Morgan Sindall Group plc · LSE:MGNS
Morgan Sindall — H1 2009 Earnings Presentation
44 slides from Morgan Sindall's earnings presentation, 2009
Slide 1: Half Year Results 2009
MORGAN i SINDALL Half Year Results 2009
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Slide 3: Overview – Highlights
Overview – Highlights Continued progress with strategy of developing market leading positions in our chosen sectors Half year results in line with expectations with profit before tax and amortisation at £23.9m (2008: £33.1m) Adjusted earnings per share of 42.6p (2008: 60.9p) Interim dividend maintai
Slide 4: Overview – Financial History
Overview – Financial History £m Revenue Profit before tax & amortisation 2,548 2.8% 2.9% 2,115 71.4 62.1 1,239 33.1 1,141 2.1% 655 25.2 23.9 836 15.4 175 3.0 1995* 2000* 2007 2008 2009 1995* 2000* 2007 2008 2009 * 1995 and 2000 figures on UK GAAP basis 4
Slide 5: Financials – Summary
Financials – Summary £m Six months to Six months to June 2009 June 2008 Revenue 1,141 1,239 -8% Profit before tax & amortisation 23.9 33.1 -28% Profit before tax 20.5 28.6 -28% Effective tax rate 29% 30% (%PBTA – pre JVs) Tax charge 5.9 7.5 -21% Profit after tax 14.6 21.1 -31% Adjusted EPS 42.6p 60.
Slide 6: Overview – Segmental Profit Analysis
Overview – Segmental Profit Analysis £m June June 2009 2008 Fit Out 7.4 11.5 -36% Construction 5.7 4.1 +39% Infrastructure Services 9.3 7.6 +22% Affordable Housing 7.1 8.8 -19% Urban Regeneration (1.1) 5.6 -£6.7m Investments (2.0) (0.8) -£1.2m 26.4 36.8 Group Activities (2.8) (6.0) +£3.2m Operating
Slide 7: Financials – Balance Sheet Year on Year Movement
Financials – Balance Sheet Year on Year Movement £m 250 47.0 9.6 17.8 4.0 1.5 195.8 200 4.5 6.9 7.3 176.8 150 100 Net assets Increase in Decrease in Increase in Increase in Change in Increase in Increase in Increase in Net assets at 30/06/08 fixed assets intangible investments working cash tax credi
Slide 8: Financials – Cashflow Six Months to June 2009
Financials – Cashflow Six Months to 30 June 2009 £m 175 10.8 53.1 150 20.2 125 120.3 8.7 3.9 1.6 12.7 100 88.7 75 50 Cash at Profit from Depn, amort Increase in Tax & net int Net capex & Net Dividends Cash at 31/12/08 operations & non cash net working received finance investment paid 30/06/09 adj ca
Slide 9: Overview – Corporate Structure
Overview – Corporate Structure Fit Fit Out Out UK’s UK’s leading leading office office fit fit out out business business comprising comprising Overbury, Overbury, Morgan Morgan Lovell Lovell and and Vivid Vivid Interiors Interiors.. Construction Construction National National construction constructi
Slide 10: Overview – Order Book Profile
Overview – Order Book Profile £m 2,500 Urban Regeneration pipeline Fit Out 2,000 Construction Infrastructure Services 1,500 Affordable Housing 1,000 500 0 2009 2010 2011 2012 2013 2014 2015 2016+ 10
Slide 11: Fit Out
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Slide 12: Fit Out – Market & Trading Highlights
Fit Out – Market & Trading Highlights Challenging market conditions following record second half of 2008 Smaller number of larger projects Completion of 350,000 sq ft fit out for major UK bank Robust demand from telecoms, technology and pharmaceutical sectors Fit Out responded decisively to dramatic
Slide 13: Fit Out – Financial History
Fit Out – Financial History £m Revenue Operating Profit 492 5.3% 5.4% 474 25.9 25.8 225 12.4 11.5 205 4.6% 160 7.4 2007 2008 2009 2007 2008 2009 13
Slide 14: Fit Out – Projects
Fit Out – Projects Client: Rio Tinto Project: 107,000 sq ft fit out over seven floors Contract value: £13 million Location: London Client: Stiefel Laboratories Project: Design and fit out of new HQ Contract value: £2 million Location: Berkshire Other Other key key projects: projects: GE GE Money Mon
Slide 15: Fit Out – Outlook & Prospects
Fit Out – Outlook & Prospects Tentative signs of improving market in the short term with delayed projects being retendered but some scaled back in scope (tender pipeline for larger projects; £220m of expected tenders in 2H09 compared with £74m actually tendered in 1H09) Continued focus on cost contr
Slide 16: Construction
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Slide 17: Construction – Market & Trading Highlights
Construction – Market & Trading Highlights Market remained reasonably robust supported by public sector spending Growing capability; ability to secure larger and more complex projects Revenues from frameworks healthy Important recent successes; Reading University, BAE Broughton, Tayside Acute Adult
Slide 18: Construction – Financial History
Construction – Financial History £m Revenue Operating Profit 1.3%* 813 9.5 621 1.2%* 1.5% 4.9 5.7 418 378 4.1 199 2.2 2007 2008 2009 2007 2008 2009 * After adjustment of one-off IT costs 18
Slide 19: Construction – Projects
Construction – Projects Client: Camden & Islington Community Solutions Project: Construction of new Polyclinic Contract value: £10 million Location: Kentish Town, London Client: University of York Project: Humanities and Educational Research Centre Contract value: £8 million Location: York Other Oth
Slide 20: Construction – Outlook & Prospects
Construction – Outlook & Prospects Market steady but caution regarding public spending Education market breadth provides some resilience; primary, secondary, tertiary and universities Looking to expand position in prisons, defence, rail and commercial sectors Continued focus on operational improveme
Slide 21: Infrastructure Services
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Slide 22: Infrastructure Services – Market & Trading Highlights
Infrastructure Services – Market & Trading Highlights Infrastructure market healthy; number of major infrastructure investments progressing Secured £250m Severn Trent AMP5 utilities framework (with further £250m extension for AMP6) Formed JV teams for CrossRail and Second Forth Road Crossing Record
Slide 23: Infrastructure Services – Financial History
Infrastructure Services – Financial History £m Revenue Operating Profit 799 2.0%* 14.4 575 2.1%* 10.6 2.2% 9.3 419 7.6 395 220 4.0 2007 2008 2009 2007 2008 2009 * After adjustment of one-off IT costs 23
Slide 24: Infrastructure Services – Projects
Infrastructure Services – Projects Client: Westfield Shopping Towns Ltd Project: Stratford City Developments Contract value: £56 million Location: Stratford, London Client: Transport Scotland Project: Eight kilometre extension to the M74 Contract value: £445 million in JV Location: Glasgow Other Oth
Slide 25: Infrastructure Services – Outlook & Prospects
Infrastructure Services – Outlook & Prospects Market outlook positive with significant number of major infrastructure projects being procured High volume of bidding activity Focus on energy, water, and rail & air transport sectors Order book at £1.4bn (2008: £1.8bn); expected to grow over second hal
Slide 26: Affordable Housing
Aisne LOVELL MORGAN | SINDALL 2
Slide 27: Affordable Housing – Market & Trading Highlights
Affordable Housing – Market & Trading Highlights Refurbishment and social housing markets remain healthy: key government priority Open market housing reservations improving, but outlook remains subdued (now <10% of divisional revenue) Launch of responsive maintenance business Lovell Respond to compl
Slide 28: Affordable Housing – Financial History
Affordable Housing – Financial History £m Revenue Operating Profit 398 6.4% 377 25.5 5.6% 21.0 192 178 176 11.5 4.0% 8.8 7.1 2007 2008 2009 2007 2008 2009 28
Slide 29: Affordable Housing – Projects
Affordable Housing – Projects Client: South Liverpool Housing, Liverpool Housing Trust and Liverpool City Council Project: 320-home development Contract value: £38 million Location: Garston under the Bridge, Liverpool Client: Thames Valley Housing/Royal Borough of Windsor & Maidenhead Project: Devel
