Transcript Slide 1
Vp plc Presentation Final Results toforCarillion the year ended 9th June 2010 2012 31 March The Equipment Rental Specialists The Equipment Rental Specialists Agenda ● Results Summary ● Operational Review ● Financial Review ● Conclusion 1 Results summary 2 2012 2011 Profit before tax and amortisation £16.0m £13.8m +16% Revenue £163.6m £141.0m +16% 30.8p 26.1p +18% 11.35p 10.8p +5% 13% 12% Earnings per share pre amortisation Total dividend per share Return on Capital Employed Highlights ● Impressive trading performance - ahead of market expectations ● No improvement in overall market conditions ● Organic revenue growth, double digit margins maintained ● Strong cash generation ● Borrowings unchanged ● Increased fleet investment to £32.1m (+33%) - ROCE improved ● Successful share tender offer in March 2012 ● Service and market specialisation continues to deliver results 3 Revenue and operating profit trends Revenue (£m) Operating profit (£m) Record revenues Positive profit trend 4 Operational review 5 Effective market re-alignment 6 Events £4.4m £14.3m Proportion of total Group revenue 2012 43% 24% 13% 8% 3% 9% Proportion of total Group revenue 2011 37% 31% 13% 7% 3% 9% Segmental % of Total Group Revenues Other Housebuilding £13.1m Oil and Gas £21.3m Total revenue in FY12 - £163.6m Construction £39.2m Infrastructure £71.3m Market Segments Group structure 7 Divisional overview ● All divisions profitable and growing ● Positives: ● ● – reputation for quality of service and equipment is delivering success across the divisions – appetite and opportunity for fleet investment is growing – divisional initiatives for continuing service improvement – rail, housebuild, oil and gas and utility markets supportive Challenges: – macro economic position tests market confidence, – general construction sector remains subdued – price inflation in transport, capital equipment and spares Potential for further progress 8 Business performance 9 Revenues PBITA 2012 2011 2012 2011 £m £m £m £m UK Forks 13.2 10.8 1.5 1.1 Maintained progress Groundforce 33.7 30.3 6.7 6.7 Specialist sub-sectors Airpac Bukom 19.5 17.5 3.6 2.7 LNG demand Hire Station 60.3 53.5 3.3 3.0 Safety services TPA 14.7 14.0 1.2 1.4 Operational challenge Torrent Trackside 22.1 14.9 2.2 1.6 Widespread demand 163.6 141.0 18.5 16.5 +12% 11.3% 11.7% TOTAL Operating Margin +16% Capital investment in fleet 10 2012 2011 £m £m UK Forks 8.6 4.4 High utilisation Groundforce 5.6 3.8 Specialist investment Airpac Bukom 2.0 1.3 New products Hire Station 8.1 10.3 Tool hire fleet re-alignment TPA 5.1 1.5 Pitch cover, overseas fleet Torrent Trackside 2.9 2.9 Maintained demand Total fleet capex 32.1 24.2 Disposal Proceeds (7.4) (7.2) Net expenditure 24.7 17.0 Operational outlook ● New financial year has started well ● We will maintain our focus to improve the quality of earnings in our existing businesses ● Uncertainty in domestic and European markets remains a factor but....... ● Our established strength in specialist sectors across a breadth of markets will provide opportunity and..... ● Our excellent, long established, track record demonstrates we have the ideas, the ambition and the ability to deliver further business improvement 11 Financial review 12 Financial highlights – excellent performance 13 2012 2011 Revenue £163.6m £141.0m +16% EBITDA £38.7m £35.0m +11% EBITA £18.5m £16.5m +12% Profit before tax and amortisation £16.0m £13.8m +16% Net margin 9.8% 9.8% ROACE 13.0% 12.3% Earnings per share 14 2012 2011 Basic EPS 29.63p 23.42p +27% Basic EPS (pre amortisation & exceptionals) 30.76p 26.09p +18% Net profit for year £12.2m £9.8m +25% Amortisation/exceptionals after tax £0.5m £1.1m Weighted average number shares 41.3m 41.8m Tax rate 20.2% 20.0% Dividend per share 15 2012 2011 Basic EPS 29.63p 23.42p Dividend per share 11.35p 10.80p 2.6x 2.2x Dividend cover Pence per share