Slide 1: Full Year Results
Full Year Results for the 12 months ended 31 May 2016 7 July 2016
Slide 2: Agenda
Agenda Highlights Growth track record Group financial performance Industry landscape Assurance Escrow Domain Services Current trading & outlook Appendix 2
Slide 3: Highlights – FTSE 250 company
Highlights – FTSE 250 company 56% 74% 10% Group revenue Assurance revenue Escrow revenue €133m up 56% to £209.1m up 74% to £168.9m up 10% to £35.3m Acquisition of Fox-IT £43.7m 52% 6% 1,857 Employees Group Assurance Escrow operating worldwide EBITDA operating profit profit up 6% to up 52% to £25.8m
Slide 4: Exceptional items
Exceptional items £m Domain Services 13.7 Fees – Fox-IT & fundraising 3.5 Retention bonuses 1.7 Exceptional charges 18.9 • Withdrawal from Domain Services market - total £13.7m charge • Open Registry to be sold or curtailed - £6.0m • Managed Services assets reused or written off - £6.9m • Cash cost
Slide 5: 16 years of record growth
16 years of record growth Revenue (£m) - CAGR 28% Adjusted operating profit (£m) - CAGR 18% 250 50 200 40 150 30 100 20 50 10 0 0 05 06 07 08 09 10 11 12 13 14 15 16 05 06 07 08 09 10 11 12 13 14 15 16 Interim Fully diluted adjusted EPS (p) - CAGR 16% Dividend (p) - CAGR 25% Full year 12.00 5.00 10.
Slide 6: Revenues
Revenues 2016 2015 Growth Organic (£m) (£m) (%) (%) Security Consulting 138.9 74.4 87% - Software Testing & Web Performance 30.0 22.6 33% - Assurance 168.9 97.0 74% 25% Escrow UK 25.7 23.7 8% - Escrow US 6.2 5.2 20% - Escrow Europe 3.4 3.2 9% - Escrow 35.3 32.0 10% 10% Domain Services 4.9 4.7 5% - T
Slide 7: International mix of revenue
International mix of revenue UK Europe Rest of world 2016 59% 16% 25% £122.0m £34.2m £52.9m UK Europe Rest of world 2015 54% 10% 36% £72.1m £13.5m £48.1m 7
Slide 8: Operating profit & EBITDA
Operating profit & EBITDA Margin 2016 2015 Growth (%) (£m) (£m) (%) Assurance 15% 25.8 17.0 52% Escrow 57% 20.1 18.9 6% Domain Services - (1.7) (4.9) - Corporate - (5.7) (4.6) 24% Adjusted operating profit 18% 38.4 26.4 46% Depreciation - 3.7 2.6 40% Amortisation - 1.6 0.5 320% Group EBITDA 21% 43.7
Slide 9: Earnings per share & dividends
Earnings per share & dividends 2016 2015 Growth (£m) (£m) (%) Group EBITDA 43.7 29.5 48% Adjusted operating profit 38.4 26.4 46% Adjusted pre tax profit 37.0 25.5 45% Adjusted fully diluted EPS 11.2p 9.4p 19% Fully diluted shares (m) 258.1 214.0 21% Dividend per share 4.65p 3.98p 17% 9
Slide 10: Reconciliation of profit
Reconciliation of profit £m 43.7m (1.6m) 40 38.4m 37.0m (3.7m) (1.4m) (0.6m) 30 20 (18.9m) (1.1m) 10 9.4m (6.9m) 0 Group Amortisation Depreciation Adjusted Net Adjusted Unwinding of Exceptional Share Amortisation Pre-tax EBITDA operating financing profit discount on items based of acquired profit pr
Slide 11: Cashflow
Cashflow 2016 2015 (£m) (£m) Cash generated from operations 23.1 24.3 Net interest (2.0) (1.1) Income taxes (7.3) (3.4) Gross capital expenditure (13.5) (12.9) Acquisition of businesses (78.4) (19.8) Cash balances from acquisition 1.7 5.6 Dividends (10.3) (7.6) Cash outflow before financing activiti
Slide 12: Banking, cash & capital expenditure
