2016 results presentation - christie group/media/files/c/christie... · 2018. 8. 1. · • garden...

2016 Results Presentation David RuggChief Executive

Dan PrickettChief Financial Officer 1

An Introduction to Christie Group

David RuggChief Executive

2

About UsA leader in the provision of professional business services to the leisure, retail and care sectors

‘We believe that our market

position is key to maximising the

• Christie Group offers a portfolio of professional business

services for the leisure, retail and care sectors.

• Our focus on a limited number of sectors gives us an

unrivalled market awareness in each of these areas.

• We do not adopt a principal position or co-invest.

• We never compete with our clients.

Investment Presentation June 2013 © Christie Group plc, 2013

position is key to maximising the

opportunities presented by both

the recovering market on one

hand and one showing signs of

distress on the other.’

• We never compete with our clients.

• We operate in the sectors in which our experience allows

us to deliver intelligent solutions.

• The results: a greater understanding of our clients’

operations and a heightened ability to help them improve

efficiency, enhance trading profits and increase the value of

their businesses.

3

Group StrategyA client focused approach that leads to best-in-class results

Christie Group aligns its strategy around a number of

key focal points as illustrated. Our strategy is focused

on our clients to ensure that we meet their needs.

This strategic approach provides a clear and

consistent approach, which is tried and tested

through the business cycle.

With a focus on our core sectors, diversification

through our global reach, maximising synergies across

the group and a flexible approach we can deliver

Client

Focus

Brand

Strength &

Endurance


the group and a flexible approach we can deliver

best-in-class results for our clients.

• The agreed board objective is to rebuild profit

to that previously reached £10million plus.

• As profits increase, we intend to distribute a

rising and covered dividend stream to reward

shareholders while at the same time

strengthening the balance sheet

Financial

Stability

4

Professional Business Services (PBS)

Christie & Co is a leading specialist

firm providing business intelligence

in the hospitality, leisure, care and

retail sectors. A market leader in its sectors, it

employs the largest teams of sector specialists

in the UK providing professional agency,

valuation and consultancy services.

Christie Finance has 40 years’ experience in

financing businesses in the hospitality, leisure,

care, retail and medical sectors. Christie

Finance prides itself on its speed of response to

client opportunities and its strong relationships

with finance providers.

Stock & Inventory Systems & Services (SISS)

Orridge is Europe’s longest established

stocktaking business specialising in all fields of

retail stocktaking including high street,

warehousing and factory operations, as well as

supply chain services. Orridge prides itself on

the speed in which it supplies high quality

management information to its clients.

Venners is the leading supplier of stocktaking,

inventory, consultancy services and

related stock management systems

to the hospitality sector. Venners is the largest

and longest established stock audit company in

the sector in the UK.

Our BusinessesComplementary specialist services classified into two divisions


with finance providers.

With 40 years’ experience arranging business

insurance in the hospitality, leisure, care, retail

and medical sectors, Christie Insurance is a

leading company in its markets. It delivers and

exceeds clients’ expectations in terms of the

cost of their insurance and the breath of its

cover.

Pinders is the UK's leading specialist business

appraisal, valuation and consultancy company,

providing professional services to the licensed,

leisure, retail and care sectors, and also the

commercial and corporate business sectors.

Pinders staff use business analysis and

surveying skills to look ay the detail of the

businesses to arrive at accurate assessments of

their trading potential and value.

the sector in the UK.

Vennersys operates in the UK and North

America and delivers online Cloud-based

ticketing sales and admission Systems to visitor

attractions such as historic houses and estates,

museums, zoos, safari parks, aquaria and

cinemas. It has over 20 years’ experience

delivering purpose-designed solutions for

clients’ ticketing, admissions, EPoS and food

and beverage sales requirements.

5

Our ServicesProviding joined-up solutions throughout the client lifecycle

Investment adviceRegardless of whether a

client is looking to improve,

develop, invest in, acquire

or dispose of a business or

asset, our companies

combine to provide support

throughout the client

lifecycle. Leveraging the

synergies that arise from


synergies that arise from

this collaboration within

and across companies

enhances both revenue

generation and profit

conversion.