Dividend per share (pence) ● Maintained strong performance in second half ● Confident in ability to deliver in future ● Macro economic challenges stable ? Tender offer ● Share buy back of 3.1m shares at 254 pence per share ● £7.8m returned to shareholders ● Earnings per share enhancing ● Tender offer oversubscribed ● Successfully completed on 4 April 2012 at nominal expense ● Balance sheet liability of £7.8m at 31 March 2012 16 Robust ROACE - improved ROACE Average Capital Employed £m 17 Average Capital Employed £m ROACE Significant investment for organic growth 18 £m 100 99.7 96.4 90.9 88.2 80 60 Able to invest into customer demand • Fleet asset lives 3 to 10 years • 40 32.1 28.4 24.2 20 16.9 13.9 16.9 6.9 18.2 16.6 5.2 5.1 4.9 0 2009 2010 Fleet NBV Fleet Depreciation 2011 2012 Fleet Capex NBV Fleet Disposals Strong balance sheet 19 2012 2011 £m £m Property, plant and equipment 110.7 101.3 Intangible assets 39.0 39.6 Non current assets 149.7 140.9 Net working capital (9.4) 0.6 Pension/deferred tax (8.8) (9.5) Capital employed 131.5 132.0 Net debt (40.4) (40.5) Net assets 91.1 91.5 Gearing 44% 44% 63 65 0.9% 0.9% Debtor days Bad debt write off as % turnover 90% fleet Includes tender offer Low level gearing Further improvement Cash flow – significant capex net debt maintained 2012 2011 £m £m Operating profits 18.5 16.5 Depreciation 20.2 18.5 EBITDA 38.7 35.0 Changes in working capital 1.3 1.4 (34.6) (21.9) Proceeds from disposals 7.4 7.2 Profit on asset disposals (2.2) (2.3) Interest (2.5) (2.7) Tax (3.5) (3.1) Dividends (4.5) (4.5) Other (acquisitions and exceptionals) - (1.3) Cash movement (change in net debt) 0.1 7.8 Gross capex 21 20 Growth in EBITDA Capex growth Net debt maintained 21 Bank facilities and headroom 21 31 March 31 March 2012 2011 £m £m 3 year facility to Sep '11 - 20 3 year facility to Jun '13 35 35 4 year facility to Aug '15 30 - 65 55 5 10 70 65 Net debt 40.4 40.5 Headroom against facilities 29.6 24.5 Revolving credit Overdraft facility Total facilities 24 Comfortably within covenants 22 Greater than 3 times Less than 2.5 times • • Net debt reduced by £25m since 2009 Considerable headroom Conclusion 23 Conclusion 24 Financial Strengths ● ● ● ● ● Strong balance sheet - financial gearing 18% - risk mitigation and capacity to fund opportunities Strong cash flow £56m investment in rental fleet in last two years - reduction in debt Strong working capital management Further progress on debtors - 63 days Business Strengths ● ● ● ● ● Diverse, specialist, high value added services Broad spread of end markets Market leading positions Continuous innovation of products and services Growing importance of international exposure Management Strengths ● ● ● ● ● Consistent, long term focus on shareholder value creation Stable management team Change positive culture Integrity Track record of successful acquisitions - opportunities may arise in the future Performance Strengths ● ● ● ● ● Highest ever revenues - £164m Highest ever NBV rental assets - £100m Double digit operating margins - 11% ROCE growth - 13% Profit growth - 16% to £16m Supplementary schedules 24 25 Effective rate of tax 26 Mar 2012 Mar 2011 % % Standard rate 26.0 28.0 Impact of tax rate change (5.0) (6.4) Permanent disallowables 0.4 0.8 (1.8) (1.8) Share option schemes - (1.4) Prior year adjustments (0.3) (0.8) Non qualifying depreciation 0.8 1.6 Other 0.1 - Effective rate 20.2 20.0 Chattels Net working capital 27 2012 2011 £m £m Inventories 4.8 5.4 Trade debtors 30.0 28.7 Prepayments and other debtors 5.0 4.6 Current assets 39.8 38.7 Trade creditors (18.2) (18.8) Accruals, other creditors and tax (31.0)* (19.3) (9.4) 0.6 Net working capital *includes £7.8m tender offer credit Group history – 1954 to date 28 2002-2004 Shoring expansion through acquisition of Mechplant, Trenchshore & Eve Shorco 1954 Vibratory Roller & Plant Hire (Northern) Limited