Banking, cash & capital expenditure • Facility increased to £80m RCF, £30m term loan & £5m overdraft to Nov 2020 • Net debt £12.7m (May 2015: £50.6m) after equity raise & acquisition of Fox-IT • Underlying cash conversion at 107% of operating profits (2015: 107%) • Gross capital expenditure £13.5m (
Slide 13: Another bruising year for business
Another bruising year for business 13
Slide 14: All talk, no action
OF BOARDS PLACE CYBER RISK AS ATOP RISK- UP 29% FROM THE PREVIOUS YEAR* MUST BE EQUIVALENT TO EU GDPR IN ORDER TO TRADE WITH THE REST OF THE WORLD. It's clear | that while | awareness | of the issue is growing, we are not yet OF BOARDS CLEARLY UNDERSTAND seeing eal company currently THEIR APPETITE F
Slide 15: Board responsibility
Board responsibility • First plc to form Cyber Security Committee • Directors must be fully accountable • Lack of understanding or knowledge is not an acceptable excuse • No current requirement for companies to report cyber breaches • Most believe that it is the responsibility of the Audit Committee
Slide 16: Assurance
Assurance Assurance Revenue £168.9m Operating profit £25.8m Margin 15% Headcount 1529 FTE UK Europe US Headcount : Headcount : Headcount : 1022 FTE 256 FTE 232 FTE Australia Headcount : 19 FTE 16
Slide 17: Assurance
Assurance 2016 2015 Growth (£m) (£m) (%) Assurance revenue 168.9 97.0 74% Assurance operating profit 25.8 17.0 52% • Revenue growth of 74% - excellent organic growth of 25% • Benefiting from six months revenue from Fox-IT - £14.0m • FY margin 15% (2015: 18%) - reduced due to product sales - target s
Slide 18: Assurance
Assurance 2016 2015 Growth (£m) (£m) (%) Security Consulting 138.9 74.4 87% Software Testing & Web Performance 30.0 22.6 33% Security Consulting • Revenues grew by 87% • US & UK are working effectively for international clients • World’s largest security team • World class security operations centre
Slide 19: Escrow
Escrow Escrow Revenue £35.3m Operating profit £20.1m Margin 57% Headcount 181 FTE UK Europe US Revenue : Revenue : Revenue : £25.7m £3.4m £6.2m Headcount : Headcount : Headcount : 107 FTE 15 FTE 59 FTE 19
Slide 20: Escrow
Escrow 2016 2015 Growth (£m) (£m) (%) Group Escrow revenue 35.3 32.0 10% Group Escrow operating profit 20.1 18.9 6% Escrow UK revenue 25.7 23.7 8% Escrow • Excellent performance - strongest revenue growth in 10 years • Substantial margin & very strong cash conversion • Renewals grew to £20.0m (2015:
Slide 21: Escrow
Escrow 2016 2015 Growth (£m) (£m) (%) Escrow US revenue 6.2 5.2 20% Escrow Europe revenue 3.4 3.2 9% International • Excellent performance in US & Europe • Both US offices at full strength • Excellent performance from Europe – constant currency 12% growth • Global account management stronger & perfo
Slide 22: Domain Services
Domain Services 2016 2015 (£m) (£m) Domain Services revenue 4.9 4.7 Domain Services operating loss (1.7) (4.9) • Following strategic review decision made to withdraw from marketplace • Group is still committed to the concept • Take up of open generic domains & city codes fallen way short of initial
Slide 23: Current trading & outlook
Current trading & outlook • Assurance • Security Consulting is now global force - the size of some nation’s capabilities • Strong organic growth set to continue & allied to good staff retention • Fox-IT - on plan - integration on track • Continued strong, solid growth across Escrow • Withdrawal from