6

Our Areas of ExpertiseWe focus on a section of areas covering a wide range of property-based businesses in Care, Leisure and

Retail

• Luxury hotels

• Mid-market

hotels

• Upscale Hotels

• Budget hotels

• Boutique hotels

• Aparthotels

• Guest houses

• Freehouses

• Tenanted pubs

• Managed

houses

• High street

bars

• Late night

venues

• Nightclubs

• Casual dining

• Fine dining

• Independents

• Sandwich bars

• Coffee shops

• Tea rooms

• Takeaways

• Cinemas

• Health &

fitness

• Sports clubs

• Bingo halls

• Ten pin

bowling

• Snooker clubs

• Elderly care

• Specialist care

• Private hospitals

• Education

• Childcare

• Nursing and

residential

• Supported living

• Supermarkets

• Convenience

stores

• PFS Forecourts

• CTNs

• Off licences

• Post Offices

• Fish & chip

• Pharmacies

• Dentists

• GP Surgeries

• Vets

• Opticians

Hotels CarePublic Houses Restaurants Leisure MedicalRetail


• Guest houses

• B&Bs

• Mid-market

hotels

• Hostels

• Nightclubs• Holiday parks

• Golf courses

• Gaming sector

• Supported living

• Funeral directors

• Independent

schools

• Fish & chip

shops

• Garden centres

• Newsagents

• Booksellers

• Warehouses

• Supply Chain

Premises

• Specialist shops

Estimated Market Sizes

UK

•48,000 pubs

•35,000 hotels

•20,000 restaurants

•24,000 care facilities

• 14,500 pharmacies

• 12,500 dental practices

• 8,500 filling stations

•100,000+ retail

Estimated Market Sizes

Europe

• Over 132,000 hotels(source Otus & Co)


Business Review & Outlook


8

2016 HeadlinesSecond half trading normalised after Brexit-suppressed first half in PBS division

• Revenue growth of 1.2% to £64.5m (2015: £63.7m)

• Operating profit before exceptional items of £1.0m (2015: £3.8m)

• £1.3m exceptional operating profit arising from indexation cap on final salary pensions

• Total operating profit for year of £2.3m (2015: £3.8m)

• Earnings per share of 5.35p per share (2015: 9.73p)


Earnings per share of 5.35p per share (2015: 9.73p)

• Proposed final dividend of 1.5p (2015: 1.5p) maintains full year dividend at 2.5p per share

• H2 operating profit before exceptionals of £1.9m, reversing £0.9m H1 operating loss

• PBS division recovered from challenging first half to record H2 £1.8m operating profit before

exceptionals - a return on H2 PBS revenues of 9.8%

• SISS division reduces operating losses from £1.0m in 2015 to £0.2m, with progress in

all three businesses

PBS Review of the YearH2 recovery encouraging following a first half and summer where M&A activity was lacking

• The lack of M&A activity significantly dented first half performance

• Despite this, we delivered agency activity across our trade sectors

• Star performer was Children’s Day Care sector, while we

saw strong performances from our Care and Medical teams

• Institutional investors are including income-generating business assets

in constructing sector-based portfolios

• Christie & Co has the experience, scale and capabilities to support

corporate investors in these aims


corporate investors in these aims

• Our Asia desk was successful in assisting sales in Europe to

Chinese buyers

• Private clients remain key and our ability to connect with first-time buyers

remains fundamental

• Our focus on better balancing our agency and advisory

continues, with valuation instructions increased by 12%

• Consultancy activities have been expanded into both the dental

and pharmacy sectors with briefs including “whole of market”

reviews

Average valuesSale prices continued to climb through 2016, with good UK assets presenting an attractive

investment proposition for would-be buyers


Average CommissionsAverage commission levels have followed the rise in business values, but flattened out in second half

which is arguably necessary if volumes are to pick up

Average Commisions

14

16

18

20

22

24

Va

lue

(£

'00

0)

Christie & Co UK Average Commission13 Week Average


0

2

4

6

8

10

12

14

Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16

Va

lue

(£

'00

0)

Period

UK Deal Volumes (“Gross Deals Agreed”)2016 saw transaction volumes remain very low, at below half that seen at the peak, particularly noting

the addition of new sectors; no evidence to us, however, of market sizes diminishing

