Shine Justice Ltd. · ASX:SHJ
Shine Justice — FY2024 Earnings Presentation
33 slides from Shine Justice's earnings presentation, Aug 29, 2024
Slide 1: FY24 Results Presentation
FY24 Results Presentation 29 August 2024
Slide 2: Acknowledgement of Traditional Custodians
Shine Justice acknowledges the Traditional Custodians of the Country throughout Australia and their connections to land, waterways and community. We pay our respects to Aboriginal and Torres Strait Islander cultures and to Elders past, present and emerging.
Slide 3: Important Notice
Important Notice This presentation contains certain forward-looking statements with respect and objectives of the management of Shine Justice Ltd. Such forward-looking statements involve both known and unknown risks, uncertainties, assumptions and other important factors which are beyond the control
Slide 4: Contents
Contents Shine Justice Overview 5 FY24 Financial Results 9 Reset Initiatives 15 Debt Profile 18 Personal Injury Segment 20 Class Actions Segment 25 FY25 Outlook 31
Slide 5: Shine Justice Overview
Shine Justice Overview
Slide 6: Australia's Market Leading Personal Injury Law Firm
6 Shine Justice Ltd 6 Australia's Market Leading Personal Injury Law Firm ASX debut 2013 Office Fee Revenue at locations at earners at ASX debut ASX debut ASX debut $107m 35 337 2024 FY24 Annual Offices1 Fee Earners Revenue 51 533 $199m 2024 Personal Injury Class Actions Adjacent Legal Fee Earners 4
Slide 7: Class Actions & NPA, Personal Injury
7 PURPOSE DRIVEN, RESILIENT AND DETERMINED TO SEEK JUSTICE FOR OUR CLIENTS Class Actions & NPA¹ Personal Injury Shine Lawyers Motor vehicle, workplace, • Class actions public liability, abuse Adjacent Legal Services • Shine Lawyers (Eastern seaboard) • Sciaccas (QLD) • Superannuation and disability
Slide 8: Market Profile
8 Market Profile A S X I N F O R M AT I O N BOARD OF DIRECTORS ASX Stock Symbol SHJ Graham Bradley AM Independent Chairman Shares on Issue (at 30/06/2024) 173,261,812 Teresa Dyson Non-Executive Director Share Price (at 30/06/2024) A$0.71 David Bayes Non-Executive Director Market Capitalisation A$123
Slide 9: FY24 Financial Results
FY24 Financial Results
Slide 10: FY24 Key Highlights
FY24 Key Highlights 10 Revenue EBITDA¹ Adjusted EBITDA² Key Achievements $198.6m $33.8m $45.0m Strategic -12% +17% -27% • FY24 was a reset year. • Divested non-core businesses. • Simplified focus of business to two main segments in Class Actions and GOCF¹ NPAT Adjusted NPAT² Personal Injury. $51.8m
Slide 11: Profit and Loss Statement
11 Profit and Loss Statement FY24($m) FY23($m) Variance($m) Revenue 198.6 226.2 (27.6) • Revenue was impacted by: o One off reversal of Ethicon Adjusted EBITDA¹ 45.0 61.4 (16.4) and Boston WIP. o Lesser fee earners in FY24. EBITDA² 33.8 29.0 4.8 • Tax rate of 37% - impacted Adjusted NPAT¹ 14.5 26.0
Slide 12: Dividend History & Outlook
12 Dividend History & Outlook • H2 Final Dividend of 4 cents. • Full-year dividend being 66% of adjusted EPS. • FY24 Dividend reflects confidence in future earnings and cashflow. • Board’s intention is to pay consistently growing dividends through increasing profit growth and cash flow.
