Transcript Slide 1
Vp plc Presentation Final Results toforCarillion the year ended 9th June 2010 2010 31 March The Equipment Rental Specialists The Equipment Rental Specialists Summary Profit before tax, amortisation and exceptional items Revenue £16.0m £134.2m Earnings per share pre amortisation 27.57p Dividend per share 10.8p Operational review Highly satisfactory outcome Difficult trading conditions in most markets Explicitly profitable Early cost actions to mitigate fall in demand Strong operational cash flows Working capital benefit of £5.2m Fleet sales generated £8.5m, at a profit Cash conserved, borrowings reduced by £17.5m Net assets increased by £7m Quality, breadth and resilience demonstrated Revenue and Operating Profit trends Operating Profit (£m) Revenue (£m) 180 160 25.4 149.3 134.2 140 23.3 25 121.6 120 100 30 157.5 90.0 18.6 20 99.4 16.3 15 80 10.2 11.5 10 60 40 5 20 0 0 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 Group structure The Equipment Rental Specialists Divisional overview Divisions impacted by recession to varying degrees All divisions profitable All divisions cash generative Cost actions across all businesses Investment in sales and marketing Improved co-ordination between divisional sales teams Harbray acquisition post year end Business performance Revenues PBITA 2010 2009 2010 2009 £m £m £m £m Groundforce 32.9 40.6 -19% 9.2 11.0 -16% Hire Station 50.1 55.7 -10% 3.2 6.4 -50% Airpac Bukom 15.7 14.7 +7% 3.9 3.9 0% UK Forks 10.6 16.9 -37% 0.0 1.2 -100% TPA 14.2 15.6 -9% 2.2 1.7 +29% Torrent Trackside 10.6 14.0 -24% 0.2 1.2 -83% TOTAL 134.2 157.5 -15% 18.6 25.4 -27% 13.9% 16.1% Operating Margin Capital expenditure 2010 2009 £m £m Groundforce 3.6 7.3 Hire Station 4.8 9.5 Airpac Bukom 4.7 6.6 UK Forks 0.1 1.4 TPA 0.6 4.5 Torrent Trackside 0.9 1.2 Group 0.4 0.5 Total 15.1 31.0 Disposal Proceeds 8.7 10.8 Net expenditure 6.4 20.2 Rebranding Divisions rebranded to better reflect association with Vp whilst explicitly maintaining the specialist focus that customers value Strength through diversity Construction Mix 33% Historic Difficult Future Stable/difficult Civil Engineering 23% Stable Weakening Oil & Gas 13% Improving Improving Rail 9% Very weak Weak/improving Housebuilding 6% Minor improvement Gradual recovery Transmission 4% Good Good Events 3% Good Good Other TOTAL 9% 100% Stable Stable Overseas Revenue as % of Total Overseas growth 20 18 16 14 12 10 8 6 4 2 0 15% 10% 8% 5% 1% Mar 06 Mar 07 Mar 08 Year Overseas activities growing as proportion of Group revenues Airpac Bukom, plus TPA, Groundforce and Hire Station Mar 09 Mar 10 Oil and Gas – global support network North Sea Middle East Americas Singapore Africa Australia Overseas hubs established 2002- 2008 Operational outlook Anticipate overall stability with areas of volatility Breadth of markets will remain a key asset Maintain strong balance sheet but ….. suitable opportunities will be pursued In excellent financial shape to sustain the development of the Group over the longer term Financial review Financial highlights 2010 2009 Revenue £134.2m £157.5m -15% PBITA £18.6m £25.4m -27% Profit before tax and amortisation £16.0m £21.7m -26% Net margin 11.9% 13.8% ROCE 13.3% 17.0% NB: Prior year restated for IAS16 Components of pre-tax profit (14.4) 1.1 (0.3) 7.9 16.0 21.7 2009 PBTA Volume/ Margin Cost Saving Measures Profit on Disposal Financing Cost 2010 PBTA Cost saving measures (fixed costs) Annualised Current Year Savings Benefit £m £m Actions taken in Q4/FY09 4.6 3.7% 3.8 Actions taken in FY10 5.5 4.4% 4.1 10.1 8.1% 7.9 31 Mar 10 Employees 1,358 31 Mar 09 -8% 1,474 Earnings and dividend per share 2010 2009 Basic EPS 27.57p 37.99p -27% Diluted EPS 27.21p 36.83p -26% 10.8p 10.8p 2.6x 3.5x 28.6% 27.4% Dividend per share Dividend cover Tax rate +4% NB: EPS based on pre amortisation of intangibles and exceptional items Robust balance sheet 2010 2009 £m £m Property, plant and equipment 98.6 107.9 Intangible assets 39.8 41.2 Non current assets 138.4 149.1 Net working capital 5.4 5.6 Pension obligations (1.1) (3.2) Deferred tax (10.2) (8.4) - (0.1) Capital employed 132.5 143.0 Net debt (48.3) (65.8) 84.2 77.2 69 75 Deferred consideration Net assets Debtor Days Operating cash flow Operating profits Depreciation EBITDA Changes in working capital Share option awards Profit on asset disposals Gross capex Proceeds from disposals Exceptional items Operating cash flow 2010 £m 18.6 18.9 37.5 5.2 0.4 (3.4) (16.7) 8.7 (0.3) 31.4 2009 £m 25.4 19.0 44.4 (5.6) 0.4 (3.8) (34.2) 10.8 12.0 Total cash flow 2010 2009 £m £m Operating cash flow 31.4 12.0 Interest (2.6) (3.9) Tax (4.5) (6.0) Free cash flow 24.3 2.1 Pensions (2.2) (0.2) - (6.6) Dividends (4.5) (4.5) Purchase of own shares (0.1) (3.2) Change in net debt 17.5 (12.4) Acquisitions Modest gearing, comfortably within covenants Net debt Underlying gearing -17% -12% -23% 70 60 50 70% 65.8 69% 60% 64.7 54.8 40 48.3 50% 66% 53% 40% 30 44% 30% 20 20% 10 10% 0 0% Sep '08 Mar '09 Sep '09 Mar '10 Interest cover (12 months) Sep '08 Mar '09 Sep '09 -7% 7.1 7.14 7 1.46 1.48 1.37 6.9 6.7 -6% 1.5 1.4 6.9 6.94 Mar '10 Net debt / EBITDA (12 months) 7.2 6.8 -17% 80% 1.3 6.77 6.6 1.29 1.2 6.5 Sep '08 Mar '09 Sep '09 Mar '10 H1 09 FY 09 H1 10 FY 10 Bank facilities being refreshed June 31 March 31 March 2010 2010 2009 £m £m £m Due to expire Nov '10 - 50 50 Due to expire Sept '11 20 20 20 Due to expire June '13 35 - - 55 70 70 Overdraft facilities 10 10 10 Total facilities 65 80 80 Step-up option 15 - - Committed facilities Conclusion Long term shareholder value enhancement Highly satisfactory results in a challenging market environment Prudent financial management Double digit margins, double digit ROCE No asset write downs No bank restructuring No equity funding required Balance sheet strengthened organically Maintained dividend £17.5m cash – all units cash positive Quality returns Operating Margin (%) 20 15.6 15 11.5 Return on Average Capital Employed (%) 24 16.1 13.9 13.4 20 16 10 12 5 8 19.1 15.4 16.5 2006 2007 17.0 13.3 4 0 0 2006 2007 2008 2009 2010 Earnings per share (pence) 36.6 40 30 20 2009 2010 Dividend per share (pence) 38.0 12.0 27.6 24.0 2008 10.0 8.0 18.3 10.5 10.8 10.8 2008 2009 2010 8.25 6.6 6.0 4.0 10 2.0 0 0.0 2006 2007 2008 2009 2010 2006 2007 Outlook UK more stable but public sector funding challenges ahead Overseas contribution growing – adds further market diversification Quality opportunities scarce but will continue to be pursued Product and market mix provides downside resilience and upside opportunity Vp plc Presentation Final Results toforCarillion the year ended 9th June 2010 2010 31 March The Equipment Rental Specialists The Equipment Rental Specialists Supplementary schedules Net working capital Inventories Trade debtors Prepayments and other debtors Current assets Trade creditors Accruals, other creditors and tax Net working capital Debtor Days 2010 £m 3.8 24.1 3.2 31.1 (11.4) (14.3) 5.4 2009 £m 5.5 29.5 3.3 38.3 (12.6) (20.1) 5.6 69 75 Shareholder value £m Per Share 31/3/09 77.2 167p 31/3/10 84.2 182p Increase in balance sheet equity 7.0 Dividends paid 4.5 Value delivered 11.5 Balance sheet equity 15% 9% Effective rate of tax March 2010 % March 2009 % Standard rate 28.0 28.0 Permanent disallowables 0.5 0.6 (1.8) (1.8) Share schemes - current tax - (0.1) Share schemes - deferred tax - 2.1 Prior year adjustments 0.9 (2.0) Other 1.0 0.6 Effective rate 28.6 27.4 Chattels Shareholder return 250.0 200.0 150.0 100.0 50.0 0.0 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 Vp Plc May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10