Slide 30: Affordable Housing – Outlook & Prospects
Affordable Housing – Outlook & Prospects Sector remains Government priority with additional funding from HCA Refurbishment and new build social housing opportunities remain robust Caution over pace of recovery of open market Next round of social housing PFIs announced, provides significant opportuni
Slide 31: Urban Regeneration
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Slide 32: Urban Regeneration – Market & Trading Highlights
Urban Regeneration – Market & Trading Highlights Market conditions remain challenging Secured Blackpool (£220m) and Doncaster (£300m) regeneration developments No major asset sales in first half Small interim operating loss of £1.1m (2008: £5.6m profit), on revenue of £5m (2008: £45m) 32
Slide 33: Urban Regeneration – Projects
Urban Regeneration – Projects Artist’s impression Partner: Doncaster Borough Council Project: 22 acre new civic and cultural quarter Contract value: £300 million Location: Doncaster Partners: Plymouth City Council, SWERDA and the Homes & Communites Agency Project: Creation of a new waterfront commun
Slide 34: Urban Regeneration – Outlook & Prospects
Urban Regeneration – Outlook & Prospects Market will remain subdued into 2010 Focus on public sector opportunities Resilient model Phased development Income streams from fees, land trading and property sales No exposure to land write-downs Well positioned to exploit regeneration opportunities when m
Slide 35: Investments
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Slide 36: Investments – Strategy
Investments – Strategy Primary purpose to gain access to construction activity for the Group; BSF, social housing PFIs, NHS LIFT Investment-led construction Target sectors that match our competitive strengths Develop income from an investment portfolio Complements profits from construction activitie
Slide 37: Investments – Overview
Investments – Overview Sector Project Capital MS equity/ Equity value £m loan stock % Health Barnsley LIFT 27 0.5 30% Camden & Islington LIFT 40 0.5 30% Doncaster LIFT 36 1.0 30% Solent LIFT 29 0.3 15% Bury Thameside & Glossop LIFT 36 1.1 30% Plymouth LIFT - 0.1 9.3% PMP portfolio 74 - 50% Emergency
Slide 38: Investments – Market & Trading Highlights
Investments – Market & Trading Highlights Presented as business segment for first time Financial close achieved at Wigan Life Centre (PFI) Appointed preferred bidder on Tayside Mental Health 2009 2008 £m £m Operating cost (2.0) (1.4) Income from JVs - 0.6 Net result (2.0) (0.8) 38
Slide 39: Investments – Projects
Investments – Projects Artist’s impression Partner: Dorset Emergency Services Partnership Initiative (DESPI) Project: Design, build, finance and operate a number of new fire and emergency services facilities Contract value: £46 million Location: Dorset Partners: Wigan Council (Access Consortium) Pro
Slide 40: Investments – Outlook & Prospects
Investments – Outlook & Prospects Preferred bidder Value Wickford Town Centre Development £160m Tayside Acute Adult Mental Health £100m NHS LIFT further phases £44m Basildon Sporting Village £36m Shortlisted Hull BSF North Tyneside Homes for the Future Other opportunities Building Schools for the Fu
Slide 41: Summary – Outlook & Prospects
Summary – Outlook & Prospects Continued success of strategy in developing market leading positions in our chosen sectors Market challenging and will remain so for foreseeable future Group is financially strong, with improving average cash in second half Market will present opportunities Expect to em
Slide 42: Notes
Notes SS SESE _——— MORGAN |SINDALL «
Slide 43: Notes
Notes SS SESE _——— MORGAN SINDALL «s
Slide 44: Half Year Results 2009
MORGAN i SINDALL Half Year Results 2009