Mears Group Plc · LSE:MER
Mears — H1 2006 Earnings Presentation
19 slides from Mears's earnings presentation, September 2006
Slide 1: Results for the six months to 30th June 2006
Results for the six months to 30th June 2006 Bob Holt Chairman Stuart Black Chief Executive David Robertson Finance Director
Slide 2: Today's presentation
Page 1 Today’s presentation Highlights Financial performance Order book and pipeline Market overview Community and strategy Outlook IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 3: Highlights of the first half
Page 2 Highlights of the first half Strong growth continues 22.5% organic revenue increase Substantial new contract wins £170m from 10 customers Strategic Scottish presence Laidlaw Scott acquisition Continued good cash conversion 102% of operating profit Record forward order book
Slide 4: Financial performance
Page 3 Financial performance Turnover £118.0m up 22.5% Profit before tax £5.3m up 23.4% Diluted earnings per share 6.17p up 24.6% Dividend per share 0.9p up 28.6% IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 5: Segmental analysis
Page 4 Segmental analysis £’000 Turnover Op. profit * Op. margin % 2006 2005 2006 2005 2006 2005 Social housing 88,027 68,394 4,903 3,910 5.6 5.7 Mechanical & electrical 25,982 23,470 523 462 2.0 2.0 Vehicle collection 3,989 4,431 167 184 4.2 4.2 Totals 117,998 96,295 5,593 4,556 4.7 4.7 * Stated pr
Slide 6: Operating cash flow
Page 5 Operating cash flow £’000 2006 2005 Operating profit 5,323 4,321 Share-based payments 270 235 Depreciation 720 659 Stock / WIP (535) (2,717) Debtors (3,371) (3,872) Creditors 3,015 6,334 Operating cash flow 5,422 4,960 102% of operating profit converted into operating cash flow ( 2005: 115%)
Slide 7: Cash flow
Page 6 Cash flow £’000 2006 2005 Opening cash balance 6,942 2,818 Operating cash flow 5,422 4,960 Interest received 13 5 Tax (1,523) (875) Capital expenditure (622) (1,850) Free cash flow 3,290 2,240 Acquisitions (2,220) (520) Financing 250 (35) Net movement 1,320 1,685 Closing cash balance 8,262 4,
Slide 8: Balance sheet
Page 7 Balance sheet £’000 2006 2005 Assets – non current: intangible 14,610 11,069 tangible 5,941 5,593 deferred tax 3,300 2,835 Stock/WIP 8,588 7,345 Debtors 33,783 34,331 Bank 8,262 4,503 Current liabilities (40,200) (40,929) Net current assets 10,433 5,250 Long term provisions (3,280) (1,713) Ne
Slide 9: Free cash flow and % conversion
Page 8 Free cash flow and % conversion IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 10: Contract wins
Page 9 Contract wins RM DH Ealing Homes 4 years √ GM Procure4 years √ Maidstone Housing Trust 5 years √ Cross Keys Homes (2) 5/7 years √ Twynham HA 2 years √ Town & Country HA 5 years √ Orbit Homes 5 years √ Total contracts £170m RM - Response Maintenance DH - Decent Homes IMPROVING HO
Slide 11: Order book
Page 10 Order book Possible extensions of £170m on 16 contracts IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 12: Opportunity pipeline
Page 11 Opportunity pipeline Current bid pipeline No. Value - Awaiting decision 10 £ 124m - Currently being prepared 6 £ 133m - Tenders due 7 £ 306m Bid pipeline £ 563m Current prequal pipeline - Awaiting decision 31 £ 630m - Currently being prepared 5 £ 180m - Prequals due 8 £ 112m Prequal pipeline
Slide 13: High visibility of planned revenue
Page 12 High visibility of planned revenue Market consensus forecast 2007 £295m 2008 £325m IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 14: Our market - forecasts
Page 13 Our market - forecasts IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 15: Market overview
Page 14 Market overview Housing Policy moved from ODPM to DCLG Housing and Regeneration review Decent Communities - the third sector CIH, LGA, NHF and Shelter - joint submission for 2007 spending review Audit Commission working up resident inspection proposal Stronger linkage of repairs
Slide 16: Community affairs
Page 15 Community affairs 140 projects and 10,000 volunteer hours IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 17: Community affairs - the core of our strategy
Page 16 Community affairs - the core of our strategy IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.
Slide 18: Recent developments
Page 17 Recent developments Laidlaw Scott acquisition Contract mobilisation Reorganisation of our social housing business IIP accreditation achieved External recognition - 8 awards secured Raising customer service standards – NVQ programme Decent communities strategy review IMPROVING H
Slide 19: Outlook
Page 18 Outlook Excellent platform for future growth Record order book maintaining high visibility of earnings Well positioned for Decent Communities agenda Exceptional market opportunity Continued confidence in future prospects IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES.