Science Group Plc · LSE:SAG
Science — FY2015 Earnings Presentation
18 slides from Science's earnings presentation, Mar 3, 2016
Slide 1: 2015 Preliminary Results
2015 Preliminary Results March 2016 Martyn Ratcliffe Chairman Rebecca Hemsted Finance Director To be read in conjunction with the audited preliminary results announcement released on 3 March 2016 1 Science Group plc
Slide 2: Science Group plc
Science Group plc Science Group plc is a Holding Company and Umbrella Brand • Name changed from Sagentia Group plc in July 2015 Science and technology services • Science-based Consultancy and Advisory Services • Technology & Product Development Four subsidiary companies/brands • Sagentia – founded 1
Slide 3: Financial Summary - 1
Financial Summary - 1 Satisfactory operating performance. Significant strategic development • Acquisitions of Leatherhead Research (Sept 2015) and Oakland Innovation (Feb 2015) • Acquisition of freehold property near Epsom Group revenue of £31.2m (2014: £28.3m) • Acquisitions generated revenue of £5
Slide 4: Financial Summary - 2
Financial Summary - 2 Basic EPS of 7.2 pence (2014: 8.9 pence) and diluted EPS of 6.8 pence (2014: 8.1 pence) • Complex tax movements (see attached slide) • Non-recurring and other exceptional items Proposed dividend maintained at 4.0 pence per share (2014: 4.0 pence) Cash balance of £14.5m (2014: £
Slide 5: Tax
Tax Effective tax rate in 2015 is a tax credit of 14.8% (2014: tax charge of 18.2%). Tax credit in P&L of £0.4m in 2015 due to one-off items (2014: tax charge of £0.8m) • £0.8m R&D tax credit relating to 2013 and 2014 under new R&D tax regime which will result in tax cash inflow of £0.8m in 2016 • £
Slide 6: Group Revenue Breakdown
Group Revenue Breakdown • Continuing business declined slightly • Impacted by oil & gas market and phasing of projects in Medical sector • £5.2m revenue contribution from acquisitions • Oakland £3.1m; Leatherhead £2.1m • Third party property income consistent with prior year • Harston Mill fully occ
Slide 7: Services Revenue Profile – Q4 2015
Services Revenue Profile – Q4 2015 • Group now comprises 5 operating businesses using 4 brands • 2015 acquisitions have expanded customer base and service offerings • Food & Beverage market synergies : Sagentia-Commercial, Oakland and Leatherhead Leatherhead revenue derived from 3 relatively indepen
Slide 8: International Services Business
International Services Business • Science Group is an international business : over 75% of Services revenue outside UK • 51% of consultancy fees in US$ (2014: 53%) and 8% in Euro (2014 : 4%) • Over 90% of employees are based in the UK • Adjusted operating profit benefit from forex of £0.7m in 2015 c
Slide 9: Adjusted Operating Margin
Adjusted Operating Margin • Fifth consecutive year of >15% adjusted operating margin • Strong margin for project based consultancy business • Leatherhead loss reduces margin, as anticipated • Oakland margin improved in second half of year following completion of integration 30% 25% 20% Adj operating
Slide 10: Acquisition of Leatherhead Food Research
Acquisition of Leatherhead Food Research Acquisition of business trade and assets completed in September 2015 • Net liabilities acquired of £0.4m • Acquisition related intangible assets (customer relationships) of £1.3m (net of deferred tax) • Consideration of £1.625m satisfied in cash on completion
Slide 11: Acquisition of Oakland Innovation Limited
Acquisition of Oakland Innovation Limited Acquisition of 100% of share capital completed in February 2015 • Net assets on acquisition of £0.5m, including £0.7m cash • Consideration of £5.0m satisfied by: • £3.6m cash on completion • £1.4m satisfied through sale of treasury shares - subject to lock-i
Slide 12: Capital Sources & Allocation
Capital Sources & Allocation 12 Science Group plc
Slide 13: Capital Sources 2010-2015
Capital Sources 2010-2015 • Equity fund raising undertaken in 2010 to refinance the Group • Debt funding with limited operating covenants in 2010 and 2013 • Secured against Harston freehold property • Strong operating cash flow has been primary capital source 14 12 Debt 10 Equity - Shares Issued £ m
Slide 14: Equity Share Capital
Equity Share Capital • Following refinancing in 2010, issued share capital has not increased • Share options and acquisition-related equity have been offset by share buy-backs 60 50 Chairman Outstanding Share Options Other Directors 40 28% 33% Ruffer Miton million shares 30 Issued Shares Hargreave H
Slide 15: Capital Allocation 2010-2015
Capital Allocation 2010-2015 • Equity buy-backs undertaken when appropriate • Maiden dividend paid in 2013 and increased significantly. Now being maintained • Capital deployed in acquisitions and second freehold property in 2015 18 Dividend 16 Debt Repayment 14 12 Equity Buy-Back £ million 10 Acquis
Slide 16: Cash & Debt 2009-2015
Cash & Debt 2009-2015 • Capital resources deployed for acquisitions in 2015 • Strong balance sheet maintained throughout with significant free cash resources • Freehold property assets in excess of £20 million at December 2015 25 20 15 Debt £ million 10 Gross Cash 5 Net Funds 0 2009 2010 2011 2012 2
Slide 17: Capital Source & Allocation
Capital Source & Allocation Board regularly review source and allocation of capital for the Group, as appropriate for a project-based science/technology consultancy business with relatively low risk tolerance Objectives • Shareholders • Medium term capital growth • Stable, attractive annual dividend
Slide 18: 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 (0)1223 875200 Phone: +44 (0)1372 376761 Phone: +44 (0)207 014 3250 [email protected] [email protected] info@scien