Zigup Plc · LSE:ZIG
Zigup — Northgate — FY2016 Earnings Presentation
29 slides from Zigup's earnings presentation, April 2016
Slide 1: Preliminary results for the year ended 30 April 2016
Northgate plc – preliminary results for the year ended 30 April 2016 1
Slide 2: Agenda
Northgate plc – preliminary results for the year ended 30 April 2016 Agenda Introduction Andrew Page Financial review Paddy Gallagher Strategy and outlook Bob Contreras 2
Slide 3: Introduction
Northgate plc – preliminary results for the year ended 30 April 2016 Introduction Andrew Page 3
Slide 4: Financial review
Northgate plc – preliminary results for the year ended 30 April 2016 Financial review Paddy Gallagher 4
Slide 5: Group financial summary
Northgate plc – preliminary results for the year ended 30 April 2016 Operating profit Profit before tax EPS Group financial Apr-16 £94.3m £82.9m 49.0p summary Apr-15 £97.8m £85.0m 51.0p Apr-14 £72.6m £60.3m 35.1p After adjusting for the adverse impacts of previous depreciation Dividend (full year) N
Slide 6: Rate change impact
Northgate plc – preliminary results for the year ended 30 April 2016 Rate change The depreciation rate changes effective from 1 May 2012, impact 2014 and 2015 have resulted in a £3.7m reduction in operating profit compared to the prior year £m UK Spain Corporate Group Operating profit - reported 58.
Slide 7: Cash flow
Northgate plc – preliminary results for the year ended 30 April 2016 Cash flow £m FY16 FY15 Underlying operational cash generation 242.8 251.6 Net capital expenditure (155.5) (218.4) Net taxation and interest payments (18.8) (28.8) Share purchases and refinancing costs (5.6) (12.2) Free cash flow 62
Slide 8: Group fleet capital expenditure
Northgate plc – preliminary results for the year ended 30 April 2016 Group fleet capital expenditure £m FY16 FY15 Purchases UK 199.1 242.2 Spain 94.5 108.5 Disposals UK (127.0) (115.1) Spain (44.1) (42.4) Net fleet capex 122.5 193.2 Vehicles: Purchases UK 15,800 19,800 Spain 10,600 12,400 26,400 32,
Slide 9: UK P&L
Northgate plc – preliminary results for the year ended 30 April 2016 UK P&L £m FY16 FY15 Change Revenue: hire of vehicles 306.4 311.3 (4.9) Operating profit (excluding vehicle disposals) 37.6 41.2 (3.6) Vehicle disposals 20.5 27.8 (7.3) Total operating profit 58.1 69.0 (10.9) KPI FY16 FY15 Change Av
Slide 10: Spain P&L
Northgate plc – preliminary results for the year ended 30 April 2016 Spain P&L €m FY16 FY15 Change Revenue: hire of vehicles 190.3 188.4 1.9 Operating profit (excluding vehicle disposals) 34.4 27.0 7.4 Vehicle disposals 21.4 16.0 5.4 Total operating profit 55.8 43.0 12.8 In sterling foreign exchange
Slide 11: Ireland
Northgate plc – preliminary results for the year ended 30 April 2016 Ireland From FY17 Ireland will be reported as a separate segment: X.X% 4 rental sites and 2 Van Monster sites with 90 employees 3,200 vehicles on hire at 30 April 2016 35% compound annual VOH growth over the past 3 years 11
Slide 12: Strategy
Northgate plc – preliminary results for the year ended 30 April 2016 Strategy Bob Contreras 12
Slide 13: Strategy
Northgate plc – preliminary results for the year ended 30 April 2016 Strategy Optimise core business Increasing our addressable markets Developing the Van Monster business 13
Slide 14: Optimise core business: Sales and marketing (UK)
Northgate plc – preliminary results for the year ended 30 April 2016 Optimise core business Sales and marketing (UK) Strengthening – Our proposition – Our brand Changing our channels to market – Small SMEs (Telesales) – Larger SMEs (Field based sales team) – National (Consultative sales teams) 1
Slide 15: Optimise core business: Improved operational delivery
Northgate plc – preliminary results for the year ended 30 April 2016 Optimise core business X.X% Improved operational delivery 9.2% - Building further upon strong NPS - Improving workshop cycles Digital approach - Vehicle booking platforms - Customer management information - Website 15
Slide 16: Addressable markets: LCV parc
Northgate plc – preliminary results for the year ended 30 April 2016 Addressable markets Opportunity through service proposition to expand addressable market beyond traditional rental LCV Parc 7 million vehicles operated across the UK, Spain and Ireland 90% Purchased 5% Contract Hire 5% Rental 16
Slide 17: Addressable markets: Expansion of vehicle range
Northgate plc – preliminary results for the year ended 30 April 2016 Addressable markets X.X% Expansion of vehicle range - Refrigerated - Electric 9.2% - Utility Expansion of geographical footprint in the medium term - UK + 10-12 depots - Spain + 2-3 depots - Ireland + 3-4 depots 17
Slide 18: Maximise end of life proceeds
Northgate plc – preliminary results for the year ended 30 April 2016 Maximise end of life proceeds X.X% Growing retail presence: 9.2% - UK 20 sites - Spain 9 sites - Ireland 2 sites Number 1 used LCV retailer in the UK High repeat customer rates Opportunities to increase retail penetration to >50% a
Slide 19: Outlook
Northgate plc – preliminary results for the year ended 30 April 2016 Outlook EU referendum X.X% Experienced senior teams in the UK and Spain to execute strategy 9.2% Objective is to grow VOH steadily through FY17 19
Slide 20: Questions
Northgate plc – preliminary results for the year ended 30 April 2016 Questions 20
Slide 21: Financial summary
Financial summary Appendix 1 £m FY16 FY15 UK Spain Total Total Revenue: hire of vehicles 306.4 140.8 447.1 456.8 Operating profit (excluding vehicle disposals) 37.6 25.4 63.0 62.2 Vehicle disposals 20.5 15.9 36.4 40.1 Total operating profit 99.4 102.3 Corporate (5.1) (4.5) Group operating profit 94.
