compliant with UITF 34. • Pre-contract costs are expensed up to the point of attaining “preferred bidder” status. • Post preferred bidder, directly attributable external bid costs for defence work will be capitalised and amortised over an appropriate period
Slide 13: Operations Review
Operations Review P L Rogers 13
Slide 14: Operations Review – Technical Services
Operations Review – 6 months to 30 September Operating profit Turnover before goodwill & exceptionals 2002 2001 % change 2002 2001 % change Technical Services Total £91.8 £110.2 -16.7% £7.2 £ 8.3 -13.1% • Current order book is £187 million compared to £144 million at March 31st 2002. • HMS Invincibl
Slide 15: Operations Review – Training & Support
Operations Review – 6 months to 30 September Operating profit Turnover before goodwill & exceptionals 2002 2001 % change 2002 2001 % change Training & Support Total £64.1 £49.5 +29.3% £4.1 £3.3 +26.7% • Current order book is £492 million compared to £75 million at March 31st 2002. • Faslane contract
Slide 16: Operations Review – Materials Handling
Operations Review – 6 months to 30 September Operating loss Turnover before goodwill & exceptionals 2002 2001 % change 2002 2001 % change Materials Handling Total £25.4 £24.3 +4.1% £(0.9) £(2.6) +34.6% • Marine: Major turnaround and sale process commenced. • Chronos Richardson: Disposal well advance
Slide 17: Summary – Interim Results
Summary – Interim Results • Operating profits up 84% at £8.1m. • PBT £7m (to September 2001 £115,000). • Order book £700m (excluding SLAM, NPPO). • Virtually all strategic targets achieved. • Future of Rosyth strengthened. • Scene set for organic growth. • Market developments may offer further oppor
Slide 18: Babcock International Group PLC Interim Results
Babcock International Group PLC Interim Results to 30 September 2002 Gordon Campbell Peter Rogers Bill Tame 18
Babcock International Group — H1 2002 Earnings Presentation on 6ix