Slide 1: 2016 Results Presentation
2016 Results Presentation Presented by Charles Skinner, Chief Executive Adam Councell, Group Finance Director 9 March 2017
Slide 2: Highlights
Highlights Group revenue up 41% to £129.4m (2015: £91.9m) Group adjusted* profit before tax up 41% to £23.0m (2015: £16.3m) Adjusted* earnings per share up 15% to 17.9p (2015: 15.6p) Final dividend per share up 21% to 2.67p (2015: 2.2p) making a full year dividend of 4.0p (2015: 3.2p) Oper
Slide 3: Financial Review
Financial Review
Slide 4: Consolidated Income Statement (adjusted)
Consolidated Income Statement (adjusted) Revenue (£m) 2016 2015 Change Revenue (£m) 129.4 91.9 + 41% Adjusted operating profit (£m) * 25.0 17.6 + 42% Finance costs (£m) (2.0) (1.3) + 54% Adjusted PBT (£m) * 23.0 16.3 + 41% Standard tax charge 20% 20.25% Adjusted profit for period (£m) * 18.4 13.0 +
Slide 5: Document Management
Document Management Revenue (£m) 2016 2015 Change Revenue (£m) 90.1 54.7 +65% Operating profit (£m) 22.0 15.1 +46% Operating margin 24.4% 27.6% -320 bps Revenue (£m) Revenue increase largely driven by acquisitions, most notably WRM Operating profit (£m) and PHS DS Organic growth of 6% Operatin
Slide 6: Relocation
Relocation Revenue (£m) 2016 2015 Change Revenue (£m) 39.3 37.2 +6% Operating profit (£m) 4.8 4.1 +17% Operating margin 12.2% 11.0% +120 bps Organic growth 2% (excluding ITP) Operating profit (£m) Harrow Green performed well despite quiet period around Brexit vote Harrow Green margins above 10
Slide 7: Exceptional Costs
Exceptional Costs £m 2016 2015 £m Restructuring costs 6.2 5.1 PHS DS + WRM 5.8 restructuring cost Transaction costs 1.2 0.4 Annual cost 7.7 savings Box relocation and associated costs 0.4 0.1 Other exceptional costs 2.5 0.8 Total exceptional costs 10.3 6.4 Restructuring cost driven by WRM and PHS
Slide 8: Cash Flow
Cash Flow 2016 £m 2015 £m Adjusted EBITDA 29.3 20.4 Exceptional costs (10.3) (6.4) Adjusted EBITDA after exceptionals 19.0 14.0 Working capital (including Gain/Loss on sale of FA) (1.0) (3.0) Discontinued operations 0.2 - Net cash from operations 18.2 11.0 Capex (5.2) (4.0) Interest/Tax (2.4) (1.9)
Slide 9: Balance Sheet and Debt Facilities
Balance Sheet and Debt Facilities 2016 2015 £m £m Non-current assets 240.7 160.3 Trade and other current assets 40.3 30.5 Cash and cash equivalents 13.4 8.5 Current Assets 53.7 39.0 Trade and other current liabilities (36.9) (25.5) Financial liabilities – borrowings (7.3) (3.7) Current liabilities (
Slide 10: Financial Summary
Financial Summary Revenue up 41% driven by 2015 and 2016 acquisitions Operating margins steady at 19% Head office costs remain low at £1.8m Total dividend up 25% to 4.0p Net debt reduced following WRM Ireland’s sale. This created headroom to part fund PHS DS acquisition Leverage marginal
Slide 11: Operational Review
Operational Review
Slide 12: Our Businesses
Our Businesses #2* #1* The majority of Records Management’s sales are from Harrow Green is the market leader in UK commercial the storage and retrieval of hard copy documents, relocations – the physical movement of office furniture and typically stored in cardboard boxes. It manages millions other p
Slide 13: Records Management – Operational Review
Records Management – Operational Review Performance ahead of management budget Operating margins > 30% Net box growth positive despite major customer exit 5% organic revenue growth WRM integration complete excluding IT platform transfer PHS Data Solutions integration largely complete exc
Slide 14: Records Management – Recent Major Acquisitions
