presentation final results to carillion for the year...
TRANSCRIPT
Presentation
to Carillion
The Equipment Rental Specialists
9th June 2010
The Equipment Rental Specialists
Vp plc
Final Results
for the year ended
31 March 2014
Agenda 1
● Results Summary
● Operational Review
● Financial Review
Agenda
2 Results summary
2014 2013
Profit before tax and amortisation £20.1m £17.4m +16%
Revenue £183.1m £167.0m +10%
Earnings per share pre amortisation 42.0p 35.5p +18%
Total dividend per share 14.0p 12.25p +14%
Return on average capital employed 13.5% 13.3%
Agenda
3 Highlights
● Excellent profits – 16% up on prior year, ahead of market expectation
● Strong final quarter
● Delivering growth – revenues up 10%
● Return on average capital employed improved to 13.5%
● Strong cash generation – EBITDA £44.3m
● Growing investment in rental fleet – £38.2m
● Acquisition of Mr Cropper £4.6m – September 2013
● Most markets supportive, UK construction modest improvement
Agenda
4 Revenue and profit profile
Revenue (£m)
Profit before tax and amortisation (£m)
Revenues growing Progressive profit trend
129.5 138.1
161.5 167.0
183.1
0
20
40
60
80
100
120
140
160
180
200
2010 2011 2012 2013 2014
16.0
13.8
16.0 17.4
20.1
0
5
10
15
20
25
2010 2011 2012 2013 2014
Agenda
5 Operational review
Agenda
6 Markets – all key markets delivering growth
Market Segments
Infrastructure
Construction
Oil & Gas
Housebuilding
Other
Market Segments
Growth/
Market 2014 2013 Decline
segment £m £m on prior year
Infrastructure* 86.0 78.2 +10%
Construction 44.0 38.1 +15%
Oil & Gas 21.1 20.2 +4%
Housebuilding 18.7 16.4 +14%
Other 13.3 14.1 -6%
Total 183.1 167.0 +10%
*Utilities, Rail, Transmission and Facilities Management
Revenue
47%
24%
12%
10%
7%
Agenda
7
● Diverse market exposure continues to deliver results
● Housebuild, infrastructure, water and transmission – positive
● Oil and gas – stronger H2, much improved outlook
● European markets progressing, particularly TPA
● Strong cash flows supporting investment for growth
● Fleet investment increased 70%
● Mr Cropper acquisition integrated well
● Return on Capital continues to guide investment decisions
Divisional overview
8 Business performance
2014 2013 2014 2013
£m £m £m £m
UK Forks 16.3 14.1 2.5 2.1 Housebuild and construction demand
Groundforce 42.3 37.2 7.9 7.8 Another strong, high quality result
Airpac Bukom 20.2 17.4 2.0 2.0 Stronger 2nd half, improving outlook
Hire Station 66.2 62.0 4.8 4.3 Markets improving
TPA 15.8 14.9 1.8 1.3 Progress in UK and Germany
Torrent Trackside 22.3 21.4 2.8 2.2 Busy rail sector
TOTAL 183.1 167.0 +10% 21.8 19.8 +10%
Operating Margin 11.9% 11.9% Margin maintained
Revenues PBITA
Agenda
9 Capital investment in fleet
2014 2013
£m £m
UK Forks 7.0 0.4 Fleet growth to meet increased demand
Groundforce 8.0 7.3 Investment in UK and Europe
Airpac Bukom 5.8 2.1 Investment for new financial year
Hire Station 13.4 9.4 Growth opportunity, product availability
TPA 1.0 2.4 Replacement expenditure
Torrent Trackside 3.0 0.9 Fleet refreshment and growth
Total fleet capex 38.2 22.5
Disposal proceeds (8.6) (9.6)
Net expenditure 29.6 12.9
Agenda
10 Operational outlook
● Strong final quarter has created excellent business momentum into the
new financial year
● All markets positive, but expect further improvement in general
construction and oil and gas
● Business development is targeted both in UK and overseas markets
● Consistency of quality in products, services and people increasingly
valued by customers
● Group well positioned for further growth
Agenda
11 Financial review
Agenda
12 Financial highlights – excellent performance
2014 2013
Revenue £183.1m £167.0m +10%
EBITDA £44.3m £41.0m +8%
EBITA £21.8m £19.8m +10%
Profit before tax and amortisation £20.1m £17.4m +16%
Net margin 11.0% 10.4%
ROACE 13.5% 13.3%
13 Earnings per share – 18% increase
2014 2013
Basic EPS 39.8p 33.6p +18%
Basic EPS (pre amortisation) 42.0p 35.5p +18%
Profit before tax and amortisation £20.1m £17.4m +16%
Weighted average number shares 39.5m 38.8m
Effective tax rate 17.1% 20.4%
Agenda
14 Full year dividend per share – 14% increase
Dividend per share (pence)
10.5 10.8 10.8 10.8 11.35
12.25
0
2
4
6
8
10
12
14
16
2008 2009 2010 2011 2012 2013 2014
14.0
2014 2013
EPS pre amortisation 42.0p 35.5p +18%
Full year dividend per share 14.0p 12.25p +14%
Dividend cover 3.0x 2.9x
Ave
rag
e C
ap
ita
l E
mp
loye
d £
m
RO
AC
E
Significant investing activity, ROACE further improved
149.9
140.2
133.8
142.6
148.5
161.2
17.0%
13.3%
12.3% 13.0%
13.3% 13.5%
5%
7%
9%
11%
13%
15%
17%
120
130
140
150
160
170
180
2009 2010 2011 2012 2013 2014
15
Average Capital Employed
£m
ROACE
2014 2013
£m £m
Rental equipment (fleet) 112.9 99.1
Other assets 53.3 50.7
Net working capital (1.3) 2.6
Deferred tax/pension (3.9) (6.2)
Capital employed 161.0 146.2
Net debt (53.0) (45.3)
Net assets 108.0 100.9
Gearing 49% 45%
Debtor days year end 57 57
Bad debt write off as % turnover 0.6% 0.7%
16 Strong balance sheet
90% fleet
Tax rate
Maintained
Modest increase
17 Financial performance - strong cash generation 17
Other
£5.8m
Cash inflows
Cash outflows
EBITDA : £44.3m
Increase in net debt
£7.7m
Net capex £30.9mAcquisition
£4.5m
Tax / Interest
£5.8m
Dividends
£5.0m
18 Bank facilities
31 March 31 May
2014 2013
£m £m
Revolving credit
Facility A to May 2016 35.0 35.0
Facility B to Oct 2017 30.0 30.0
65.0 65.0
Overdraft facility 5.0 5.0
Total facilities 70.0 70.0
Step up facility C 25.0 25.0
Net debt 53.0 45.3
Headroom against facilities 17.0 24.7
Agenda Headroom for growth
7.10 6.10
7.30 8.00
12.30
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
FY 10 FY 11 FY 12 FY 13 FY 14
EBITA
Interest
Cover
1.29 1.16 1.05 1.10 1.20
0.00
0.50
1.00
1.50
2.00
2.50
3.00
FY 10 FY 11 FY 12 FY 13 FY 14
Net Debt /
EBITDA
Less than 2.5 times
Greater than 3 times
19
Agenda
20 Supplementary schedules
2014 2013
£m £m
Operating profits 21.8 19.8
Depreciation 22.5 21.2
EBITDA 44.3 41.0
Changes in working capital 3.9 0.1
Gross capex (39.5) (29.6)
Proceeds from disposals 8.6 9.6
Profit on asset disposals (2.9) (2.6)
Interest (1.8) (2.5)
Tax (3.9) (3.8)
Dividends (5.0) (4.4)
Acquisitions (4.5) (4.1)
Other (purchasing of own shares) (6.9) (8.6)
Cash movement (change in net debt) (7.7) (4.9)
Agenda
21 Cash flow
Growth in
EBITDA
Small increase
in debt
Increased
capex
Agenda
22 Effective rate of tax
Mar 2014 Mar 2013
% %
Standard rate 23.0 24.0
Impact of tax rate change (5.7) (2.2)
Permanent disallowables 0.8 0.3
Chattels (1.0) (1.5)
Prior year adjustments (0.6) (1.2)
Non qualifying depreciation 0.6 0.8
Overseas tax rate - 0.2
Effective rate 17.1 20.4
Agenda
23 Net working capital
2014 2013
£m £m
Inventories 5.3 5.7
Trade debtors 33.4 29.1
Prepayments and other debtors 5.0 4.1
Current assets 43.7 38.9
Trade creditors (15.6) (13.3)
Accruals, other creditors and tax (29.4) (23.0)
Net working capital (1.3) 2.6
24 Group history – 1954 to date
Turnover 1970: £2m 1980: £14m 1990: £70m 2000: £55m 2010: £129m 2013: £167m 2014: £183m
2014 Vp plc
Celebrates its
60th Anniversary
1954Vibratory Roller & Plant Hire
(Northern) Limited founded
1973Floated on main market
Vibroplant plc
1980Shoring division
established
1982US powered access
business established
1996Tool Hire:
Cannon Tool Hireacquired in 1996
2001Hire Station formed
through merger of5 regional tool
businesses
2002-2004Shoring expansion
through acquisitionof Mechplant,
Trenchshore &Eve Shorco
2006Acquisition of Bukom
Oilfield Services(Airpac Bukom formed)
1975First move into
specialistplant - Airpac
1990Groundforce
acquired fromSGB
1996Exit from USA;
UK specialist businessesexpanded
1997Rail: Torrent
Trackside acquired
2000UK Forks
divisioncreated
2001Renamed Vp plc
2005TPA and
ESSacquired
2007 - 2009Continuing growth in
specialist areas viaacquisitions of MEP and
U Mole
2010Geographical expansion:
Global (Airpac Bukom).Eire (Groundforce),
Germany (TPA)
1954
19731980 1990
2006
2011Mainland Europe -
Groundforce
2014
Agenda
25 TPA
Europe’s market leader in portable roadways:
• Operations in UK, Republic of Ireland and Germany
• Skilled installation of bespoke roadways and walkways
Markets:
• Transmission, construction, rail and outdoor events
Opportunities:
• Regulated transmission programme, new products and
European growth
Agenda 26 UK Forks
National hire of telescopic handlers/rough terrain forklifts:
• Only UK national telehandler specialist
• Fleet of c.1335 machines
• Strategically located distribution network
Markets:
• General construction, housebuild and industry
Opportunities:
• Housebuilding, construction recovery and market share growth
Agenda 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, electrofusion and low level access
Markets:
• Construction, industry, civil engineering, housebuild, DIY
Opportunities:
• Specialist products, construction recovery and market share growth
27
Agenda Groundforce
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 & Mr Cropper – piling equipment
° Stopper Specialists – pipeline pressure testing
° Shorflo – pumps
° ‘U’ Mole – trenchless technology
Markets:
• Civil engineering (including regulated AMP
programme), construction and housebuilding
Opportunities:
• Infrastructure, European growth and construction recovery
28
Agenda 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 renewals projects on national rail
network, London Underground and Network Rail
maintenance contract
Opportunities:
• CP5, Crossrail, maintenance
29
Agenda
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, rig maintenance, gas transfer, LNG
Opportunities:
• Well test market, LNG, new products and growth in under
represented geographic regions
Airpac Bukom 30