Deal volumes

40

45

50

55

60

Christie & Co UK GDA13 Week average


0

5

10

15

20

25

30

35

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Units

2007-2017 1989-1996 1996-2001

PBS Review of the YearChristie Finance enters its 40th year with an increasing involvement in higher value loans

• Launch of Christie Finance Corporate is followed by securing a

number of mandates on sizeable lending projects

• Business now has an ability to serve diverse range of corporate clients,

with Private Equity source of business now complimenting its

more traditional strength in the private client arena

• Focus is on developing position as a premium ‘value-add’ advisory

service

• Average loan size up by 24%, following 80% rise in 2015

• We have developed shorter-term, unsecured lending products


• We have developed shorter-term, unsecured lending products

• Christie Finance wins ‘Commercial Mortgage Introducer of the

Year’ at the Business MoneyFacts Awards for the second successive

year

• A clean bill of health from our first FCA audit

• Christie Insurance has continued to do what it does best, providing

bespoke insurance packages which protect clients when they need it

• Opportunity for progression for Christie Insurance lies in

a higher penetration of referrals from within the Group

PBS Review of the YearPinders remains a recognised hub of expertise, with national coverage across a range of sectors

• Pinders continue to provide valuation and project management

services across a variety of sectors, with white-coat sectors

and Education of increasing prominence

• Their place in the cycle of the transaction process, makes them

a good bellwether for the market place

• The EU referendum led to fewer proposals coming to market in the

lead up to and the immediate aftermath of, the vote

•Nonetheless, average fees held up well and activity levels


•Nonetheless, average fees held up well and activity levels

have rebounded to much improved levels which has continued into

2017

• Lenders have become the dominant source of instructions,

although brokers remain an important factor

• 2016 was notable for the increasing reliance by clients

on Pinders’ experience and database of knowledge, which

saw increased demand for its expert-witness services to

establish historic business values under dispute

SISS Review of the YearVenners once again delivered solid growth in revenues, while evolving to meet a changing

PubCo landscape

• Venners continued to grow market share

• Regional sales were strong, winning new contracts with Punch,

Chapman Group and Enterprise Inns

• At the same time existing clients awarded Venners work

for further brands

• New Brand Reputation Offering – ensuring brand standards


• New Brand Reputation Offering – ensuring brand standards

are adhered to by franchisees - has been enthusiastically

received by both existing & aspiring franchisors

• Operational consultancy services continue to enhance

client profits, and have been utilised by clients including

Accor, Macdonald Hotels and Rezidor Hotels

• New client wins have included Tortilla, Black and White

Hospitality, Bravo Inns, Arena Racing Company and Cau Group

SISS Review of the Year2016 saw progress in building a firm foundation for sustained profitability, after a

challenging period in retail stocktaking

• Introduction of living wage saw our retail counters benefit from

higher pay which we passed on to clients

• Where price increases were not achieved, we instead obtained

increased work in order to offset the impact

• In Benelux and France we have secured sufficient assignments to

underpin profitability in the region for 2017

• There is sufficient opportunity for new business at good prices to


• There is sufficient opportunity for new business at good prices to

move our German operation into a similar position later in the year

• Supply Chain division is growing its “good faith receiving” audits

• In the ‘bricks and clicks’ retailing era, real-time supply chain control

is fundamental for operators

• A series of contract wins with retailers like Claire’s,

Carrefour and Pandora have confirmed the appeal

of our pan-European strategy

SISS Review of the YearVennersys is gaining momentum with launch of VenPos Enterprise

• Vennersys has achieved the goal of readying its SAAS model

for ‘go lives’ in 2017, including the migration of

existing clients such as Blenheim Palace (top right)

• VenPos Enterprise was launched in 2016 to cater for larger

operators, complimenting the SME-focused VenPos Cloud

• Completion of the existing clients migration process will free up

capacity to accommodate a growing new business pipeline


• New business successes have already included Bristol

Museum and Art Gallery (bottom right), Glenmorangie

Distillery, and PlayFactorE (middle)

• The product has multi-lingual capabilities and is internationally

scalable

• It is platform agnostic and is optimised for tablet, mobile and

desktop viewing

One solution, everything covered!

