Babcock International Group PLC · LSE:BAB
Babcock International — H1 2005/06 Earnings Presentation
18 slides from Babcock International's earnings presentation, November 2005
Slide 1: Babcock International Group PLC Interim Results to 30 September 2005
Babcock International Group PLC INTERIM RESULTS TO 30 SEPTEMBER 2005 Peter Rogers Bill Tame
Slide 2: Business Highlights
Business Highlights • Sales and profits continue double-digit growth • Significant contract wins in Defence and Rail • Order book at £2 billion • Cash conversion again excellent – net debt at £52.3 million • First half margins maintained above 6% • Interim Dividend raised by 30%
Slide 3: Financial Review
Financial Review Bill Tame
Slide 4: Group Operating Result 6 months to 30 September
Group Operating Result 6 months to 30 September FY £ million 2005 2004 % change 2004/05 Turnover - Continuing operations 398.9 332.8 20 745.3 Operating Profit - Continuing operations 25.2 20.9 21 42.1 Joint ventures & associates - 0.2 0.2 Interest (3.4) (2.4) (6.0) Profit before Tax* 21.8 18.7 17 36
Slide 5: Divisional Performance 6 months to 30 September
Divisional Performance 6 months to 30 September Turnover Operating profit* FY FY £ million 2005 2004 % change 2004/5 2005 2004 % change 2004/5 Defence Services 121.9 107.5 13 245.1 8.9 7.7 16 16.8 Technical Services 65.7 81.7 (20) 159.0 5.3 7.5 (29) 14.3 Engineering & Plant 68.3 52.5 30 112.7 4.0 2.
Slide 6: Divisional Performance 6 months to 30 September
Divisional Performance 6 months to 30 September Turnover Return on Sales* FY FY £ million 2005 2004 2004/5 2005 2004 2004/5 Defence Services 121.9 107.5 245.1 7.3% 7.2% 6.9% Technical Services 65.7 81.7 159.0 8.1% 9.2% 9.0% Engineering & Plant 68.3 52.5 112.7 5.9% 4.6% 4.3% Networks 48.9 28.7 61.5 1
Slide 7: Tax, EPS & Dividend 6 months to 30 September
Tax, EPS & Dividend 6 months to 30 September FY £ million 2005 2004 % change 2004/05 Continuing profit before tax* 21.8 18.7 17 36.3 Acquired intangibles amortisation (1.6) (1.6) (4.4) Exceptionals - (5.9) (1.8) Profit before Tax 20.2 11.2 80 30.1 Tax (4.7) (2.8) (8.3) Profit from the year from cont
Slide 8: Group Operating Cash Flow 6 months to 30 September
Group Operating Cash Flow 6 months to 30 September FY £ million 2005 2004 2004/5 Operating profit* 22.6 12.8 34.6 Non-cash items 5.7 20.2 28.2 Increase in working capital and provisions (4.5) (7.8) (19.3) Net capital expenditure / other (4.8) 0.6 (1.9) Operating cash flow 19.0 25.8 41.6 Operating ca
Slide 9: Group Net Cash Flow 6 months to 30 September
Group Net Cash Flow 6 months to 30 September FY £ million 2005 2004 2004/5 Operating cash flow 19.0 25.8 41.6 Acquisitions and disposals 1.1 (24.9) (24.7) Interest (3.5) (2.1) (5.9) Tax (1.4) (2.5) (4.8) Dividends (5.4) (4.3) (7.0) Financing / acquired borrowings / other 0.8 (47.7) (46.7) Net cash f
Slide 10: Group Balance Sheet 6 months as at 30 September
Group Balance Sheet 6 months as at 30 September FY £ million 2005 2004 2004/5 Equipment, Tangible Assets 36.1 36.9 36.0 Goodwill, Intangible Assets, Investments 179.2 183.4 176.8 Fixed Assets 215.3 220.3 212.8 Working capital* 0.9 (12.5) (0.1) Pension pre-tax 9.7 (29.9) (20.3) Taxation (5.6) 9.9 5.9
Slide 11: Operations Review: Defence Services
Operations Review Defence Services Turnover (£m) Operating Profit (£m)* 2005 2004 2005 2004 121.9 107.5 8.9 7.7 • Regional Prime Contract East secured in jv with Dyncorp • Contract extension for HMNB Clyde awarded • Bid for Defence Training Review submitted yesterday • Date for Main Gate now set for
Slide 12: Operations Review: Technical Services
Operations Review Technical Services Turnover (£m) Operating Profit (£m)* 2005 2004 2005 2004 65.7 87.7 5.3 7.5 • Decline in turnover as predicted • Busy second half in refit with Ark Royal and Fort Rosalie • Awaiting results of Maritime Industrial Strategy • In CVF alliance * Before acquired intang
Slide 13: Operations Review: Engineering & Plant Services
Operations Review Engineering & Plant Services Turnover (£m) Operating Profit (£m)* 2005 2004 2005 2004 68.3 52.5 4.0 2.4 • Sales growth of 30% • Construction equipment market remains strong – parts sales growing • Margins improving • Eskom planning greatly increased spend • Proposal submitted to Ai
Slide 14: Operations Review: Networks
Operations Review Networks Turnover (£m) Operating Profit (£m)* 2005 2004 2005 2004 48.9 28.7 5.3 2.8 • 3G roll out continuing at good pace • National Grid Transco activity increasing • Launch of CARE system well received • First signs of mobile operators outsourcing network care • Trakway solid but
Slide 15: Operations Review: Rail
Operations Review Rail Turnover (£m) Operating Profit (£m)* 2005 2004 2005 2004 94.1 62.4 4.2 3.2 • Award of High Output 3 a major success. Babcock now has 2 out of 3 • Signalling now starting to be busy – will last throughout year • Work started on Alloa Kincardine link • Overhead reduction/propert
Slide 16: Major Bid Activity
Major Bid Activity Status - RSME Main Gate March 2006 - DTR Bid submission Nov 14 - Central Prime Lost - Eastern Prime Won - Libya Power Won – 2 contracts - Marine Services BAFO – Award early 2006 - HMNB Clyde Extension Awarded - High Output Rail Won - Mondi Won - Korea Chemical Won - USAF Flying Tr
Slide 17: Summary and Prospects
SUMMARY AND PROSPECTS • First half of year has fully met our expectations. • Continuing growth in both sales and profits is highly satisfactory. • We continue to look for new opportunities where our skills would be appropriately valued. • We are confident that we are well placed to remain a major fo
Slide 18: Appendix 1: Pensions – Main Defined Benefit Schemes
Appendix 1 Pensions – Main Defined Benefit Schemes £ million 2005 2004 Income Statement Service Cost (6.9) (6.0) Finance Cost (26.0) (23.0) Expected return on assets 31.0 27.1 Charge to Operating Profit (1.9) (1.9) Balance Sheet – pre tax Opening Balance (20.3) 2.0 Income Statement (1.9) (1.9) Acqui
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