Shine Justice Ltd. · ASX:SHJ
Shine Justice — H1 FY2016 Earnings Presentation
23 slides from Shine Justice's earnings presentation, Feb 23, 2016
Slide 1: FY16 Half Year Results
FY16 Half Year Results Simon Morrison, Courtney Petersen, Daniel Wilkie MANAGING DIRECTOR, CEO, CFO Tuesday, 23 February 2016 STRICTLY CONFIDENTIAL
Slide 2: Disclaimer – Important Notice
DISCLAIMER – IMPORTANT NOTICE [ This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of Shine Corporate Ltd and certain plans and objectives of the management of Shine Corporate Ltd. Such forward-looking statements
Slide 3: Shine Corporate - Half year ended 31 December 2015
STRICTLY CONFIDENTIAL Shine Corporate - Half year ended 31 December 2015 3
Slide 4: Half Year in Review
Half Year in Review Simon Morrison, Managing Director STRICTLY CONFIDENTIAL Shine Corporate - Half year ended 31 December 2015 4
Slide 5: Half year overview
Half year overview Issue Detail Financial Results Revenue $64.0m ($78.5m excluding provision change) EBITDA $2.1m ($19.6m excluding provision change) NPAT $1.3m ($13.6m excluding provision change) Gross Operating Cash Flow (GOCF) $3.6m1 (1H2015: $3.3m) Diversification Acquisition of Best Wilson Buck
Slide 6: Half Year Results Analysis
Half Year Results Analysis Daniel Wilkie, Chief Financial Officer STRICTLY CONFIDENTIAL Shine Corporate - Half year ended 31 December 2015 6
Slide 7: Financial results
Financial results Measure 31 Dec 15 31 Dec 14 $ change to PCP1 % change to PCP Statutory Revenue $64.0m $73.2m ($9.2m) ↓ 12.6% Revenue (excluding provision change) $78.5m $73.2m $5.3m ↑7.2% Statutory EBITDA $2.1m $20.7m ($18.6m) ↓ 89.9% EBITDA (excluding provision change) $19.6m $20.7m ($1.1m) ↓5.3%
Slide 8: Revised Guidance
Revised Guidance FY2016 EBITDA Guidance EBITDA Guidance range $24m - $28m STRICTLY CONFIDENTIAL Shine Corporate - Half year ended 31 December 2015 8
Slide 9: Balance sheet
Balance sheet As at ($m) 31 Dec 2015 30 Jun 2015 Cash on hand at 31 Dec is $9.3m (FY2015: $9.4m) Cash and receivables 27.1 29.9 Trade receivables reduced by $2.7m (13.2%) Work in progress 192.6 190.7 Unbilled disbursements 52.3 48.6 Gross WIP up $16.6m (7%) ($0.4m from BWB) offset by increase in WIP
Slide 10: Borrowings and net debt
Borrowings and net debt Measure Net debt at 30 Jun 2015 $12.3m Acquisition of Bradley Bayly $6.2m Acquisition of Best Wilson Buckley Family Law $3.4m FY15 Earn-out payments $3.1m Deferred consideration $3.2m Changes in working capital funding (working capital loan, overdraft, lines of credit, leases
Slide 11: Cash Flow
Cash Flow • Revenue is recognised over time as legal services are delivered • There is a lag between recognition of income and receipt of cash (fees billed on completion for successful cases) • Cash flows through the business in cycles • Cash is required to fund growth in productivity (via additiona
Slide 12: Banking facilities
Banking facilities Limit Drawn New facility agreements executed with CBA on 22 Feb 2016 Facility $m $m Key terms Market rate loans • Three $9m market rate loans of variable tenors due 31 Dec 2018, 27.0 27.0 (3,4,5yrs) 2019 and 2020 replacing current facility Working capital loan (2yrs) 11.0 11.0 • W
Slide 13: Transformation
Transformation Courtney Petersen, CEO STRICTLY CONFIDENTIAL Shine Corporate - Half year ended 31 December 2015 13
Slide 14: Transformation – Key Initiatives
Transformation – Key Initiatives • Business Intelligence Leadership & • Total Rewards Model • High-performing Culture Accountability PP Strengthen • Recoverability Shine RR Sustainable Results • Velocity Management • Organisational Structure & Capability OO Champion Champion Values Protect Protect •
Slide 15: Transformation – Key Initiatives (cont.)
Transformation – Key Initiatives (cont.) Revenue generation • Marketing strategy developed and campaign rolling out • Continuing to leverage strength of brand ambassador, Erin Brockovich • Brand enhanced by landmark High Court win • highest PI damages award by a Court in Queensland’s history Focus o
Slide 16: Subsidiaries & Summary
Subsidiaries & Summary Simon Morrison, Managing Director STRICTLY CONFIDENTIAL Shine Corporate - Half year ended 31 December 2015 16
Slide 17: Performance – Subsidiaries
Performance – Subsidiaries Subsidiary Operational Performance Sciacca’s Slow 1H but strong file openings following change in QLD Workers Comp reforms Emanate Decline in revenue from resources sector partially offset by increase in litigation, planning and related commercial work Stephen Browne Solid
Slide 18: Focus for remainder of FY16
Focus for remainder of FY16 Financial Performance Delivering on our forecast Transformation Roll out key initiatives through Shine Lawyers Marketing to drive revenue generation Sustainable business improvement to grow margins Acquisitions Strong contribution from the subsidiaries in the first half r
Slide 19: Key Messages
Key Messages Underlying business model remains strong Continue to execute our transformation program Executed new facilities agreement with CBA pushing debt maturity beyond 2018 No interim dividend but we expect to be in a position to declare a full year dividend Continue to monitor acquisition oppo
Slide 20: Questions?
QUESTIONS? STRICTLY CONFIDENTIAL 20
Slide 21: Appendices
APPENDICES STRICTLY CONFIDENTIAL 21
Slide 22: Typical business cycle of a Personal Injury case
Typical business cycle of a Personal Injury case • Revenue based on WIP which is recognised progressively over case life • On average a 25% provision is recognised against WIP (a function of expected recovery rate) • Case life varies by type of matter from 6 mths to over 5 years • Disbursements typi
Slide 23: WIP Provisioning Recap
WIP Provisioning Recap • Adjustment announced to ASX on 29 January 2016 • Provisioning change impacts all current cases excluding class actions, plus third party and other debtors • In “no-win, no fee” business not all current cases will ultimately succeed • Once we identify case unlikely to succeed