Slide 22: Capital employed
Capital employed Appendix 2 £m UK Spain Group Vehicles (hire and used) 468 234 702 Property 27 29 56 Other fixed assets 14 4 18 Trade and other debtors 67 17 84 Trade and other creditors (64) (15) (79) Capital employed 512 269 781 Net debt (204) (106) (310) Net assets 308 163 471 ROCE 11.3% 16.0% 12
Slide 23: Facilities and borrowing cost
Facilities and borrowing cost Appendix 3 £m April 2016 Rate* Syndicated bank facilities 438 Loan notes 78 Other facilities 16 532 Fixed rate borrowings 302 2.2% Floating rate borrowings 11 1.2% Net debt (excluding arrangement fees) 313 2.1% Headroom 219 * As at 30 April 2016 23
Slide 24: Financial covenants
Financial covenants Appendix 4 Interest cover Leverage Loan to value 10.00 9.00 2.00 70% 8.00 7.00 60% 1.50 6.00 50% 5.00 40% 4.00 1.00 30% 3.00 20% 2.00 0.50 1.00 7.8x 9.1x 1.4x 1.3x 10% 44% 39% 0.00 0.00 0% Apr-15 Apr-16 Apr-15 Apr-16 Apr-15 Apr-16 • EBIT headroom £62m • EBITDA headroom £79m • Loa
Slide 25: Operating cash flows
Operating cash flows Appendix 5 £m FY16 FY15 Operating profit (statutory) 90.6 95.8 Depreciation and amortisation 146.3 146.5 Working capital and other movements 5.9 9.3 Cash generated from operations 242.8 251.6 Net interest paid (10.5) (12.3) Net corporation tax paid (8.3) (16.5) Cash flow after i
Slide 26: UK KPIs (including Ireland)
UK KPIs (including Ireland) Appendix 6 April 2016 April 2015 Fleet size (closing) 53,300 56,100 Utilisation (average) 87% 88% Closing vehicles on hire 45,700 48,600 Revenue per vehicle £6,494 £6,390 Operating margin 19.0% 22.2% Headcount (closing) 1,865 2,057 PPU £1,014 £1,583 ROCE 11.3% 14.1% 26
Slide 27: Spain KPIs
Spain KPIs Appendix 7 April 2016 April 2015 Fleet size (closing) 39,800 39,400 Utilisation (average) 91% 91% Closing vehicles on hire 35,700 35,600 Revenue per vehicle €5,350 €5,301 Operating margin 29.3% 22.9% Headcount (closing) 994 914 PPU €2,102 €1,554 ROCE 16.0% 12.8% 27
Slide 28: Depreciation impact
Depreciation impact Appendix 8 The analysis below shows the year-on-year operating profit increase (decrease) arising due to the previous changes made to vehicle depreciation rates: £m UK Spain Group FY15 8.4 3.0 11.4 FY16 (5.9) 2.2 (3.7) FY17* (4.1) (1.6) (5.7) FY18* (2.7) (1.5) (4.2) FY19* - (2.1)
Slide 29: £100 vehicle
£100 vehicle Appendix 9 The analysis below represents the profit and loss and cash flow generation of a typical vehicle in the UK business over its life cycle, using a purchase price of £100 per vehicle*: £ P&L Cashflow Purchase (100) Net Disposal Proceeds 53 Total Holding Cost (47) Rental Revenue p