Records Management – Recent Major Acquisitions UK market share estimates Pre-Oct 2014 34% Iron Mountain 60% Restore 6% Others Oct 2014: Restore acquires Cintas UK 34% 57% 9% Dec 2015: Restore acquires Wincanton 34% 53% 13% May 2016: Iron Mountain acquires Recall 40% 47% 13% Aug 2016: Resto
Slide 15: Records Management - Outlook
Records Management - Outlook Market continues to grow Pricing stable with scope for improvement Capacity utilisation and operational efficiency drives margins Ongoing opportunity to rationalise and improve property portfolio Opportunities for add-on acquisitions particularly of multi-disci
Slide 16: Datashred – Operational Review
Datashred – Operational Review Restore Shred achieved organic growth but still loss-making pre-Datashred Post-Datashred, good operating profit and margins achieved Restore Datashred absorption and rebranding of Restore Shred completed with significant cost savings Transfer from PHS IT system
Slide 17: Datashred – Outlook
Datashred – Outlook 13 well-invested UK sites give full national coverage Strong management team and sales capability Advanced IT systems Organic growth expected with substantial opportunity in unvended customers Major opportunity for earnings-enhancing market consolidation through acquisi
Slide 18: Scan – Operational Review
Scan – Operational Review Meaningful profit contribution Major seasonal contract executed successfully NDA contract progressing well Major NHS contracts operating profitably Ongoing improvement in gross margin (largely direct labour as % of revenue) Additional services in on-site capabil
Slide 19: Scan – Acquired Businesses
Scan – Acquired Businesses Transaction Revenue acquired 2013 Existing revenues £1.0m 2014 Cintas £6.4m 2015 Data Imaging & Archiving £0.6m Crimson £1.4m Wincanton £1.5m 2016 Capital Capture £5.9m Preliminary Results for the year to 31 December 2016 18
Slide 20: Scan – Opportunity
Scan – Opportunity One of two major UK scanning businesses Has scale to accommodate overhead now required in IT-driven business Developed expertise in on-site scanning Major long-term contracts in place Increasing volumes of NHS work Opportunity to increase market share both organically
Slide 21: Relocation – Operational Review
Relocation – Operational Review Year-on-year growth in revenues and operating margins at Harrow Green Relocom steady Sharp improvement in IT Efficient margins Poor performance from ITP 40 12.0% 30 10.0% 8.0% Revenue £m 20 37.2 39.3 6.0% Operating Profit 30.1 25.9 4.0% Operating Margin 10 22.
Slide 22: Relocation – Outlook
Relocation – Outlook Harrow Green and Relocom Excellent and constant customer base Revenue growth despite slower MoD contract Margins improving, especially in London – now above original long-term target Relocom minority stake acquired, raising Restore’s ownership to 100% IT Efficient Stro
Slide 23: PHS Data Solutions Integration
PHS Data Solutions Integration Datashred Restore Shred wholly absorbed with cost base removed Moved off PHS IT systems on schedule Rebranding as Restore Datashred underway Strong cultural fit with the Group, especially on CRM application Records Management Operational integration complete
Slide 24: Restore Group Customer Base
Restore Group Customer Base All businesses on one CRM system Latest acquisitions increase market penetration Commitment to cross-selling across Group Advantage of UK focus Valuable customer database will enable Restore to move with customers’ needs Group customer base 2016 Sector 2017 2016
Slide 25: Summary and Outlook
Summary and Outlook M&A strategy continuing to deliver An operator of scale in a coherent market space 4 market-leading business streams in very attractive markets Much opportunity for profitable growth, particularly for add-on acquisitions in all three Document Management business streams