Redcentric Plc · LSE:RCN
Redcentric — FY2015 Earnings Presentation
20 slides from Redcentric's earnings presentation, 2015
Slide 1: Final Results FY15
REDC a FINAL RESULTS FY15 TONY WEAVER - CEO FRASER FISHER - COO TIM COLEMAN - CFO redcentric business technology. managed.
Slide 2: At a Glance
AT A GLANCE ¢ AIM listed (RCN), IT Services business. * Market capitalisation c.£230m, 145m shares in issue. * c.£100m revenue, 80% recurring. * Over 500 staff across 7 locations. 65% of staff own shares. * Over 2000 UK mid-market clients. PRINCIPAL SECTORS SIGNIFICANT CLIENTS TOP 10 SHAREHOLDERS He
Slide 3: The Heart of Redcentric's Service
THE HEART OF REDCENTRIC’S SERVICE | : APPLICATIONS | NETWORKS COLLABORATION | SECURITY | INFRASTRUCTURE | MOBILE redcentric ss technology. managed.
Slide 4: Redcentric's DC & Network Investment
REDCENTRIC'S DC & NETWORK INVESTMENT Data Centre 1,238 Racks across c50,000 sq ft & 960 used, 278 available for growth * Harrogate - DC, NOC & Head Office fea * Reading - DC and Support Pas * London & Cambridge - DC and Support oe? * Theale - Support Centre Network * 10 Gb MPLS Backbone Network with
Slide 5: Redcentric's Indian Investment
REDCENTRIC’S INDIAN INVESTMENT HYDERABAD OFFICE * Key differentiator + Wholly owned subsidiary delivering highly skilled technical services * Single team structure between UK & India . . Huge skilled resource pool (9m) 2nd and 3rd line technical resource * Development opportunity . . . . . Back offi
Slide 6: Compute & storage ownership; Voice & data spend
Compute & storage ownership Voice & data spend Source Gartner Group
Slide 7: Competitive Landscape
COMPETITIVE LANDSCAPE A TelecityGroup™ j(Qmart 40% @)pulsant <~ BT 30% e & & ODEA E redcentric <x 6 business technology. managed. 2 20% a intel Attenda sie maintel _ \j‘atterrative [a amma lve ernative [a ) ans 10% adapt ioe ©) aay kelwey ASC Computacenter 0% We make IT work redcentric business tech
Slide 8: Operations Update
OPERATIONS UPDATE Sales * Legal win: £2m contract over two years, cloud & connectivity * Healthcare win: £1.3m contract over three years, connectivity & hosting * Government win: £4m contract over two years, cloud & connectivity * 6 month sales pipeline*: £71m, +18% * 50:50 win split : Upsell & New
Slide 9: Financial Summary
FINANCIAL SUMMARY £100m 5 Revenue +8% £90m Recurring revenue +13% £80m + £70m £60m £50m £40m £30m £20m £10m £0m = Revenue EBITDA FCF redcentric business technology. managed.
Slide 10: Income Statement
INCOME STATEMENT FY15 FY14 FY14 Reported Pro-forma fm £m +/- fm +/- Revenue 94.3 58.3 62% 87.4 8% EBITDA 21.4 10.5 104% 16.2 32% EBITDA margin 22.7% 18.0% 18.6% Depreciation (5.1) (2.9) Amortisation (5.5) (2.8) Transaction & integration (0.6) (5.5) Significant growth in profitability Share option ch
Slide 11: Revenue and Profit Analysis
REVENUE AND PROFIT ANALYSIS £90m Revenue £80m +12.9% £70m £60m £50m £40m £30m £20m 424.2% 9.3 118] £10m £0m FY14 pro-forma = FY14 reported m FY1IS - 40.9% Recurring Services Product £25m 4 +28.7% EBITDA £20m £15m £10m FY14 pro-forma = FY14 reported m FY15 £5m +63.0% 16 -56.0% nen EA 02 £0m O05 Recur
Slide 12: Cash flow: EBITDA to net bank debt reduction
EBITDA Working capital Capex Transaction & integration Interest FCF Share issues Dividends Net bank debt reduction
Slide 13: Balance Sheet
BALANCE SHEET Balance sheet (£m) Mar'15 Mar'14 Fixed assets 23.4 22.4 Intangible assets 82.6 88.1 106.0 110.5 _ * Continued investment in own Current assets 18.4 21.0 infrastructure to underpin future Cash 32 39 revenue growth 21.5 24.9 Current liabilities (20.0) (24.7) . . * Tight management of wor
Slide 14: Bank Facilities
BANK FACILITIES Net debt (£m) Mar'15 = Mar'14 +/- Cash 3.9 (0.7) Drawn debt (16.2) 8.2 Net debt (12.3) 75 EBITDA* 16.2 Net debt/EBITDA 0.22x 0.76x * Mar '14 EBITDA is pro-forma * New £50m five-year bank facilities signed post year-end * Provides secure, flexible and low cost funding source to underp
Slide 15: Summary
SUMMARY Results * Strong organic revenue growth: recurring revenue +13% * Increased profitability: EBITDA margin of 23% (2014: 19%) * Reduction in net bank debt to £4.8m (2014: £12.3m), new facility in place * £2.9m of dividends paid, 2.5p final dividend proposed. Strategy ¢ Net new customers, build
Slide 16: Appendix
APPENDIX redcentric business technology. managed.
Slide 17: Enabling Market Transformation
ENABLING MARKET TRANSFORMATION redcentric business technology. managed. WORKFORCE PRODUCTIVITY OPERATIONAL AGILITY RELIABILITY Voice Collaboration Mobility Cloud services Application services Assured data centres Owned network Mature processes 7
Slide 18: Critical Accreditations
CRITICAL ACCREDITATIONS 1SO27001 & ISO9001 Certified (British Standards Institution) PCI Compliant for hosting services at our Data Centres Authorised to process HM Government data marked 'Restricted' Accredited to connect to and supply services over Janet Accredited to store patient data for and be
Slide 19: Earnings per Share & Dividend
EARNINGS PER SHARE & DIVIDEND FY 15 FY 14 Earnings per share Statutory Adjusted Statutory Adjusted im Em E'm fim EBITDA 21.4 21.4 10.5 10.5 Depreciation (5.1) (5.1) (2.9) (2.9) Amortisation (5.5) (2.8) Transaction & integration (0.6) (5.5) Share option charge (1.6) (1.4) Finance costs (0.8) (0.8) (0
Slide 20: Harrogate (Head Office) and office locations
HARROGATE (HEAD OFFICE) Central House Beckwith Knowle Harrogate HG3 1UG THEALE 2 Commerce Park Brunel Road Theale, Reading Berkshire RG7 4AB CAMBRIDGE Newton House Cambridge Business Park Cowley Road Cambridge CB4 OWZ READING 3-5 Worton Drive Reading Berkshire RG2 OTG redcentric business technology.