Science Group Plc · LSE:SAG
Science — FY2016 Earnings Presentation
17 slides from Science's earnings presentation, 2017
Slide 1: Presentation title with white logo
Presentation title with white logo Subtitle if required Name, position, date 1
Slide 2: Science Group plc
Science Group plc Science and technology services • Science-based Consultancy and Advisory Services • Technology & Product Development Four subsidiary companies/brands • Sagentia – founded 1986, provides services to medical and commercial markets • OTM Consulting – acq July 2013, provides services t
Slide 3: Financial Summary
Financial Summary Group revenue of £36.9m (2015: £31.2m) Adjusted* operating profit of £6.2m (2015: £5.3m) Statutory PBT of £3.0m (2015: £2.4m) Adjusted* basic EPS increased by 11% to 11.4 pence (2015: 10.3 pence) • Basic EPS of 6.8 pence (2015: 7.2 pence) and diluted EPS of 6.6 pence (2015: 6.8 pen
Slide 4: Services Revenue Profile
Services Revenue Profile • Science Group comprises five operating businesses • Four distinct brands under Science Group umbrella brand Market Overview • Medical: Slow first half with strong second half sales performance resulting in good order book entering 2017 Leatherhead Sagentia Medical • Commer
Slide 5: Group Revenue Breakdown
Group Revenue Breakdown 40 35 30 25 Revenue (£m) Non Core: Property 20 income Other Core business revenue 15 Core business: Services revenue 10 5 0 2010 2011 2012 2013 2014 2015 2016 5
Slide 6: International Services Business
International Services Business • Science Group is an international science services business • 70% of Core Business revenue derived from outside UK • 35% of Core Business revenue invoiced in USD (2015: 52%) and 11% in EUR (2015: 8%) • Over 90% of employees are based in the UK 100% 100% 90% 90% 80%
Slide 7: Adjusted Operating Profit
Adjusted Operating Profit • Oakland contribution strong • Leatherhead contribution ahead of integration plan • OTM business impacted by challenging Oil and Gas market • Sagentia aggregate contribution declined slightly 7 28% 6 24% Adjusted operating profit margin (%) Adjusted operating profit (£m) A
Slide 8: Adjusted Earnings per Share
Adjusted Earnings per Share • Increase of 11% in adjusted basic EPS to 11.4 pence (2015: 10.3 pence) • Basic and diluted measures converging following the reduction in share options 7 14p 6 12p Adjusted operating profit (£m) Adjusted 5 10p operating profit Adjusted EPS (pence) Adjusted EPS (basic) 4
Slide 9: Net Funds + Freehold Property per Share
Net Funds + Freehold Property per Share • Science Group has a strong asset base comprising significant cash resources and freehold property assets • 26% increase in “Net Funds + Freehold Property” per share to 84.5 pence (2015: 67.3 pence) 90 Net funds + freehold property per share (pence) 80 70 Net
Slide 10: Tax
Tax Effective tax rate in 2016 is a tax charge of 7.4% (2015: tax credit of 15.1%). Tax charge in P&L of £0.2m in 2016 (2015: tax credit of £0.4m) includes • £0.7m R&D tax credit relating to 2015 and 2016 under R&D tax regime which is expected to result in tax cash inflow of £0.7m in 2017 (2015: £0.
Slide 11: Appendix: Annual Review of Capital Sources & Allocation
Appendix Annual Review of Capital Sources & Allocation 11
Slide 12: Capital Sources 2010-2016
Capital Sources 2010-2016 • Debt funding in 2010, 2013 and 2016 • Secured against Harston and Epsom freehold properties • Limited operating covenants due to asset security – reducing risk of debt capital to equity • Strong operating cash flow has been primary capital source • Operating cash flow in
Slide 13: Capital Allocation 2010-2016
Capital Allocation 2010-2016 • Equity buy-backs undertaken when appropriate • Rationalisation of share options included in equity buy-back in 2016 • Maiden dividend paid in 2013 and increased significantly from 2015 • Capital deployed in acquisitions and second freehold property in 2015 18 16 14 12
Slide 14: Cash & Debt 2009-2016
Cash & Debt 2009-2016 • Capital resources deployed for acquisitions (business and related property) in 2015 • Net funds increased in 2016 due to improvement in working capital • Strong balance sheet maintained with significant free cash resources • Debt refinanced in 2016 to 10 year term, secured on
Slide 15: Equity Share Capital
Equity Share Capital • Following refinancing in 2010, issued share capital has gradually decreased • Share options and acquisition-related equity have been offset by share buy-backs • 2016 share options rationalisation reduced outstanding options to 1.7m 60 50 27% 34% 40 Outstanding Share Chairman O
Slide 16: New 10 Year Bank Facility
New 10 Year Bank Facility Existing loan facility was scheduled to expire in 2018 • 5 year loan restricted length of investment horizon Successful bank facility negotiation concluded in September 2016 • 10 year, £15m loan, repayment profile of £1m per year and remainder (£5m) on expiry of loan • Secu
Slide 17: www.sciencegroup.com
www.sciencegroup.com Head office Epsom London Harston Mill Great Burgh 48-49 St James's Street Harston, Cambridge Yew Tree Bottom Road London CB22 7GG Epsom SW1A 1JT UK Surrey UK KT18 5XS Phone: +44 1223 875200 Phone: +44 1372 376761 Phone: +44 207 014 3250 [email protected] [email protected]