Financial Review

Dan PrickettChief Financial Officer

19

Revenue53%: 47% weighting towards H2 PBS revenues illustrates impact of Brexit, with 14% increase in H2 PBS

revenues v H1

2016 2015

Revenue (£'000) H1 H2 Total H1 H2 Total

Professional Business Services 16,387 18,646 35,033 17,522 18,743 36,265

46.8% 53.2% 100.0% 48.3% 51.7% 100.0%


Stock & Inventory Systems & Services 15,188 14,267 29,455 14,216 13,262 27,478

51.6% 48.4% 100.0% 51.7% 48.3% 100.0%

31,575 32,913 64,488 31,738 32,005 63,743

49.0% 51.0% 100.0% 49.8% 50.2% 100.0%

Revenue by SectorGroup remains reasonably evenly spread across the two divisions, and sector-spread provides a diversified

risk-spread and plenty of opportunity in newer-subsectors such as Children’s DayCare and Medical

201532%

201520%

Retail201633%

Care2016 22%

By Sector

2015

PBS 201654%

SISS201646%


32%

201548%

20%

Leisure201645%

201557%

201543%

Operating Profit By HalfH1 trading illustrated impact of Brexit, with activity levels returning to more normalised levels thereafter

500

1,000

1,500

2,000

2,500

3,000


* Operating profit per half before exceptional items

(1,000)

(500)

-

500

H1

2011

H2

2011

H1

2012

H2

2012

H1

2013

H2

2013

H1

2014

H2

2014

H1

2015

H2

2015

H1

2016

H2

2016

Period

Six monthly Operating Profit (£'000)

Employee NumbersFTE headcount increased slightly, reflecting long-term investment strategy and meaning the capacity

already exists to deliver growth in the PBS division

Actual number of people employed 2015 2016

Operational 3,323 2,820

Admin & support 259 268

3,582 3,088

Full time equivalents 2015 2016


• Reduction in actual number of people employed reflects reduced staff-turnover in

stocktaking businesses, which itself contributes to improved efficiencies and stronger operating

margins

Operational 902 935

Admin & support 259 262

1,161 1,197

Net debt levels at end of 2016 remained well within total available facilities, and with

operating model able to relatively swiftly convert profitability into cash

Cash

• Group ended the year with net debt of £3.9m (£0.7m) – a £3.2m cash outflow

• Total facility levels are significantly higher & we are operating well within these

• No term debt; entirely overdraft and working capital financing facilities

• 2.3m post-exceptional operating profit absorbed by:

> £0.9m pay down of previously-accrued incentive provisions

> £1.0m final salary deficit payments


> £1.0m final salary deficit payments

> £0.5m higher capex than depreciation

> £1.2m of trade receivables increase due to timing of revenues

> £0.65m dividends

> £1.3m of non-cash exceptional profit in reducing future

pension liabilities

• Normalised replacement capex should see capex and depreciation at similar levels

• Some development spend remaining in 2017 on VenPos Cloud product but the

majority of the core development of this has now been done

• Normal operating cash flow expectation should be operating profitability, adjusted for capex,

depreciation, tax, dividends and working capital movements


Outlook


25

OutlookWe are optimistic about the prospects for 2017, while recognising that some uncertainty remains

• 2017 has started much more strongly than 2016

• We entered 2017 with a strong pipeline across our businesses

• Activity levels returned to normal from the end of the summer of ‘16, and we are

now 7 months on with this normalised level of activity continuing

• Geopolitical uncertainty does remain which necessitates some caution, which

we expect to be more pronounced in mainland Europe than in our UK markets


we expect to be more pronounced in mainland Europe than in our UK markets

• We anticipate some inflationary pressures on our cost base, and we have planned

accordingly

• We plan continued growth in 2017, and the group has sufficient capacity

and operational gearing to deliver improved profit returns as a result

• The Board’s optimism & enthusiasm for 2017 is reflected in it maintaining the

dividend at the same level as 2015, at 2.5p per share (1.5p final dividend payable

in July)


Strictly Private & Confidential

27

2016 results presentation - christie group/media/files/c/christie... · 2018. 8. 1. · • garden...

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