Slide 1: Final Results for the 12 months ended 31 December 2014
Final Results 2014 Final Results for the 12 months ended 31 December 2014 Chris Sander, CEO Yvonne Monaghan, CFO
Slide 2: Highlights
Final Results 2014 Highlights • Strong performance for the Group • Revenue increased by 8.7% to £210.4m • Adjusted operating profit increased by 28.2% to £21.8m • Adjusted profit before tax increased by 49.3% to £20.0m • Net debt £28.5m • Final dividend of 1.2p making 1.7p for the year, an increase
Slide 3: Financial Results: Income Statement
Final Results 2014 Financial Results: Income Statement Continuing 2014 2013 Increase Revenue 210.4 193.6 8.7% 1 Adjusted operating profit 21.8 17.0 28.2% 1 Adjusted operating margin 10.4% 8.8% Exceptional items and amortisation (8.4) (1.2) 1 Adjusted PBT 20.0 13.4 49.3% 1 Adjusted fully diluted EPS
Slide 4: Financial Results: Cash Flow
Final Results 2014 Financial Results: Cash Flow £m 2014 2013 Adjusted operating profit 21.8 17.0 Depreciation and software amortisation (excl. exceptionals) 27.6 24.7 Working capital (excl. exceptionals) 2.4 1.7 Capital expenditure – Fixed assets (11.7) (4.6) – Rental stocks (net) (23.0) (16.9) – Fi
Slide 5: Divisional Results
Final Results 2014 Divisional Results Revenue £m Profit £m 180 25 160 140 20 120 15 100 80 10 60 40 5 20 0 0 2011 2012 2013 2014 2011 2012 2013 2014 Textile Rental Drycleaning Note: Profit is stated before exceptional items and amortisation of customer contracts
Slide 6: Divisional Results – Textile Rental
Final Results 2014 Divisional Results – Textile Rental £m 2014 2013 Increase Revenue 155.0 136.2 13.8% Adjusted operating profit 23.8 18.9 25.9% Margin 15.4% 13.9% • Textile Rental includes three brands: • Apparelmaster – workwear • Stalbridge – premium linen and chefs’ wear • Bourne – volume hotel
Slide 7: Divisional Results – Textile Rental
Final Results 2014 Divisional Results – Textile Rental • Strong new sales and additional volume added to existing customers in all three businesses • Overall revenue growth of 13.8% including £16.1m from ten months trading from Bourne • Improved margin to 15.4% • New Leeds workwear plant costing £8.
Slide 8: Textile Rental – Market and Strategy
Final Results 2014 Textile Rental – Market and Strategy • UK Textile Rental market estimated to be worth over £1.2bn in annual sales Estimated total Estimated market JSG share Workwear £190m 45% Hotels and Restaurants £540m 8% Healthcare (NHS) £200m ‐ Washroom Services £300m 6% • Large target market
Slide 9: Textile Rental – Market and Strategy
Final Results 2014 Textile Rental – Market and Strategy • Diverse customer base with over 43,000 customers • Average workwear spend by location is approx. £35 per week • Continued investment in facilities to increase processing capacity and productivity • Further expansion into volume hotel linen ma
Slide 10: Divisional Results – Drycleaning
Final Results 2014 Divisional Results – Drycleaning £m 2014 2013 Change Revenue 55.4 57.4 (3.5)% Adjusted operating profit 1.6 1.6 ‐ Margin 2.9% 2.8% • Number of shops reduced to 311 (Dec 2013: 326) • 78 Waitrose locations at December 2014 with 122 now open • New routes to be developed to access con
Slide 11: Drycleaning – Strategy - Reorganisation
Final Results 2014 Drycleaning – Strategy ‐ Reorganisation Reorganisation announced 6 Jan 2015 – cost not included in 2014 results 109 Branches to close Continued roll out of Waitrose collection and delivery location Rationalisation of support infrastructure to support leaner network Evalu
Slide 12: Exceptional Items
Final Results 2014 Exceptional Items Continuing, £m 2014 2013 Restructuring costs – Drycleaning ‐ (1.2) Restructuring costs – Textile Rental (1.3) ‐ Acquisition related costs (0.6) ‐ Pension (costs) / credits (4.9) 0.6 Total (6.8) (0.6) Exceptional costs to be incurred in 2015 include £1.0 million t
Slide 13: Bank Facilities
Final Results 2014 Bank Facilities • Current facility signed on 21 February 2014 comprising £60.0m RCF to May 2018 • Margin on RCF ranges from 1.5% to 2.25% with initial margin for 2015 at 1.5% • Hedging swaps LIBOR for an average fixed rate on £20.0m of debt of 1.79% for 2015 • Significant headroom
Slide 14: Pensions
Final Results 2014 Pensions • Net IAS 19 Pension liability of £13.8m (Dec 2013: £2.4m) • Additional pension contributions of £2.0m in 2014 and £1.9m expected in 2015 • Significantly higher than assumed return on assets achieved • Remaining DB scheme closed to future accrual from December 2014 • Exce
Slide 15: Tax
Final Results 2014 Tax • Underlying tax rate1, of 22.4% (2013: 22.6%) compared to effective rate of 21.5% (2013: 23.25%) Notes: 1 Before tax on exceptional items and amortisation of customer contracts
Slide 16: The Group Moving Forward
Final Results 2014 The Group Moving Forward • Continued investment in facilities to drive efficiencies and increase capacity • Increase market share in targeted sectors within Textile Rental • Identify further acquisitions within Textile Rental • Waitrose partnership • On‐line and work place collect
Slide 17: Conclusion
Final Results 2014 Conclusion • Strong overall performance • Textile Rental ahead of management expectations • Successful completion of Bourne acquisition • Restructuring of Drycleaning business underway • Organic growth supported by continued investment in infrastructure • Scope to make further acq
Slide 18: Appendix
__ Appendix (FOHNSON SERVICE GROUP PLC
Slide 19: Divisional Results
Final Results 2014 Divisional Results 2014 2013 Operating Operating 1 Revenue Profit Revenue Profit1 £m £m £m £m Textile Rental ‐ Trading 155.0 22.7 136.2 17.8 ‐ Allocated Income ‐ 1.1 ‐ 1.1 155.0 23.8 136.2 18.9 Drycleaning ‐ Retail Drycleaning 55.4 1.6 57.4 1.6 Unallocated Costs ‐ Group Costs ‐ (3
Slide 20: Acquisition - Bourne
Final Results 2014 Acquisition ‐ Bourne • Share purchase of Bourne Holding Company and trading subsidiary • Consideration in cash on completion of £21.8m on a debt free, cash free basis • Included freehold building in Bourne with a fair value of £3.9m • Goodwill and Customer Contracts valued at £14.
Slide 21: Equity Raising
Final Results 2014 Equity Raising • Placing of 26.3 million shares at a price of 51p raising £12.8m net • Representing approximately 10% of the issued share capital • Used increase headroom in banking facility to maintain balance sheet strength and flexibility