Science Group Plc · LSE:SAG
Science — FY2023 Earnings Presentation
19 slides from Science's earnings presentation, Mar 21, 2024
Slide 1: 2023 Preliminary Results
2023 Preliminary Results Martyn Ratcliffe Dan Edwards Jon Brett Executive Chair Group Managing Director Group Finance Director To be read in conjunction with the audited preliminary results announcement released on 21 March 2024. In addition to IFRS measures, alternative performance measures are use
Slide 2: Summary
Summary Record underlying results against a challenging macro-environment – Group Revenue of £113.3m (2022: £86.3m) • Increase of 31% including TP Group plc acquisition • Consultancy Services revenue of £81.3m (2022: £60.7m) • Systems businesses revenue of £31.2 million (2022: £25.0 million) – Group
Slide 3: Group Revenue
Group Revenue –Record revenue of £113.3m including contribution from TPG acquisition –Consultancy Services revenue of £81.3m (2022: £60.7m) –Systems businesses revenue of £31.2 million (2022: £25.0 million) –Market sector diversity provides resilience 120 100 Medical 17% 80 Defence & Aerospace Reven
Slide 4: Significant Growth with Minimal Shareholder Dilution
Significant Growth with Minimal Shareholder Dilution 125 25 –Five-fold increase in Revenue –Eight-fold increase in AOP –ISC increase of c.9% between 2010 and 2023 100 20 Shares in issue in million 75 15 AOP in £million Revenue in £million 50 10 Group Revenue Shares in issue 25 5 Group AOP 0 0 2010 2
Slide 5: Track Record of Delivering Shareholder Value
Track Record of Delivering Shareholder Value Investment in TPG in 2021 and acquisition completed January 2023 25 35 30 20 Acquisition of Acquisition of Frontier 25 TSG 15 Adjusted Operating AOP in £m 20 Profit Acquisition of EPS in pence Oakland and Acquisition of Leatherhead OTM 15 10 Adjusted EPS
Slide 6: 2023 Profit Reconciliation
2023 Profit Reconciliation £m 2023 2022 Notes: Consultancy Services AOP 20.4 16.2 Systems AOP 2.2 3.9 Property AOP 0.6 0.1 Property AOP increased due to normalisation of energy costs Corporate costs (2.6) (2.6) Group Adjusted Operating Profit 20.5 17.6 Adjusting items (primarily non-cash) TPG acquis
Slide 7: Corporation Tax
Corporation Tax – Tax charge of £2.1m (2022: £0.5m) • Prior year tax charge unusually low due to deferred tax adjustments and some over accrual in 2021 • Charge in 2023 subject to increase in UK tax rate (19% to 25%) • R&D tax credit of £0.5m (2022: £0.5m) • R&D tax credits – taken at tax line not r
Slide 8: Cash Bridge
Cash Bridge –Continued strong underlying cash generation from operations –Group cash of £30.9m and net funds of £18.0m at 31 December 2023 (2022: £43.6m and £29.5m) –After completion of TPG acquisition and share buy-back programme 70 60 50 40 Cash in £m 30 20 10 - Opening Cash Cash generated TP Grou
Slide 9: Science Group Operations
Science Group Operations
Slide 10: Science Group Structure
Science Group Structure Corporate Infrastructure & Governance Consultancy Services Systems Shared Businesses Services • Deep scientific, engineering and • Finance Submarine technical capabilities • Legal atmosphere • Specialist sector expertise • HR management • Industrial; Defence; Medical; Consume
Slide 11: Consultancy Services
Consultancy Services – Revenue* of £81.3m (2022: £60.7m) • TPG Services revenue included from January 2023 Medical Defence & 23% Aerospace – AOP of £20.4m (2022: £16.2m) 30% • High consultancy AOP margin of 25% (2022: 26.7%) Consumer Industrial • Regulatory margin improvement in Europe (incl. F&B) 2
Slide 12: Systems Businesses ('Satellites')
Systems Businesses (‘Satellites’) Submarine Atmosphere Management Systems Audio Chips and Modules –Strong market position (outside USA) –Leader in DAB/DAB+ and Smart Radio –Revenue of £21.3m (2022: nil) • Developing connected audio capability • Incl. c.£5.3m of low-margin pass-through materials • Ch
Slide 13: Corporate, Property and ESG
Corporate, Property and ESG – Underlying corporate costs of £2.6m (2022: £2.6m) • Total Corporate costs £8.1m (2022: £3.2m); including one-off (primarily non-cash) items related to TPG acquisition – Proposed dividend increase of 60% to 8.0p (2022: 5.0p) • Returns to shareholders in 2023 of £6.2m (20
Slide 14: Appendix: Annual Review of Capital Sources & Allocation
Appendix 1 Annual Review of Capital Sources & Allocation
Slide 15: Capital Sources 2010-2023
Capital Sources 2010-2023 –Consistently strong underlying operating cash flow –Term debt refinancing in 2016 and topped up in 2019 and 2020 • Term loan fixed at 3.5% using interest rate swap instruments to 2026 –Revolving credit facility of £25m agreed at end of 2021 (undrawn to date) –Equity placin
Slide 16: Capital Allocation 2010-2023
Capital Allocation 2010-2023 –Major capital deployments related to acquisitions • 2023 - completion of TPG acquisition –£6.2m returned to shareholders in 2023 • Share buy-back of £3.9m (2022: £1.3m) • Dividend payment of £2.3m (2022: £2.3m) 24 20 16 Equity Buy-Back £ million Dividend 12 Debt Repayme
Slide 17: Cash & Debt 2009-2023
Cash & Debt 2009-2023 –Group cash at 31 December 2023 of £30.9m and net funds of £18.0m –After completion of TPG acquisition and share buy-back programme –Debt refinanced in 2016 and loan increased in 2019 and 2020 –Revolving credit facility of £25m undrawn 50 40 30 Debt 20 £ million Group Cash Net
Slide 18: Equity Share Capital
Equity Share Capital 50 Major Shareholdings 45 40 35 20.7% Executive Chair 32.8% 30 Ruffer LLP Outstanding Share million shares Options Canaccord Genuity 25 18.3% BGF Issued Shares (Excl 20 Treasury Shares) at year end 4.0% Charles Stanley 15 7.5% Herald 8.5% 8.1% 10 Other 5 0 Shareholdings at 15/3/
Slide 19: Thank you
Thank you sciencegroup.com [email protected]