Slide 13: Statement of Cash Flows
13 Statement of Cash Flows 30 Jun 24 30 Jun 23 $000 $000 Cash flows from operating activities • Improvement in FY24 Receipts from customers (inclusive of GST) 247,510 202,647 cashflows arising from: Payments to suppliers and employees (inclusive of GST) (176,278) (195,721) o Increased settlement act
Slide 14: Financial Results – Balance Sheet
14 Financial Results – Balance Sheet 30 June 24 30 Jun 23 $000 $000 Cash 29,427 21,088 • Net debt improvement driven Receivables 10,501 13,332 by improved cash flow in H1. Work in progress 356,372 380,933 Unbilled disbursements 95,412 89,052 • Reduction of work in PP&E and other 21,087 23,722 progre
Slide 15: Reset Initiatives
Reset Initiatives
Slide 16: FY23 Flagged Initiatives to Reset Cost Base for Growth and Efficiency
16 FY23 Flagged Initiatives to Reset Cost Base for Growth and Efficiency Simplify business structure and operations. Focus on driving meaningful revenue growth and improved earnings over time. Initiatives to underpin future Identified areas to remove corporate costs EBITDA growth within business uni
Slide 17: FY24 Achievements: Delivered FY23 Initiatives
17 FY24 Achievements: Delivered FY23 Initiatives Cost Reduction Non-Core Businesses Cost reduction program in FY24 will deliver Business restructure including discontinuation inbuilt future cash savings of $14.7m and or winddown of businesses and practice expense savings of $12m. Without FY24 cost a
Slide 18: Debt Profile
Debt Profile
Slide 19: Interest Bearing Debt Profile
19 Interest Bearing Debt Profile Below 21% Net debt reduction $26.1m $55.5m BETWEEN FY23 AND FY24 HAS NET DEBT GROSS DEBT D E B T / E Q U I T Y R AT I O BEEN THROUGH IMPROVED Well below industry average CASH CONVERSION IN FY24 47 years with CBA 7% Capex investment AV E R A G E MAIN INCREASE IN DEBT
Slide 20: Personal Injury Segment
Personal Injury Segment
Slide 21: Personal Injury Market Overview
21 Personal Injury Market Overview¹ Industry Products & Services Market Share Segmentation 9.40% 8.40% 28.00% 35.50% 7.40% 74.80% 36.50% Shine Justice Motor Vehicle Accidents Allegro Funds (Slater & Gordon) Workplace Inuries Maurice Blackburn Other Other Personal Injury Claims ¹IBIS Report 2023
Slide 22: Personal Injury Financial Performance
22 Personal Injury Financial Performance • Annual net revenue now averaging $150m+. • Personal Injury contributes 70% of Group Revenue. • Strong emphasis in FY24 on cash conversion and resolving aging cases. • Push to resolving older cases increased WIP write-offs and impacted EBITDA. • Short term o
Slide 23: Personal Injury – FY25 Growth Strategy
23 Personal Injury – FY25 Growth Strategy Marketing effort and expenditure restructured to assist with stronger file growth compared to FY24. Detailed branch-by-branch v evaluation to determine the marketing efforts and costs needed to attract new files. v Significant reorganisation of the call cent
Slide 24: Personal Injury – Medium Term Growth Strategy
24 Personal Injury – Medium Term Growth Strategy Organic: Acquisition of files: Business acquisition: • Organic growth can be • Boost to short-term cash • 74.8% of PI market achieved by continuing to flow as file acquisitions controlled by second and improve processes which will have high file veloc
Slide 25: Class Actions & NPA Segment
Class Actions & NPA Segment
Slide 26: Class Actions & NPA Financial Performance
26 Class Actions & NPA Financial Performance • Short term strategy is to convert this segment to purely undertake Class Actions. • Annual contribution to Group Revenue: o Class Actions - 17% o NPA - 13% • Strategy is to significantly increase Class Action revenue. • Short term outlook is for improve
Slide 27: Class Actions Overview
27 Class Actions Overview #2 Shine Justice’s Class It is the 2nd largest Class Actions worktype Relationships established Action business began in Class Actions practice continues to be one of the with US law firms which QLD and is now located operating in Australia. fastest growth will accelerate g
Slide 28: Class Actions Portfolio
28 Class Actions Portfolio Current Class Actions Broad book of cases reflects strong pipeline of future 6 revenue and diversified portfolio. 4 No single concentrated risk. 5 6 Pipeline growing and is continually replenished. Strong medium term growth prospects in conjunction with 2 1 1 US strategy.
Slide 29: Class Actions - Litigation Funding
29 Class Actions - Litigation Funding Litigation funding allows Shine to undertake more Total number of actions being undertaken – Class Action cases than it would be able to take on 74% Litigation funded; 17% Shine funded and its own balance sheet. 9% Group Costs Order. Litigation funding improves
Slide 30: Class Actions Strategy
30 Class Actions Strategy Australian Strategy USA Strategy The business has sufficient capital and access to A strategic intention for Shine in FY25 and beyond is to Litigation funders to undertake actions: accelerate growth in class actions and international mass torts. • Class Actions continue to
Slide 31: FY25 Outlook
FY25 Outlook
Slide 32: FY25 Outlook
32 FY25 Outlook Shine is a strong defensive business: Clearer focus on two operating segments – Continued focus on expense management. PI & Class Actions. Organic growth opportunities in both Cash generation continuing priority. operating segments. US litigation funding to increase availability Shor
Slide 33: Thank you
JUSTICE NC sHINE N Thank you