founded 2011 Mainland Europe Groundforce 2006 Acquisition of Bukom Oilfield Services (Airpac Bukom formed) 2001 Hire Station formed through merger of 5 regional tool businesses 1980 Shoring division established 2012 1996 Tool Hire: Cannon Tool Hire acquired in 1996 1973 Floated on main market Vibroplant plc 2006 2005 TPA and ESS acquired 1982 US powered access business established 2010 Geographical expansion: Global (Airpac Bukom). Eire (Groundforce), Germany (TPA) 2001 Renamed Vp plc 1954 1973 1980 1975 First move into specialist 1990 1980Groundforce acquired from SGB 2007 - 2009 Continuing growth in specialist areas via acquisitions of MEP and U Mole 2000 UK Forks division created 1990 1997 Rail: Torrent Trackside acquired 1996 Exit from USA; UK specialist businesses expanded Turnover 1970: £2m 1980: £14m 1990: £70m 2000: £55m 2010: £134m 2012: £164m Group Thumbnail ● Rental specialist serving diverse, niche end markets ● 6 operating divisions ● Established for over 50 years ● Mainly UK based with growing European exposure (Groundforce/TPA) and global 1980 presence (Airpac Bukom Oilfield Services) ● 1500+ employees; £100m asset base; £160m+ revenues 29 TPA 30 Europe’s market leader in portable roadways: • Operations in UK, Republic of Ireland and Germany • Skilled installation of bespoke roadway and fencing solutions Markets: • Transmission, outdoor events, rail, construction - UK and Europe Opportunities: • 1980 Regulated transmission programme, new products and European growth UK Forks 31 National hire of telescopic handlers/rough terrain forklifts: • Only UK national telehandler specialist • Fleet of c.1200 machines • Strategically located distribution network Markets: • General construction, housebuild and industry 1980 Opportunities: • Housebuilding improvement, market share growth Hire station Tool hire and specialist equipment for construction and industry: • Local tool hire branches supported by national call centre • Plus, specialist products and services ° ESS Safeforce – safety equipment and confined space training ° MEP – press fitting and electrofusion equipment ° Climate Hire – heating and cooling products ° Virtual Hire – ‘white label’ partnerships, e.g. Homebase, Garden Centre Group 1980 Markets: • Construction, industry, civil engineering, housebuild, DIY Opportunities: • Specialist products, market share growth 32 Groundforce 33 UK market leaders in the rental and sale of Shoring Products and Solutions: • • Groundforce has the largest excavation support fleet in the UK and Ireland Plus, specialist products and services ° Piletec – piling equipment ° Stopper Specialists – pipeline pressure testing ° Shorflo – pumps ° ‘U’ Mole – trenchless technology 1980 Markets: • Civil engineering (including regulated AMP programme), construction and housebuilding Opportunities: • AMP 5, European growth Torrent Trackside Provision of rail specific light plant, trackside lighting and skilled trackside personnel: • Genuine 24/7 x 365 national support • The widest range of specialist portable rail equipment in the UK • Significant safety and compliance barriers to entry in a regulated market Markets: • Maintenance and 1980renewals projects on national rail network, London Underground and Network Rail maintenance contract Opportunities: • LUL, Crossrail, increased renewal activity 34 Airpac Bukom International rental of high pressure air compressors, steam generators and specialist equipment supported by skilled engineers: • Global network of six service and distribution facilities located in the UK (Aberdeen and Great Yarmouth), Singapore, Australia, Middle East and Latin America • Rental assignments in more than 60 countries Markets: • Well testing, rig1980 maintenance, gas transfer, LNG Opportunities: • Recovery in well test market, new applications and greater penetration of under represented geographic regions 35