Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 2016 Earnings Presentation
25 slides from Southern Cross Electrical Engineering's earnings presentation, Mar 29, 2016
Slide 1: Investor Presentation – Half Year Results Roadshow
For personal use only Investor Presentation Half Year Results Roadshow 29March 2016
Slide 2: About SCEE
About SCEE For personal use only Leading provider of specialised electrical Core capabilities and instrumentation services design and construction of high voltage Delivers electrical services across Australia power line distribution, switchyards and and overseas substations Strong reputation for saf
Slide 3: Diversified across four sectors
Diversified across four sectors For personal use only Mining Mining Oil &OilGas & Gas Utilities Utilities Industrial Industrial 2
Slide 4: Highlights
Highlights For personal use only H1 16 revenue of $137.1m and NPAT of $3.8m Financial Strong balance sheet with $45.0m of cash and no debt at 31 December 2015 Fully franked interim dividend of 1.35 cents per share declared Market conditions remain challenging but we are continuing to secure work Ope
Slide 5: H1 projects
For personal use only H1 projects 4
Slide 6: Completed projects
Completed projects For personal use only Significant projects completed or nearing completion in H1: CITIC Pacific Sino Iron Awarded approximately $80m of E&I works on Process Lines 3, 4, 5 & 6. Manning peaked at over 400 in period Samsung Roy Hill Provision of E&I services during the constructi
Slide 7: H1 financial performance
H1 financial performance For personal use only H1 result driven by strong performance on HY16 HY15 Change key projects $m $m % Gross margins reflect competitive operating Revenue 137.1 142.0 (3%) environment – have remained consistent across calendar year 2015 and to date Gross profit 18.0 22.2 (19%
Slide 8: Balance sheet
Balance sheet For personal use only Dec 15 Jun 15 $m $m Strong balance sheet throughout the period Current assets 90.6 92.0 Cash of $45.0m and no debt at 31 December Non current assets 30.9 31.6 Total assets 121.5 123.7 Capex in the period was $1m and is expected to remain low for foreseeable future
Slide 9: Cashflow
For personal use only Cashflow 8
Slide 10: Financial trends
Financial trends For personal use only Note – H2 15 Revenue, Gross Profit and Net Profit After Tax are presented on an underlying trading basis. 9 A detailed reconciliation of statutory to underlying trading results can be found on slide 19.
Slide 11: Dividends
Dividends For personal use only Fully franked interim dividend of 1.35 cps declared Record date: 21 March 2016 Payment date: 14 April 2016 Anticipate maintaining full year dividend at least at 2.7 cps being the same absolute level as prior 3 years Continue to maintain balance between delivering retu
Slide 12: Health, safety and people
Health, safety and people For personal use only Performed our operations in the period without a lost time injury Over eleven years LTI free in Australia Employee numbers over 700 at end of H1 Strong commitment to indigenous participation Award winning apprenticeship program 11
Slide 13: Order book
Order book For personal use only Order book at 31 December 2015 of $37m with a further $30m won so far in H2 Order book excludes $10m of forecast H2 work under recurring framework agreements and $5m growth on existing reimbursable contracts 12
Slide 14: Sustainable resources business
Sustainable resources business For personal use only Sustainable resources business through exposure to sustaining capital and maintenance markets Current projects profitable and progressing well Profitable H2 expected with final result dependent on timing of award and execution of new work Market c
Slide 15: Ongoing resources sector exposure
Ongoing resources sector exposure For personal use only Leveraging off strong client relationships and brand recognition Regional facilities opened in Newman and Karratha and investigating additional locations Widening service offering to sector – small-scale civils and mechanical and specialist ser
Slide 16: Diversification strategy
Diversification strategy For personal use only Build on sustainable resources business through targeting growth by expansion into adjacent and complementary sectors and new geographies: Telecommunications Utilities Transport infrastructure Social, commercial and defence infrastructure 15
Slide 17: Capability and capacity
Capability and capacity For personal use only Transferable project delivery and technical skills Strong balance sheet to support execution Diversification likely to be a combination of organic and acquisitive initiatives A number of potential opportunities have been identified and are under evaluati
Slide 18: Telecommunications
Telecommunications For personal use only NBN roll out to ramp up significantly; expansion and upgrades of existing wireless networks; over $30bn forecast construction spend by 2019 SCEE complementary skills offering in this sector – fibre optics, communications and remote working Actively considerin
Slide 19: Utilities
Utilities For personal use only SCEE Infrastructure constructed over 35 overhead transmission powerlines in past 3 years Completed projects on power stations, water treatment plants, substations and solar power developments Executing transmission overhead line maintenance works under Western Power’s
Slide 20: Infrastructure
Infrastructure For personal use only Transport – over $100bn forecast construction spend in Australia by 2019. State Governments recycling capital to fund new infrastructure initiatives in motorways, railways and airports. Timing for entry suitable for SCEE Social and Commercial – over $80bn for
Slide 21: Overheads
Overheads For personal use only Management highly focussed on cost control and ensuring an efficient operating structure Significant restructuring exercise performed late FY15 drove an overhead reduction of over 16% on PCP Targeting further reductions through cost saving initiatives Offshore Service
Slide 22: CEO appointment
CEO appointment For personal use only Graeme Dunn appointed CEO and Managing Director in January Over 25 years’ international experience in heavy civil infrastructure, mining, oil & gas and building projects Extensive executive management experience in contracting businesses Has previously held seni
Slide 23: Conclusion
Conclusion For personal use only Strong H1 performance in difficult market conditions with revenue of $137.1m and NPAT of $3.8m Interim fully franked dividend of 1.35 cps declared Strong balance sheet and $45.0m net cash supports growth Prior year restructuring has reduced overhead base Market move
Slide 24: Non-IFRS financial information
Non-IFRS financial information For personal use only SCEE’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in accordance with IFRS and there
Slide 25: Disclaimer
Disclaimer For personal use only Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Southern Cross Electrical Engineering Limited’s current intentions,
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