Mears Group PLC · LSE:MER
Mears — FY2005 Earnings Presentation
17 slides from Mears's earnings presentation, March 2006
Slide 1: Results for the year ended 31st December 2005
Results for the year ended 31st December 2005 Stuart Black Chief Executive David Robertson Finance Director IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES ™
Slide 2: Today's presentation
Today’s presentation Page 1 • Highlights • Financial performance • Market overview • Order book and pipeline • Strategy update • Outlook IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES ™
Slide 3: Highlights of the year
Highlights of the year Page 2 • £315m of new contracts won • 38% organic growth in social housing turnover • 5.5% core margin in year ( 2004: 5.2%) • Record order book of £1 billion • Pipeline £1.9bn • Cash inflow of £4.1m • Management team strengthened IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMP
Slide 4: Financial performance
Financial performance Page 3 • Turnover £203.5m up 38.4%* • Profit pre share option charges £10.3m up 37.1% • Earnings per share** 11.4p up 35.0% • Dividend per share 2.6p up 36.8% * Social Housing turnover only within 17.2% overall increase ** Fully diluted normalised pre share option charges IMPRO
Slide 5: Segmental analysis
Segmental analysis Page 4 £’000 Turnover Op. profit ** Op. margin % 2005 2004 2005 2004 2005 2004 Social housing 144,086 104,086 7,964 5,395 5.5 5.2 Mechanical & electrical 50,820* 58,684 1,908 1,653 3.8 2.8 Vehicle collection 8,637 10,915 415 458 4.8 4.2 Totals 203,543 173,685 10,287 7,506 5.1 4.3
Slide 6: IFRS
IFRS Page 5 No impact on operations, strategy or free cash flow As predicted the only changes relate to share option charges (IFRS 2) and goodwill (IFRS 3) Effect of IFRS : £’000 2005 2004 Share option charges -515 -315 Goodwill amortisation +664 +664 Equity - mainly deferred tax +3,437 IMPROVING HO
Slide 7: Operating cash flow
Operating cash flow Page 6 2005 2004 Operating profit 9,772 7,187 Share option charges 515 315 Depreciation 1,437 1,115 Stock / WIP (735) (2,043) Debtors (1,442) (5,235) Creditors 1,120 5,322 Operating cash flow 10,667 6,661 91% of EBITDA converted into operating cash flow ( 2004: 78%) 103% of op. p
Slide 8: Cash flow
Cash flow Page 7 2005 2004 Opening cash balance 2,818 1,901 Operating cash flow 10,667 6,661 Interest (29) (71) Tax (2,271) (1,312) Capital expenditure (2,795) (2,529) Acquisitions (755) (1,088) Dividends (1,225) (864) Financing 532 120 Net movement 4,124 917 Closing cash balance 6,942 2,818 IMPROVI
Slide 9: Balance sheet
Balance sheet Page 8 2005 2004 Assets – non current: intangible 10,647 11,069 tangible 5,827 4,450 investments - 49 deferred tax 3,500 2,100 Stock/WIP 5,363 4,628 Debtors 31,852 30,410 Cash 9,774 8,078 Current liabilities (38,054) (37,951) Net current assets 8,935 5,165 Long term provisions (855) (2
Slide 10: Market overview
Market overview Page 9 IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES ™
Slide 11: Market overview
Market overview Page 10 • 11 English local authorities still to submit options appraisals • Increasing scrutiny around efficiency agenda • Partnership opportunities with large Northern Mets • RSL mergers continue to accelerate • Progress of Decent Homes standard IMPROVING HOMES, IMPROVING NEIGHBOURH
Slide 12: Order book
Order book Page 11 IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES ™
Slide 13: Phased order book
Phased order book Page 12 £m Consensus forecast turnover secured 2006 87% IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES ™
Slide 14: Order book awards
Order book awards Page 13 Brighton & Hove City Council 5 years Broomleigh Housing Association 5 years Croydon Housing 5 years Dover District Council 5 years Kensington Housing Trust 5 years Kingston Upon Thames 7 years Leeds City Council (2) 5 years London Borough of Greenwich 4 years Nottingham Cit
Slide 15: Opportunity pipeline
Opportunity pipeline Page 14 Current bid pipeline No. Value - Awaiting decision 6 £ 167m - Currently being prepared 7 £ 573m - Tenders due 9 £ 222m Bid pipeline £ 962m Current prequal pipeline - Awaiting decision 31 £ 703m - Currently being prepared 5 £ 48m - Prequals due 10 £ 140m Prequal pipeline
Slide 16: Strategy update
Strategy update Page 15 • Group Executive created • New senior management appointments • Continued investment in support infrastructure • Supply chain management initiative in response to efficiency agenda • Brand strategy developed around Thought Leadership • Continued commitment to CSR • Strategic
Slide 17: Outlook
Outlook Page 16 • Excellent platform for future growth • Record order book maintaining high visibility of earnings • Significant infrastructure investment • Exceptional market opportunity pipeline • Continued confidence in future prospects IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES ™